The Role Of Social Gets Clearer For Financial Services

To this point, marketing and specifically interactive marketing have been the focus of social and its applicability to financial services. A colleague of mine – Nate Elliott – has written on the opportunities for the industry on a few occasions, and if you have not seen his work, please check it out.

The role of social outside of pure marketing has been less clear to this point, and it is only now that we can see the areas social can move the needle for financial services. Over the last year, Forrester has written numerous reports and case studies on the subject, and I wanted to highlight a few key areas of social strategy and related reports on the subject. In my view, those areas include:

  • Online sales. For years, marketers have used testimonials to sell products and services, but that concept was foreign to most eBusiness executives in charge of online sales then USAA showed the way. USAA uses customer ratings and reviews to drives sales on their web site. The essence of the strategy is to use the “authentic voice” of the customer to win over would-be shoppers, and represents a great way to tap the good will that USAA has garnered over the years with it customers. During a nine month periord in 2009, the utilization of customer ratings and reviews drove nearly 16,000 incremental product sales.
  • Product development. Who best to ask about what and how to develop new products than customers themselves? But that type of customer input can be expensive and time-consuming to gather. Not so anymore. Analyst Doug Williams wrote a great report on how Chase and IHG teamed up with Communispace to tap the collective brains of their private online community to develop a next-generation Priority Club rewards credit card product. The result is a credit card that is better suited for its intended segment because it was developed in consultation with the segment.
  • Customer service. The bread and butter of online strategy for financial services has been customer service, and that aspect is growing in the social space. Twitter can be a hotbed of customer concerns and questions, and a litany of financial services companies are listening and proactively helping these clients. Why? Because an angry customer that gets help (even partial help) is much better than an angry customer left to brood and spread their concerns to a well-connected community.
  • Community support. Different aspects of financial services (ie, retirement, mortgage refinancing) are often fodder for conversations we have with family and friends, but there are certain segments of customers that desire to interact on a more formal and frequent basis. These segments are the seeds of a potential social community strategy. Trading communities like the one offered by TradeKing and most recently by E*Trade are examples of these communities in the investment space. In addition, we are seeing communities pop up in the small business space primarily because small business owners desire to share and learn from other small business owners on many aspects of "running" the business. We recently published a report around the American Express OPEN small business online community. A great example where segment, strategy and social come together.

Do you have any other good examples of social used outside of marketing in financial services?  If so, please share as it is a top question among our eBusiness clients in financial services.

Thanks.
Brad