Advocates constantly tout the value of social media for driving engagement, loyalty, lead generation, customer advocacy, retention and cost reduction. And yet, much speculation still swirls around the actual impact that social media has on business ROI.
As consultants in brand reputation, we believe in advising clients on an additional type of ROI—Risk of Ignoring. Having analysed the social activity of countless companies and drawn insights from industry and consumer reports, it is clear that the existing discussion around social media requires fresh context. The discussion must be elevated above the “we better keep up” argument. But that begs the question: or else what?
Generally speaking, social consultants focus on what can be gained in social: platform activation fosters brand awareness, community building will positively impact WOM recommendation. While these considerations remain relevant, we must also remember what can be lost if social is done poorly or, as is often the case in financial services, if firms choose to ignore its very existence.
It’s not just an issue of keeping pace with the competition—of looking innovative or having branded social platforms in place. It’s about effectively addressing key business objectives. For example, there is no business case for amassing a large Twitter following in isolation—we can’t blame anyone for questioning the ROI of mere social presence. But there is business value when you can, say, increase the amount of click-throughs to branded content or visibly engage with online influencers and thought leaders, something both BlackRock and CME do well.
How then do we assess the business impact of NOT developing a social strategy?
To start, we do perceive – even in financial services - some consensus that social media is not a mere fad. Consumer behaviour has changed fundamentally, and will continue to change with each generation. Not only are the technologies embedded into people’s personal daily rituals, they are significantly influencing consumer habits and purchase decisions. Forrester research has shown that 2/3 of people have made their purchase decisions before they have ever met with a sales person from that company.
The forward-thinking companies that understand this evolution, are actively harnessing the power of social platforms to increase market voice, connect with niche target groups, and provide brand differentiation in key communication territories. And today’s social measurement capabilities have evolved accordingly, providing actionable insights and KPIs to ensure that “success” is benchmarked and clearly quantifiable.
Social is another tool in the marketing arsenal and indeed a particularly unique one. Socially savvy companies become more market aware, and privy to consumer insights and feedback that are lost on others. First Direct Bank (part of HSBC) are a good example of this, they go beyond using social media purely as a PR or customer service channel but as a key way to gather customer intelligence through feedback and research. This feedback can directly impact the development of their products and services.
These companies enjoy the benefits of multiple customer touch points, forging value-add relationships with a variety of stakeholders. In short, they are “part of the conversation.” On the other hand, those who ignore the social channels on which their audiences are already active simply give competitors the opportunity to walk in and increase their share of voice. Herein lies the true value of social— and the risk of ignoring it.
As an agency, we appreciate the great challenges that have hindered social media adoption in the financial sector—compliance, regulation and infrastructure to name a few. But the common attitude that financial services are somehow immune to the long-term impact of social is, in fact, the greatest barrier to overcome. Financial services companies need to understand that Risk of Ignoring (ROI) should be one of the greatest drivers for social media adoption.
Our key tips to mitigating social media “ROI” would be:
- Listen and understand where the conversations are happening about your brand: This can affect where your company invests its social media efforts: if you are being mentioned frequently on Twitter, it makes sense to have a company profile on this platform.
- Prepare your organisation for social adoption: Include the necessary key stakeholders from different departments to engage on the topic and drive effective execution for your organisation.
- Be clear about the role that social can play for your company: Clearly define the objectives, audiences and key KPIs and involve the key decision makers in this discussion.
- Ensure you have a company wide social media usage policy: Sometime the worst culprits in damaging brand reputation on social media are existing or past employees; creating a solid policy will help to set the ground rules from the very beginning for all employees.
- Monitor changes in sentiment about your brand: Using a listening tool or third party tool to monitor online mentions and conversations is critical to managing the overall brand sentiment.