Measuring Social Media (What One Credit Union Should Have Done)

As I look at the title of this post, I’m painfully aware that I really don’t know if the credit union I’m going to mention did what I think it should have done or not. If it did it, then my apologies to the marketing folks there for implying that they didn’t. If the credit union didn’t do this, then they should keep reading.

The Credit Union Journal recently reported on the Facebook efforts of Fort Knox FCU. On Facebook for about a year now, the CU attracted 4,700 fans in the first three weeks of having a Facebook page. With more than 5,500 fans now, the CU claims to be the “most popular credit union on Facebook.” The article states:

“About 70% of those friends are members, not other credit unions or industry groupies. The CU isn’t able to provide metrics that prove its approach is attracting new members or increasing sales. But [marketing manager] Stapleton said she feels Facebook has helped Fort Knox FCU diversify the membership and reach a new target demographic.”

My take: Popularity is not the goal of your social media efforts. Business results is. If it hasn’t already done so, FKFCU should put some measurement approaches into place. Ideally, it would have done so right from the start.

After its initial three-week honeymoon with Facebook, FKFCU has averaged about 16 new fans per week. Is that good or bad? I don’t know. But after averaging 1,600 new fans in its first three weeks, fandom has only grown by 1% of that weekly average since then.

My bigger concern, however, is the statement that the CU “isn’t able to prove its approach is attracting new members or increasing sales.”

What the credit union should have done (if it hadn’t or hasn’t) is:

1. Profile the initial fan base. The first step the CU should have taken is determine who these new fans are. The CU did identify 70% of them as members, but that’s not enough. The CU should determine the average tenure of those fans with the CU, average number of product owned and average balances. The initial 4,700 fans — 3,300 members, 1,400 non-members  — could have become a control group for understanding the impact of Facebook interaction.

2. Develop an engagement tracking metric/measurement approach. A year later, can marketing at FKCFU tell management how often fans interact — not just on the FB page, but in other channels as well? It should be able to do that.

3. Track bottom line results for the control group. With steps #1 and #2 in place, a year later FKFCU would be able to say “here’s how engagement/average accounts owned/average balances for our Facebook fans compares to the changes in those metrics for non-Facebook fans. In fact, they’d be able to compare active FB participants to inactive participants to see if FB participation is correlated to bottom line results.

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10 thoughts on “Measuring Social Media (What One Credit Union Should Have Done)

  1. Online is one of the few channels FIs can track marketing and social engagement performance. Far better than print, tv and radio. With a good plan words like “think” and “feel” can be removed as a measurement for success.

  2. Well Ron, you may know by now I prefer data-driven decision making. You may have uncovered a Facebook revenue source… providing data on “friends” or “likes” users in a file format usable by the buyer (i.e. in an MCIF or other system). It is data the users allow the FB page-owner to see anyway. Why can’t they deliver a specifically formatted file to be analyzed? Perhaps then the CU could provide better answers about the success or lack thereof of their FB page.

    Maybe this is occurring and I don’t know about it. If not, maybe you and I could get a cut of the action, like those twins that claim Facebook was their idea?

    ~ Jeff

  3. PG: I don’t want to come off sounding too harsh or critical about FKCFU (I hope they don’t have any dyslexic members), but there are probably lots of CUs (and banks) who jump into a Facebook page without asking the questions: 1) Why are we doing this? and 2) How will we know if we’ve been successful? Simply put (with apologies to FCFCU), but “most popular CU on FB” is no big deal. FKFCU has ~75k members. I bet I can take ANY CU with at least 50k members and get 5500 FB fans in ONE month. Here’s how: Offer a $10,000 prize to be raffled off to anyone who friends the CU on FB. Anybody — N E BODY — can get a lot of FB fans.

    Jeff: That’s a great idea. However, FB will generate a lot more revenue from “brands” looking to stick their annoying ads under the noses of 500 million users than it will selling data to marketers who have no clue how to use the data. (Ask me what I really think).

  4. I recall reading data recently stating that few retail financial institutions have allocated any measurable portion of their marketing or operations budget to social media. With so little budget allocated toward social media, are small financial institutions like FKFCU willing to invest the money into buying or building the systems required to measure the data you’ve suggested?

    While I only work with a narrow slice of the thousands of financial institutions in the world, my experience with FIs suggests that the driving force behind the interest & participation thus far in social media is the perception that it’s free (opportunity costs not being part of the equation). Given that so many view it as free, I wonder whether there is any motivation to measure a return on what so many see as a zero dollar investment?

    In other words, if FKFCU were to define a basis for measuring the actual cost of their social media activities then do you think they would be more interested in investing proportionately in systems to measure the returns?

  5. JS: Funny you should mention that. In a report I published on social media a few months ago (http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=723), I wrote this regarding SM measurement:

    “The cost of developing an infrastructure to measure social media investments is not insignificant. Considering that many firms’ total investment in social media might only represent 1% to 2% of their marketing spend, building a measurement capability might cost as much as their entire social media budget.”

    You’re right on about the cost implications. But SM isn’t free (@cuwarrior: Back me up here, will ya?), and even if it were, it’s very disingenuous of social media proponents to crow about the “return” if there’s no investment required.

  6. Pingback: In Brief: Bad Service Fine | Free vs. Fee | Penny Pinchers | The Financial Brand: Marketing Insights for Banks & Credit Unions

  7. I like the point you’re making in this post. I’m observing similar trends in some clients I work with, in that they are trying to say any SM effort is successful or not based on the volume of followers, fan whatever. You need to measure quality, measure traits, measure attributes. As cliche as it sounds I’d rather have 100 ravings fans than 1000 people suckered into following my FB page through some giveaway.

    I really like how you broke apart ways to analyze Facebook fans in this particular example. I think it goes to show how much SM can teach us. In this example, the value goes beyond the incremental revenue coming from some SM promotion and instead what being on Facebook means for your clientele.

  8. Chris: Thanks for your comment. Claiming success based on # of FB fans is a slippery slope. If a firm drives FB fans by running a contest (which many do), then the potential future value of that fan base is suspect. Personally, I don’t see this so much as a lesson of what SM can teach us, but what database marketing techniques can teach us about measuring SM.

  9. Ron I think FI’s stepped into SM without understanding what it would do for their business which in turn led to their inability to measure “success”. SM is that gray area between Marketing/Promotion and Sales/Customer Service. I am not an expert on FI’s use of SM but from casual observation, it’s obvious many FI’s created FB and Twitter pages without establishing a clear strategy.

  10. I kept waiting for the payoff, clever typesetting or something, because I was *sure* the popularity was going to stem from fans of FUCKFACE U. (THE grad school of choice for Wassamatta U. alumni)

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