FreshNetworks Blog

Following last week’s post exploring social media fears and opportunities for financial services brands, this blog post suggests three  ways that retail banks could make real, innovative use of social media to differentiate their products.

1. Social banking

Create a current or savings account with interest rates individually tailored based on a customers’ ability to recruit more members to the bank. New accounts could open with an average interest rate which increased by a small fraction each time a customer brought on a new member to join.

In the old days of member-get-member direct marketing, it was common for companies to offer discounts, gifts or value added services to customers who did the leg work in finding more customers. This model has now evolved into group buying from sites like Groupon, but there is evidence to suggest that “member get member” banking could work from Key Trade (under the control of Group Credit Agricole).

While Key Trade used a cash signup incentive, an interest based one would be a more meaningful commitment to a customer relationship and stronger motivator for recruiting new customers, particularly if interest rates could be competitive with current market offerings.

2. Social Micro Saving

Create a savings account which encourages you to micro-save via your social platforms. This could also be used to encourage micro-donation to charities. This could work quite effectively as a Facebook app which occasionally puts something into a subscriber’s news feed, reminding them to tuck £10 away in a savings account and make a small donation to charity.

Charitable donations website Just Giving noted the rise of social giving late last year and with the rise of applications like Snoball and SocialVibe, innovation is already beginning to harness the power of social donation behaviour to drive donations for charitable causes. If charitable donations can be contagious amongst social networks, it seems likely that social saving could be similarly rewarding and therefore contagious. Examples might include teams that are saving personal funds & raising charitable funds for expeditions, or groups saving towards a common goal such as holiday makers saving for a big trip.

3. Social Budget planning

Social gaming has proved itself remarkably addictive, but plenty of applications can the human desire to compete to good use. Mobile or social apps that let people compete over their personal budgeting targets could drive more careful budget planning & financial prudence.

As soon as NFC payment becomes a reality, mobile devices will be enabled to track spending both in terms of amounts and locations. If a couple, or group of friends decided to collectively budget towards a savings target, they could opt in to share how well they were performing against self-imposed goals. Personal financial data would remain private, but benchmarking against targets for lunch-time spending, for example, could earn gamers reward points & bonuses, just in the same way that FourSquare currently awards players with badges & Mayorships for check in achievements.

My purpose in exploring these ideas is to demonstrate the varied applications for integrating social media & social network behaviours with personal finance. With the growing popularity of The Co-Operative bank which offers customers a shared gains model and niche banks like Triodos offering consumer banking customers ethical and sustainable savings options, it’s not hard to imagine innovative, social financial products emerging as the financial services industry re-invents its public image.

A simple social graph

The social graph is not a new thing. The concept has been spoken about since at least the 1960s and is simply a way of representing (drawing) all the connections between people. Imagine a small island community of three people with no links to the outside world; you could represent this community as a social graph – showing all three connected to each other. As well as people we might add on other things – places, events, animals – and so use a social graph to show the connections between all of these objects rather than just between people.

The concept of the social graph is not a new thing, and it is not unique to social media. But what social networks do provide is a systematised way of storing these objects and these connections. Facebook is currently the largest social graph in the world but any social network builds a social graph based on what you tell them about yourself, who you connect to and the actions you do.

An example of Facebook, the biggest social graph

Facebook, for example, knows who you are friends with (and who they are friends with). It knows when you and a friend are connected by an event (that you both attend) or by a photo (that you are both in), or by a film (that you both ‘Like’), or by some music (that you have both listened to on Spotify). It then stores this data in a systemised way and so has structured data on you, your life and the way all of the things around you connect. Think of it as a mass of data that can be used to help to define an individual. And Facebook gives brands access to this through their ‘Open Graph’ API.

Benefits for Facebook

For Facebook the benefits of building and storing these social graphs is obvious – the more they know about an individual, the more they can tailor and personalise their experience and the more useful Facebook becomes to them. They can use this data to monetise the network – mainly by selling targeted advertising. They currently earn almost $1.20 a year from every individual Facebook member, and the more data they collect the better then can personalise the experience and the more they can earn. Finally, the quicker they build an individual’s social graph, and the more information they capture in it, the bigger the barrier they build to others being able to come in and compete with them.

Benefits for Facebook members

For the individual members of Facebook there are benefits too. Whilst personalisation can be difficult to get right, there is no doubt that a personlised experience can be much more useful to an individual than a more generic one. It helps you suggest things that they might actually want to read, things you might actually be interested in, and even show you adverts for things you might actually want to buy. The more data you share with Facebook, the better they can personalise your experience and more useful you will find it. Of course, you need to remember to be informed about what you choose to share and why.

Benefits for brands

It is probably fair to say that brands so far have not taken the most advantage of the social graph. Partly this is because many are still experimenting with social media and many think of it just as a way to engage and build their own communities and networks, rather than exploring the pure data benefits that they can get. But applied correctly, brands can use this data to provide a better targeted and more personalised service, and even to help shape products themselves. Whether you are Amazon, using Facebook’s social graph to help you choose products for your friends’ birthdays, or KLM using Facebook and LinkedIn social graphs to help you choose who to sit next to on the plane, there are opportunities across sectors and audience types. In fact the biggest barrier to brands using the social graph effectively is their own creativity and ability to explore how the data they can get from social graphs (including Facebook) can help your business. And the biggest opportunity is to explore ways that data from these social graphs can be combined with a brands own proprietary data to build a bespoke data set that can let you develop products and personalise services for customers.

All brands should be exploring and understanding the different social graphs out there (including Facebook’s) and the data that these can offer. Social media is much more than just a means of communicating to and engaging with people. In fact the possibilities that this kind of data offers can often be much more interesting.

Image via Wikipedia

January has seen a spate of people tweeting things they shouldn’t – from Diane Abbott to Ed Miliband in the UK to countless people working for brands across the world. We’ve also seen a renewed debate in the UK about how the professions should use social media – notably about teachers befriending their pupils on Facebook. One way that many organisations deal with this is to create social media guidelines but even more important than any guidelines you might right is the internal culture change needed to real to make yours a true social business.

Surveys in the UK last year consistently showed that between 35% and 40% of UK firms have no social media guidelines in place. And even for those firms that did, many employees claim that they do not know what they are. Guidelines are useful, but really they are just the starting point, something every firm should have in place. Much more useful than any social media guidelines is the cultural change you need across your business to really take advantage of the opportunities social can bring.

This change is broadly in two main areas: bringing your staff closer to your customers, and building your staff as your biggest advocates. Both of these are important tasks and done properly can start to have a real impact on your organisation.

1) Bringing your staff closer to your customers

In any organisation some employees are customer-facing and some are not; and only a few of those that are customer-facing really understand what a range of your customers are thinking. This often leads to a real gap in understanding between what your customers think about you, your brand and products, and what yous staff think that they think. Maybe your staff think that customers are more critical than they are. Or that some things are more important to them than they are. Or even that customers like you a lot more than they really do. There are always gaps in understanding, and social provides a way to close this gap.

At the simplest level, all organisations could benefit from using real-time comments and discussions as part of internal comms. Show what people are saying about your brand on screen around your office or on computer desktops will begin to connect people to conversations. Analysing this and showing positive and negative trends and the topics of conversation will being to let people understand the weight of discussion and opinion online.

You can go much further than this. Rather than just showing real-time information to staff you can start to really connect them to customers. Develop an advocate programme not just for the external benefits that they will bring but also to bring information into the business. Have a formal mentoring relationship where customer-advocates mentor your key staff gives them a real role in the business and allows you to use your most connected customers and contacts to support your business. On a broader level encouraging each employee to build their own networks and connections onine (be that through Twitter or through specialist forums and groups) will help them to be more involved and engaged and will help them to solve problems – giving them an extended team of people from which to source ideas and support.

Connecting your staff (be it passively or actively) will help them be more informed and help to focus your efforts on what really matters – the customer.

2) Building your staff as your biggest advocates

Your staff should already be your biggest advocates and you should be encouraging them to use social media to help them project this advocacy and support for your brand.

Many organisations develop comlpex and valuable advocacy programmes for customers and influencers online, but fail to develop similar programmes for their biggest advocates – their staff. Your staff care about the brand, and your products and are often emotionally involved in what you do and why you do it. Sharing this externally is valuable; getting them to share it even more so. Encourage your staff to build networks that are appropriate to them – if they work in product development they could build contacts through forums and groups with people who could help them. If they work in sales they could use Twitter as a way to build their own brand and reach out to people to fill the top of their sales funnel. And everybody across your business could connect with people using your products, in your industry or customers looking for help and advice.

You staff will be doing this already (whether you know it or not) and encouraging and training them to really use social tools will help their efforts benefit you more. Rather than them leaving a review on a product of yours saying it is great, imagine how much more powerful it would be if they went in and said “I was part of the team that worked on developing this product. We’re really proud of it and hope you like it too”. Encourage and enable them and make sure your guidelines are more about setting boundaries and providing support for this.

For many brands reach of your messaging and engagement is important. Your staff provide the single best vehicle to do this. Empowering, practically encouraging, your teams to all engage in social media will be good for their development and also good for you.

Today I went to IBM and SugarCRM‘s “Get Social” social business and social crm roadshow.

Some of the key takeaways from the event include:

Social Business

Roy Lee, Marketing Director at IBM gave the following tips about social business:

• Social business should tie together processes and departments. The IBM definition of social business is a business that is engaging, transparent and nimble.

• Social media v social business – Lee believes that social media is about communication mostly  for marketing and PR. Social business, however, embraces social media but brings the tools and techniques inside an organisation, aligning goals across the organisation as a whole.

• When it comes to social business, Lee believes organisations have to set an AGENDA:

A – Align organisational goals and culture

G – Gain social trust

E – Engage through experience

N – Network  your business processes

D – Design for reputation and risk management

A – Analyse your data

• The most successful way to adopt social business is from the top down, via the senior executives and the board. Then you need to establish a digital council, community managers, a centre of excellence for continued learning and development, content management, guidelines and standards, reputation and risk management and metrics and measurements.

• Lee believes that social gaming is critically important for engaging and IBM themselves have 2 social games internally – “IBM Innovate”, which is a business process management game which involves sharing final scores both internally and externally, and “City One”, a city planning simulation game.

Social CRM

The key take home from Tom Schuster, VP and General Manager of SugarCRM Europe, session on getting started with  Social CRM was as follows:

1. Don’t know where to start with Social CRM? Start with the customer.
2. Next, choose and open source CRM system that allows you to keep up-to-date with changes online.
3. Ensure the CRM has a flexible Cloud infrastructure to allow easy data migration and alignment.
4. Integrate collaborative processes into gathering data and merge all existing data with new data that is gathered to give a holistic picture.
5. Allow users to connect to the CRM using their own tools and platforms.

While the session was very interesting, it didn’t offer any ground-breaking advice or case studies about  social business or social crm. However, it was good to see that social business is finally becoming a key objective for business leaders and owners on a global scale.

82% of TV adverts generate negative ROI, according to the book The Social Media Management Handbook: Everything You Need to Know to Get Social Media Working in Your Business, written by a team of three from Accenture.

If this is actually the case, it begs the question: Why are we all so obsessed with social media ROI?

Given that the first TV ad was broadcast over 70 years ago, and social media has only really come to the forefront for business use in the last 5 or so years, it make little sense that brands and businesses are reluctant to invest in social media due to a lack of hard ROI statistics, but are happy to pour millions into TV advertising.

So why is this the case? I’m not really convinced that brands and businesses themselves understand why social media ROI is so fundamental to its adoption. Is it because the likes of Facebook and Twitter are still viewed to be ‘free’ thus there is a reluctance to invest? Or is it a case of waiting to see if someone comes up with the equivalent social media metric for what ‘reach’ is to PR?

To me, I think we’re obsessed with social media ROI because social media, unlike TV advertising, is so much more than just another channel.The smart brands and businesses want a social media strategy that includes measurements, KPIs and metrics that deliver value across the whole business, rather than just for PR, marketing or other one-off initiatives.

This type of adoption- social business- requires uptake from the top level down, cross market, cross department and cross discipline. And for businesses to invest in social media in this way,  it’s vital to understand the value it can generate before taking that leap.

Becoming a social business, and using social media in a way that is potentially transformational to an organisation, requires heavy investment in both financial, resourcing and strategic terms. So for business to willingly adopt this model it’s wholly understandable to see why we’re all obsessed with social media ROI.