Findings from ABA Research
ABA recently conducted a nationwide survey of 780 banks of all sizes to find out how they are managing social media programs. What are the results banks have seen from their efforts so far? What do they wish they could do better? And what are the opportunities and challenges they see on the horizon? The final report, The State of Social Media in Banking, generated a wealth of data—and some recommendations for what banks can do differently.
For all the energy banks have been putting into social media, has it been worth it? According to ABA survey data, some 44% of respondents reported being somewhat satisfied with the results of their social media efforts. And only 9% were extremely satisfied. Another 23% were neither satisfied nor dissatisfied. Nearly one-quarter (24%) were somewhat or extremely dissatisfied.
This lukewarm report card may be a reflection of the way social media is being measured.
For starters, 22% of banks surveyed don’t even measure the impact of their social media use. It’s hard to be pleased with results you don’t know about.
None of these measures links social media activities to business results. Sometimes that connection is clear—a campaign led to “x” clicks on the blog which led to “y” click-throughs to an online loan application, for example.
At FirstBank in Colorado, they strive for tangible results. “We do look at followings and likes and overall reach, but we also run account acquisition programs through social media,” said Gordon Banks, FirstBank’s senior vice president for marketing. “We are able to track the acquisitions very accurately and have seen excellent results.”
But more often the benefits are intangibles—awareness, relationship-building, goodwill—that lead to business wins in ways that are almost impossible to trace.
“It’s hard to evaluate the impact in terms of the bottom line,” said Jeff McCarthy, vice president of marketing at First Bank Financial Centre in Wisconsin. “But you can get some handle on whether you’re succeeding by whether your social media footprint is growing. In the last year our Facebook page likes doubled and the number of followers on our LinkedIn page is up tenfold. We also look at our engagement levels—likes, shares, and comments—relative to other banks. There are banks that have 20,000 or 25,000 likes on Facebook that have 40 or 50 engagements per week. It’s not unusual for us to have 300 or 400 engagements per week. That means people are valuing the content, sharing it with their friends, and commenting on it. Our engagement levels are showing that we’re having a conversation with people.”
Those conversations have value.
“Consider that 77% of consumers are more likely to purchase a product when a friend has mentioned or recommended it,” said Ryan Bell, chief product officer and chief technology officer for Gremlin Social. “Social media has enabled banks to build relationships with their customers and also to leverage the relationships that employees have with their connections to influence their buying decisions in a subtle way.” That circle of influence is there, but it’s hard to track. Bell pointed to a case study Gremlin Social conducted where a community bank was active building a social media presence that led to 3,800 new accounts in the review period.
“We track all those metrics—clicks and likes—but for me the value is the conversation,” said Jill Castilla, president and CEO of Citizens Bank of Edmond, in Oklahoma. “For example, if 5,000 people saw you at a Chamber of Commerce meeting, what really matters is who you interacted with. So I would be cautious about really leaning on statistics. You may get brag numbers that you got a million interactions this month, but that’s not as meaningful as having great deep conversations with someone, building a relationship where 50 or 100 people tell the newcomer, ‘You should bank at Citizens Bank of Edmond.’ The magic, the secret sauce of social media are those interactions. It’s about building relationships and building communities.”
Return on investment is strong because the investment is small.
It is likely banks will continue to shift marketing dollars away from traditional channels in order to reach prospective customers. When First State Bank in Nebraska recently purchased a smaller bank, they learned it was advertising in the local newspaper’s TV guide for $6,000 a year. “We shared a newspaper article about us purchasing the bank on our Facebook page and paid $50 to boost the post,” said Derek Randecker, vice president at First State Bank. “We ended up having the post viewed by 30,000 people and the town’s population was around 23,000. It really showed there were other ways to more effectively reach our audience.”
Social media delivers a lot of bang for the buck. “We always walk a line on return on investment on marketing activities,” said Castilla. “With social media, the investment in time and money is very, very small. We still spend about $25,000 on traditional advertising, mostly as a courtesy to the local newspaper and billboard companies, but we have shifted our entire advertising and marketing focus to using social media as the foundation. Social media has really been the salvation of our marketing plan.
“I think one of the reasons that our social media presence works so well is that we’re not trying to achieve X, Y, and Z, like how much volume did we get from going to that Chamber of Commerce luncheon or doing that Habitat for Humanity [event],” she said. “It’s about authenticity and social value. People contact the bank about loans not because Citizens Bank of Edmond competes with big banks on loan rates, but because they want to be a part of what the bank is doing through the community, as seen through social media.”
The bank’s social media presence has also led to increased local media attention for the bank, creating a rippling circle of mentions, interviews, and free advertising.
Online training in digital, mobile and social media from ABA.