Social commerce in financial services
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.
Must try harder
This is the first in a series of blogs looking at the online media capabilities of various types of financial services provider and the first organisations I’m looking at are the Building Societies. I’m a big fan of the mutual sector, having worked for Nationwide Building Society in the past and I am fully behind the concept of putting members’ interests above shareholders. However, it is disappointing to see that Building Societies fall short when it comes to online media centres and using their website to communicate with journalists.
For this blog I analysed the websites of all 56 Building Society brands, even though recent mergers mean that strictly speaking there are only now 49 Building Societies. The results were quite eye-opening and I imagine if I were a journalist looking for information on these organisations I might have to work quite hard to get it.
48 of the 56 Building Societies provided links to news about their organisation. That’s 86% but it really should be 100%. Every organisation has news of some sort or another, even the tiniest Building Society with a handful or branches. At the very least, they should showcase their community involvement.
Next up, I looked at the availability of contact details for PR contacts. This is where things start to go downhill for Building Societies, because just 30 of them (54%) listed a phone number for a journalist to call. Of course, I understand that only the larger Societies have dedicated PR people, with Nationwide the only one to have a press office of a significant size. However, there should be someone, potentially the Sales & Marketing Director or the CEO who should be listed. Likewise, email contact details were slightly worse, with 29 Societies (52%) listing them.
Finally, I looked at social media capabilities and, frankly, this is laughable. Building Societies have a strong role to play in their communities and now is a good time to promote the mutual model. Creating and taking part in communities is important online as it is offline so Building Societies should recognise that. Just four Societies are involved in social media at all, that’s a lowly 7%. Respect is due to Saffron Building Society for their blog, facebook page and twitter feed. Well done also to Ipswich Building Society for their twitter feed and Hanley Economic for their CEO blog. I guess Stroud & Swindon should also get a mention because they make limited use of social bookmarking tools on the site.
Overall, the sector could do a lot better without too much more effort. Nationwide Building Society in particular needs to get to grips with social media and quickly because it sets an example for the rest. Come on guys, you can’t ignore it any longer!
News just in – Joe Wiggins has been nominated in the ‘Provider of the Year’ category at the IFA Life ‘Social Media in Financial Services 2′ awards in November.
I have noticed a huge variation in the quality of online media centres in the financial services sector. It’s vitally important that your media centre functions effectively, looks good and helps you to interact with the media. If it isn’t up to scratch then you are missing out on big opportunities and making the company look amateurish.
Here are the seven deadly sins of online media centres:
- Not having contact details. If you want to do PR then you need to be instantly contactable. That means email address, landline, mobile and any other details you think might be relevant. What bugs me the most are those standardised email contact forms. Nothing says ‘we don’t really want to talk to you but we’re making a token effort’ like one of those forms. The journalist will think ‘get stuffed’.
- Not having your news releases/ articles/ white papers in an easily searchable archive. You’ve written all this good stuff – why make it difficult for people to find what they want?
- Not having any content or not having updated it for months/ years. I’ve seen quite a few online media centres that haven’t had any fresh content for a year or more. What happened, did you just get bored? It makes your organisation look like it has one foot in the grave.
- Not having any sharing functions. Make it easy for users to post things to twitter, tag it in delicious or whatever.
- Not having any multi-media content. Get with it and have pictures at the very least and ideally some video. It’s so much more engaging.
- Not having the functionality for people to join/ sign up for news. It doesn’t need to be complicated. Just give people the option to ‘opt in’ if they want to.
- Posting your coverage as company news. It’s fine to post your coverage and include links to online articles where you have been quoted. It shows that you are a mover and a shaker. But don’t dress them up as ‘press releases’ or something that they are not. Would you expect a journalist to report on something that has been written by a rival? Of course not. Stick your coverage in a section called ‘in the news’ or ‘media coverage’ or something like that.
I’d also add one more which isn’t necessarily ‘deadly’ but is certainly a bugbear of mine – calling it a press centre. Hello? The days of Fleet St. are over. The media are newspapers, magazines, radio, TV, website, blogs and social media sites. It should cater for all of these.
I was recently asked to take part in a PRCA panel debate on social media in a B2B context. I used my ‘slot’ to outline the work that I had undertaken at Legal & General and the challenges facing large financial services providers operating within the tight constraints of financial regulation. I explained that Legal & General knew that people were talking about them on social media platforms but they didn’t really know what was being said or what the sentiment was. In a sense, only half the dialogue was taking place because Legal & General wasn’t participating.
I then went on to outline the importance of robust monitoring to alert the company to potential opportunities and threats, as well as having a crisis management plan detailing who is responsible for what. In terms of who ‘owns’ social media, it is different for every company and really depends where the early adopters and the social media advocates/ evangelists sit. It is likely to be one of three areas that take the lead: PR, Marketing or the Web team, but no-one can realistically expect to totally control it. For Legal & General, it seemed natural for corporate communications to drive the social media stream because, from a risk management point of view, it was seen as a reputation management issue.
However, my view is that you need a multi-disciplinary working party drawing on multiple areas and skill sets to drive social media forward. Ultimately, it is imperative that HR, legal, compliance and customer services are involved as well as the external communicators, marketers and techies.
It’s also important that staff know the parameters in which they can operate, so proper guidelines are essential. In the same way that there are rules around what is acceptable for email and internet use, there must also be for social media use. My view is that social media sites should not be blocked for staff as they can be ambassadors for your brand. Any fears that everyone will spend their whole time on Facebook is archaic. Empower and trust your staff – just let them know exactly where they stand.
I concluded by summarising my thoughts on social media for B2B financial services providers into ten tips. I hope you find them useful:
- Listen and learn – don’t act without knowing the full picture. It takes time to get familiar with social media sites because they communities.
- Understand your customers’ media habits – as with any PR, target the most relevant media as a priority
- Start a multi-disciplinary working party – meet regularly, pool resources, share what you have learnt
- Get compliance and legal on board early – without them, you’re finished
- Prepare for the worst – if nothing else, you must make sure that you can fight fires effectively
- Appreciate that it is a long haul – you might get social media, but lots of people don’t. Prepare to sound like a broken record
- Get a business case and a senior sponsor – ideally a board-level colleague
- Don’t start what you can’t finish – you can’t really have a social media campaign with a defined start and finish because once you ‘activate’ something it’s got to run and run. So don’t start that community or build that blog if you are going to give up on it in six months’ time.
- Guide not control – the concept of owning social media is as daft as owning the internet. No-one does, because it is integrated. So try to guide other areas of the business.
- Chill out! – the principles of communication and relationship building are pretty much the same as traditional PR, so if you are well versed in them, then you’ve got a pretty good set of core skills
I recently met with Christophe Langlois who runs Visible Banking, a site which tracks social media initiatives in financial services, particularly banking. (By the way, this was social networking in action as we originally starting chatting via Twitter earlier in the year!) We started talking about social media and financial services from the perspective of my PR role at Legal & General and ended up producing a short video for his blog.
You can view the video here.