Banks’ Social Media Challenges

I had the chance to participate on a SMB Boston panel last week on Driving Business Value Through Social within Financial and Regulated Environments, which I think was just a fancy way of saying “social media in financial services.”

The main message of my presentation:

Financial institutions should integrate social media approaches into their marketing and customer service processes.

As I see it, banks (and credit unions) are wrestling with — or perhaps, simply failing to address — challenges regarding social media. And you don’t even need to be a journalist to know where these challenges came from:

  1. What: Banks don’t know what to say in social media.
  2. When: Banks don’t know when to say it.
  3. How: Banks don’t know how to say it.

There are, of course, a couple of other potential challenges, but I think that “Who to say it to” is less of a challenge, and that “Why they’re saying it” is better understood. Regarding “why”, the research that Aite Group has done on social media in banking, bears this out: Most FIs are fairly clear that engaging customers, building brand awareness, and building brand affinity are why they’re involved with social media.

Engagement may be the objective, but I’m not sure, based on what I’ve seen FIs tweet and post, that they know how to achieve that objective.

I saw one FI recently tweet:

Have a new business that needs to grow quickly? Add credit card processing to increase revenues and cash flow. #smallbiz

Here’s another from a credit union:

We are listening. We are not like the BIG Banks. Check us out!

Do people really turn to Twitter or Facebook to see shameless marketing messages, re-purposed from other marketing channels? Are these tweets effectively engaging customers/members/prospects? I don’t know. But I bet the FIs that tweeted those messages don’t know either.

Another thing that struck me reading those tweets, was thinking about why the FIs chose to tweet those messages when they did. Was some marketing person sitting around with nothing to do, and suddenly realize that ts was 30 minutes since the last tweet, so s/he might as well tweet something else? Did something trigger the need for a credit card processing tweet at that particular time? I can tell you this: The credit union’s tweet came 11 days after Bank Transfer Day, so I doubt there was some pressing need to send out that tweet when it was sent.

The tone of these tweets doesn’t sit well with me, either. How many times have you heard the phrase “join the conversation?” Look again at those tweets above — do you know anybody who talks like that in the course of a normal conversation? (If you do, I bet you don’t engage in too many conversations with that person).

This gets at a big issue that marketers (not just in financial services) have to face: They don’t know how to have (or start) a conversation with consumers. Here’s the problem:

Marketing has, to date, been driven by the need and desire to persuade consumers.

But “engagement” isn’t accomplished through persuasion. (Well, persuasion can be a part of it, but it can’t be the only part of it).


So what should FIs do to address these challenges? There’s a tactical response and a strategic response.

The tactical response: Categorize and test.

A couple of months ago, Michael Pace from Constant Contact wrote an interesting blog post, advocating that Twitter users should periodically do a self-analysis of their tweets. Honestly, I thought that was a pretty self-indulgent thing for an individual to do. But at the company level, the idea has a lot of merit.

A high-level analysis of your company’s Twitter stream can help you understand how well you’re balancing various types of tweets. And the same could be done with Facebook posts. The challenge, of course, is understanding what impact those messages are having, and if shaking up the mix would improve the impact (i.e., engagement).


But even if you do this, I doubt that you’ll make more than just a minor impact on your firm’s bottom line. To have a more meaningful impact, you need the strategic response:  Integrate social media approaches into marketing and customer service processes.

In my presentation at the breakfast, I highlighted three ways to do this:

1. Influence preferences. I like what America First Credit Union does on its site (as does @itsjustbrent,  since he either borrowed this example from me, or I stole it from him). The CU incorporates members’ product reviews on the product pages. By doing this, the CU accomplishes:

  • Customer advocacy. Not just in the net promoter sense of the word — but in the more important sense of the word: Doing what’s right for the customer and not just your own bottom line. Helping consumers make better choices — that are right for them — by enabling them to access other customers’ opinions is a demonstration of customer advocacy.
  • Active engagement. I guess that, if a customer follows you on Twitter and reads your tweets, or likes you on Facebook in order to enter a contest to win a prize, you could call that engagement. But I would call it passive engagement. Customers who take the time to post a review are more actively engaged, in my book.
  • Continuous market research. I doubt many firms could capture the richness of information America First is capturing through satisfaction or net promoter surveys. And I know that they can’t capture it in as timely a basis as America First does.

2. Provide collaborative support. I’ve been holding up as an example of a firm with collaborative support, but it recently discontinued its Mint Answers page. No worries, Summit Credit Union is doing the same thing, and hopefully, they can become my poster child for this. Collaborative support is giving customers the opportunity to answer other customers’ questions. Dell has been doing it for years. Why provide collaborative support?

  • Reduced call volume. I’m not going to say that you’re going to see a huge volume of deflected calls, but over time, if you market the collaborative capability, it can help.
  • Expanded knowledge base. This is where the bigger value comes in. Customer service reps leverage internal knowledge bases to answer customer questions. Collaborative support helps grow that knowledge base, and helps figure out which answers and responses are more valuable than others. This expanded knowledge base will also prove valuable in training new employees.
  • Active engagement. Similar to the product reviews, customers who participate in collaborative support sites are demonstrating active engagement.

3. Instill financial discipline. This is about using social concepts to get people to change the way they manage their financial lives. Take a look at the research that Peter Tufano has done regarding what motivates people to save.  There are some good examples of this in practice — see Members Credit Union’s What Are You Saving For?. I recently chatted with the CEO of Bobber Interactive, and like what they’re doing about bringing social gamification to how people manage their finances.


Bottom line: Your firm can putz around with Facebook and Twitter until you’re blue in the face. For financial institutions, this is probably not going to have much of an immediate impact on the bottom line. It will likely take years of experimentation to figure out what to say, when to say it, and how to say it on social media channels.

If you want to engage customers, you have to give them a reason to engage. Mindless, idle chatter on Twitter and Facebook isn’t sustainable.

The path to making social media an important contributor to bottom line improvement — and sooner rather than later — will come from integration social media concepts and approaches into everyday marketing and customer service processes.


New Business Idea: Custom Twitter Avatars

I told a friend (@chaztoo, if you must know) that I thought he should start a business creating custom Twitter avatars. I know that there are online services like FaceYourManga, but those don’t produce anything of really high quality, nor are they very unique. 

@chaztoo is a great artist. Take a look at this picture he posted on his Tumblr:

Wouldn’t you pay something to have him create a custom Twitter avatar for you?

Or maybe, would you pay to have him to do this as a gift for someone else?

Maybe your company, who’s trying to create/support your brand using Twitter, could benefit by having custom avatars — that had a graphic element consistent in each of the avatars — for the people most active on the channel?

Favor, please: Leave a comment letting me know what you think of this idea. Your input will probably determine if @chaztoo does this or not. 

Breaking The News On Twitter

I honestly and truly wonder what it is that motivates many of you to be the 7,657,423,012th person to tweet a news item.

Do you really think that you’re the first to tell your friends and social network that Steve Jobs resigned? Or that Google acquired a Motorola division?

Do you not scan at least a few tweets in your Twitter stream to see if anybody else tweeted the “breaking” news you’re itching to share with the world?

Does being redundant and useless not bother you?

It would be one thing if you were linking to a source that maybe not everybody read (I linked to Josh Bernoff’s blog post, so maybe I’m guilty as charged as well). But when you link to a HuffPo or TechCrunch article, you’re providing a link to the same story that 7,173,147,882 people before you did.

I have a theory that addresses the wonder I expressed above: Attention-deficit disorder.

No, not like the medical community defines it. Not “the co-existence of attentional problems and hyperactivity.”

No, I mean attention-deficit as in: Doesn’t get enough attention, and needs to call attention to oneself.

If you’ve got other theories explaining this behavior, let me know. I really do want to hear them. Because I honestly believe that if I better understand this behavior, maybe it won’t drive me as crazy as it does.


A guy named John Wanamaker is famous for something he said 100 years ago. He said:

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Unfortunately, he’s wrong. I mean, if he didn’t know which half was wasted, how did he know it was half and not three-quarters or one-quarter of it?

He’s also wrong because it’s conceivable that 100% of his advertising dollars were wasted.

A century ago there were no ad ratings or measurement services. So how he could possibly know if ANY of his advertising spend was effective? It’s quite possible that any increase he saw in sales was due to exogenous factors like the weather, the economy, the competition raising prices or going out of business, or word of mouth among customers.

Ah, but hold on here a second. I guess it’s possible that 100% of his advertising spend was effective – or at least, not wasted – depending on what measure of success you use. If you don’t believe me, ask DeBeers.

Is it likely that the advertising he did had absolutely NO effect at all? Probably not. Just because someone didn’t make a bee line for the department store after seeing an ad, doesn’t mean the ad had no effect and should be considered wasted dollars. Some might have seen the ad and learned about the store, or the ad might have left others with a positive impression of the store.

Wanamaker thought half his advertising spend was wasted because he had no way to measure its effectiveness and didn’t even know what to measure.

Today’s advertisers have some measurement tools and services available to them, but none can claim to be totally accurate. And marketers are dreaming up new metrics every day, so you can be sure that no one measure is perfect, nor can we safely assume that even a group of commonly used metrics can truly give us a reliable picture of the effectiveness of advertising.

Bottom line: Any claim on what percentage of your advertising is wasted and what isn’t is just a random guess. We simply don’t know – and can’t know.

Here’s another claim to consider: Have you heard that its costs five times more to acquire a customer than to keep or retain one? How did they figure that? You could double the number of insurance, credit card, or mortgage customers you have by simply tweaking your underwriting guidelines, risk guidelines, or interest rates. No big cost associated with that.

But to retain those customers, you have to incur some big costs to keep branches open, provide call center support, and deliver service in an ever-growing number of channels. Many of the costs you incur to keep the business running are costs that help keep your customers  satisfied – and, hence, keeping them as customers. There’s simply no way the cost of acquisition is five times greater than the cost of retention.

But, wait, that’s not right either. Because all those costs you incur to retain your customers help to make your company the great company that it is. It’s what you’ve built your reputation upon. And without that reputation you couldn’t retain OR attract customers.

Bottom line: There’s simply no way to accurately calculate the cost of acquisition or retention. It involves making too many judgments and decisions on which activities contribute to acquisition and retention. It can’t be done.


These claims – that half of advertising is wasted, or that acquisition costs are five times greater than retention costs – are examples of what I call Quantipulation:

The art and act of using unverifiable math and statistics to convince people of what you believe to be true.

The examples I just gave are just two examples of this widespread practice. In fact, the incidence of quantipulation has grown by 1273% compounded annually since 2003. And I have the math to prove it:

What’s driving this growth in quantipulative activity?

The false legitimacy that quantipulation provides gives quantipulators confirmation that the things they WANT to believe are really true.

In addition, there are many people who want to lay claim to having the secret sauce for marketing success, and sadly, many people who want that special sauce. Quantipulation provides the “scientific” proof that their sauce tastes best.

There are at a lot different flavors of this special sauce that people quantipulate about, especially about customer loyalty, influence, performance metrics and ROI.

I’ll be discussing those things in more detail during the conference. Hope you’ll be there.

Oh, and in the mean time, if I catch you doing anything quantipulative, I’ll be sure to call you out on it. 

Twitter Vs. Facebook: Which Is Better For Driving Purchase Activity?

Compete recently published a blog post called Four Things You Might Not Know About Twitter. Based on its consumer data, Compete concluded that:

“Twitter is more effective at driving purchase activity than Facebook. 56% of those who follow a brand on Twitter indicated they are “more likely” to make a purchase of that brand’s products compared to a 47% lift for those who “Like” a brand on Facebook. This is further evidence that marketers can drive ROI with Twitter by engaging followers through compelling content.”

My take: Nonsense.

Compete is off-base concluding that Twitter “drove” purchase behavior simply because a larger percentage of Twitter users are “more likely” to purchase from a brand than Facebook followers do. The only way to conclude that a source is a more effective driver is by comparing actual purchase activity resulting from specific messages or offers.

In addition, without a measure of what consumers’ purchase intention was before following a brand on Twitter or liking it on Facebook, it’s impossible to determine if Twitter or Facebook is having any impact on the customer relationship (Compete’s use of the term “lift” is inappropriate in the context it was used in).

Even if Compete had that benchmark, a change in purchase intention could not be attributed to Twitter or Facebook unless the messages, content, and offers were identical.

Bottom line: This is just one example of many that claim the “superiority” of one social media platform over another. Sadly, all of them are based on flawed data and assumptions, and misses the important point:

Different platforms are better suited for different types of messages/interactions.

It’s blindingly obvious how Facebook and Twitter differ in terms of the types of messages, interactions, and content each are suited to. As a result, the only way to determine which is more “effective” is in terms of an individual company’s objectives and needs regarding engaging with customers and prospects. And that means that “effectiveness” is based on the message or content — not the platform.

In other words, neither Twitter nor Facebook is “better” for driving purchase activity.

p.s. Note to bloggers/researchers/consultants/pundits: When publishing data that purports to claim that one social network is superior to another for driving purchase activity, ROI, or whatever metric you’re talking about, it would be very helpful if you talked about WHY one platform is better than another. I don’t think I’m asking for too much, here.

Banks: Don't Use Twitter For Fraud Notifications

From a Bank Technology News article titled Westpac, Other Banks Use Twitter to Warn of Fraud:

“When Westpac was recently targeted by web crooks, the Australian bank used another online venue to warn consumers, sending a Tweet warning consumers of the crime. The alert was part of a new trend—using social media to publicly expose online fraud attacks in real time—that Anti-Phishing Workgroup Chairman Dave Jevans says can be an effective way to spread security warnings, if it’s done right. Jevans says that if phishing and other attacks are corrupting trust in the email channel, it makes sense that banks would look to Twitter and other social media to alert their customers. By using Twitter, he says banks can warn customers instantaneously, without sending emails that could be construed as a malicious phishing attempt.”

Interestingly, Mr. Jevans is quoted later on in the article as saying that using Twitter “requires banks to be aware of how the Twitter, Facebook and other sites can be used by crooks themselves. Tweets could be used to spread false security alerts, similar to how email is used by fraudsters.” (I love that: “the” Twitter). 

My take: It makes little sense to use Twitter for fraud notifications.

It’s not so much a security issue as it is a numbers game. 

Pew Research Center reported in December 2010 that 8% of Americans use Twitter, and — more importantly — that just 2% of online adults used Twitter on an average day. 

I haven’t seen any studies on this, but I would bet that the average Twitter user sees less than 10% of the messages that come through their Twitter stream. 

More numbers: As reported on

“Less than one quarter-percent (0.021%) of all big bank customers follow their bank on Twitter. That translates to an average of 208 followers for every one million customers. BofA, the largest bank in the study, had 12,315 followers out of its 55 million customers. Wells Fargo averaged one follower for every 8,635 customers.”

For credit unions, “0.65% of members are connected to their credit union on Twitter. That’s one follower for every 155 members.”

Bottom line: Your response rate on direct mail credit card offers is probably higher than the hit rate of reaching customers on Twitter with important messages.

One potential solution to this could be a centralized Twitter account (maybe the CFPB could do something useful, here) that would be verified by Twitter. Banks could notify the CFPB who would then tweet the fraud notification. In this scenario, consumers would only have to follow one account, and would be assured of the legitimacy of the message.

Top 5 Tweets Of The Week (May 6)

I noticed a very disturbing trend this week regarding the top tweets: References to body parts. This is probably something that I just need to deal with, but references to certain parts of the body strike me as inappropriate for tweeting. But hey, I’m the guy who’s bugged by tweets about what you had for breakfast or a play-by-play account of your plane delay.

[Please note that I haven’t ranked this week’s Top 5 Tweets. Was hoping that y’all would vote on them to determine the top tweets. So the list is in chronological order, and not ranked. Please vote at the end of this post.]


@chrisgiles: You can’t spell “analyze” without “anal”.

As a Senior ANALyst for a leading ANALyst firm, thanks so much for that observation, Chris.


@michelleheath: Stressed. Took a moment to put on lipgloss. Feel much less stressed. What do u do when you’re stressed to de-stress?

Prozac in a lip gloss dispenser. What will they think of next?


@senigri: Love NYC in the Spring. Working from park -chess game on one side, bum picking toes on the other side…Ready to make some sales calls

We all do different things to psych ourselves up for big meetings and events.  Remember the episode of The Office where Jim and Dwight go on a sales call, and Dwight is in the back seat playing air guitar to some heavy metal music and punching the back of the driver’s seat before going in to the call? That’s not nearly as motivational as watching bums pick their toes.


@elwoodicious: My kid picking her nose plucks a booger out and proudly declares, “I found gold, dad.”

What, no picture?


@RockyHunter: I seriously think I just saw a woman with a butt implant. There is no way that was real.

Pictures, people, pictures. I know you’re tweeting from your smartphone, there’s no reason why you can’t tweet the picture. Rocky might be on to something here. I haven’t listened to Howard Stern in a while, so I don’t know if he still does this routine or not, but he used to do a segment called Real or Fake? where he would…I don’t really have to describe this to you, do I? Maybe Rocky could do a segment on real/fake butts. Go for it, dude.


@sharistorm: My original post had ‘wonder bra’ as the #2 best invention in my lifetime but I toned it down for work. Ladies?

Hey, Shari: The question was “what is the best invention of your lifetime?” not “what is Canada’s greatest contribution to modern civilization?”


So here’s the list of top tweets for the week. You can vote for up to 3 tweets, and you can come back and vote as many times as you like.  

Top 5 Tweets Of The Week

For a while now, I’ve been meaning to keep track of the tweets that just really make my day. I did it this week, but probably will get too lazy to do it again. But for the week of April 24th, here are my top 5 tweets of the week:

5) @dolce001:  aite cipher group innit.babu damuwa i cld stat 4rm somwhere ROME waznt built in a day”LMAO dnt wory I wl fix u sumwhr

Since I work for Aite Group, I have a search column set up for “Aite Group” in Tweetdeck. Aite means partner or counterpart in Japanese. It also has some slang meaning, so as a result, I see tweets show up in Tweetdeck from people that I don’t follow (and am not very likely to). If you have ANY IDEA what this tweet is supposed be saying, please let me know. On second thought, don’t.

4) @victoriablogger: RT@factchimp Eating dandelions can make you urinate more.

C’mon, admit it. It’s tweets like these that make you realize how truly valuable Twitter is.

3) @aden_76: Thighs aching, lungs burning. All worth it.

It’s bad enough that people tweet the play-by-play of their airplane delays, or what they had for breakfast. Now I have to endure tweets from my Twitter buddies about when they have sex. Oh, and since I know you’re wondering: No, I did NOT click on the picture.

2) @priteshpatel9: Oh yeeeeeeesssss!!!!! Two Krispy Kreme dog-nuts left in the fridge!

This just goes to prove that if you pay attention on Twitter, you can learn something new every day. On the day of this tweet, I learned TWO new things. First, I never knew that Krispy Kreme sold dog nuts. Second, it had never occurred to me before to keep my dog’s nuts in the refrigerator.

And the #1 tweet of the week….

1) @Jimmy Marks: Bear and Rabbit are pooping in the woods. Bear: “Does poo stick to your fur?” Rabbit: “No”. So the bear wipes his butt with the rabbit.

The Slippery Slope Of Social Media Accountability

Apologies for being the gazillionth person to raise the subject of the tweets from the New Media Strategies employee and Gilbert Gottfried that got those two individuals in trouble, and ultimately, fired from their positions.

But I think that the accounts of these stories, and the opinions offered in them (as well as in the comments associated with them) are avoiding an important question that’s being left unanswered: Where’s the line?

I have no idea what Gilbert Gottfried actually tweeted, but I am inclined to believe that joking about the situation is Japan is not just bad taste, but “wrong.” If I were running Aflac, I think I would have fired him as well.

The New Media Strategies example doesn’t seem to me to be on the same scale as the Gottfried tweets. In fact, to be honest, I’m not sure I really know which of these was the more heinous offense: Cursing in a tweet, or insulting the citizens of the clients’ home city? Maybe it was the combination. And the connection between the topic of the tweet and the product sold by the client.

Many of the media stories about these situations stress the need for social media “accountability.” The New York Times’ article When the Marketing Reach of Social Media Backfires is typical. I have absolutely no issue with this article or viewpoint. I agree with pretty much everything said or implied by the article and the folks quoted in it.

But again, I have to come back and ask: Where’s the line?

For example, here’s a February 6th tweet from Bill Maher:

“Man, the ad agencies just punted this year on clever – ah, fuck it, dogs at a party serving beer, its just the Super Bowl”

Hmm. Let’s see, here. We’ve got the compulsory curse. And then there’s the insult — in this case, of ad agencies.

Should this be a fire-able offense? We have the same “vulgarity” (the New York Times’ word) being used. And there’s the condemnation of a whole group of people. Maybe since HBO doesn’t sell advertising, it’s OK for Maher to insult ad agencies. Or maybe it’s OK to insult/criticize ad agencies because they’re just annoying. OOPS! Look what I just said! I hope I don’t get fired for that slip of the social media tongue.

Let me be clear: I am not advocating that Bill Maher be fired. Yes, I don’t like him, and I hardly ever agree with anything he says, but I support his right to say whatever he wants. All of that is moot. I’m simply using something he said to point out the inconsistencies and gray area in this “social media accountability” situation.

Should people who re-tweeted Gottfried’s or the New Media Strategies’ tweets be fired from their jobs as well?

One natural reaction to this whole situation is to say “we need a policy.” In fact, in the NY Times article, Craig Macdonald, chief marketing officer at Covario in San Diego, an agency for search advertising and social media advertising, is quoted as saying:

“Offer employees some sort of certification course and tell them, ‘We’ll tolerate some negativity and dumb stuff, and we’ll course-correct as we go along.’ Then monitor what they say, course correct — and do better next time.”

I really like this suggestion, especially because it reflects some degree of tolerance for error. I am willing to bet, however, that other firms will miss that nuance, and institute policies that aren’t as forgiving (as New Media Strategies would appear to be, by firing the employee who tweeted the offending tweet).

But even a “tolerance for error” isn’t a solution. There will always be some statements that some people will find more offensive than others and claim that there should be no tolerance for those statements. And I actually agree with them, even though I support Macdonald’s call for tolerance.

All in all, not an easy subject to deal, hence, the slippery slope of social media accountability.