Social commerce can be defined as ‘the use of social technologies to connect, listen, understand, and engage to improve the shopping experience’. Altimeter Group says that there are four stages of social commerce:
- Let’s Be Social – simply using social technology to build the brand and community
- Enlightened Engagement – informing customers through reviews, experts or other respected sources
- Store of the Community – customers help drive product selection assortment and merchandising
- Frictionless Commerce – the buying experience is completely redesigned to create a fully customer-centric experience
How is this relevant to retail financial services? Well, a shopper is a shopper, no matter whether they are looking for a personal loan, a savings account, some IT hardware or an airline ticket. Believe it or not, social commerce is changing the way we shop, and this is already affecting the financial services sector.
Most financial services companies have not progressed beyond the first stage of simply being social. First Direct are using Twitter, Flickr and YouTube and Barclaycard are using Twitter and Facebook to connect and engage with their customers. These are big steps in the right direction and very innovative for the sector.
How might social commerce go beyond that though? Stage two, ‘Enlightened Engagement’ could include customer case studies on YouTube or Flickr, for example. Imagine how powerful it would be if you were looking for home or car insurance and you could view video clips from people extolling the virtues of your claims management service. (Too much emphasis is placed on cost these days anyway.) You could also have experts from outside your organisation, such as financial commentators, provide video or audio clips to help inform people. Or, you could have a forum where potential customers can discuss amongst themselves what they think of the product or service before purchase.
Stage 3, ‘Store of the Community’ could be a product or product range that is influenced by consumers via social media channels such as Facebook or Twitter. Imagine a simplified, stripped down mortgage or insurance product designed by product and propositions people as a direct response to what they gathered from Twitter and twitpolls.
How about product and proposition teams stop guessing what people want and just ask them? Social media is a rich vein of feedback and intelligence waiting to be tapped. Taking it a step further, you could even part develop two propositions, video them and get people to vote for their favourite, a bit like Google Slam.
Stage 4, ‘Frictionless Commerce’ is a tough one. Is it even possible for an existing financial services firm to start from scratch to put the customer at the heart of the experience? I suspect not and I think that the only organisations that will be able to achieve this nirvana will be new ones. However, here I defer to a higher authority, Brett King, and his post on the prototype bank.Read More