By: D. Bruce Johnston, President, DBJ Associates
That’s 12 million people engaged in 27.3 million conversations on Twitter every day. They are branding your company even if they are not mentioning you. That kind of branding is called “ignoring the non-entity.” In financial social media marketing and every other industry it’s the branding of the invisible.
This increased and increasing volume of “conversation” is indicative of the heightened adoption of social media in general and reflects a significant shift in how marketers approach customers. The shift from talking “at” customers to having a conversation “with” them has begun in earnest.
Watch Mad Men on AMC and see the difference between an ad monologue to many and a one-on-one conversation. Brands no longer say to their customers what they are. Rather, it is the customers themselves who are saying to the brand, “Here’s what you are to me.”
“You can’t just say what the brand is. You have to get the people to say it to each other,” says James Farley, CMO Ford. By giving away 100 Ford Fiestas to influential bloggers, 37% of Generation Y was aware of the Ford Fiesta before its launch in the United States. Is it any wonder why 25% of Ford’s marketing spend has been shifted to digital/social media initiatives? And, for those keeping score, Ford is the only U.S. auto company that didn’t take a government loan.
Social media applications, like Twitter, are where the customers, prospects, cynics and champions of your brand reside. Like it or not they are talking about your brand, forming opinions about your brand and sharing that opinion with anyone that will listen – 27.3 million times a day.
Given this new communications paradigm what should financial services product originators and distributors do?
Let’s talk about what they shouldn’t do first – they can’t cut their way to growth. They’ve been there, done that and it doesn’t work. It does however assure that firms doing this will lose precious ground to savvy competitors who are engaging their customers on a regular basis.
Throwing money at wholesalers, internals and marketing types is expensive and not likely to be tolerated during this time of margin and scale compression. Although the last half of 2009 will help margins they are still projected to be down from just below 30% in 2008 to just over 25.5% in 2009. If investor comfort with fixed income persists firms have but one choice to achieve scale, bring in more assets.
There I’ve already given you the answer: Engage customers through social media to improve sales, scale and margin. To engage customers get this right: “Social media is not about being promotional or selling, it’s about engagement”.
A Wetpaint/Altimeter Study: “The World’s Most Valuable Brands, Who’s Most Engaged” ranked the top 100 global brands. The study found those companies that are both deeply and widely engaged in social media significantly surpass their peers in both revenue and profit. The study places brands into one of four engagement profiles. Mavens are those firms with the highest level of social media activity and Wallflowers are those firms with the lowest level of social media activity.
The study reports that Mavens experienced Gross Revenue growth of 18%, Gross Margin growth of 15% and Net Margin Growth of 4%. Wallflowers saw their sales decline -6%, Gross Margin growth decline by -9% and Net Margin growth decline by -11%. Maven results would certainly improve the three statistical areas that most financial services executives monitor on a daily basis. Yet as compelling as these results are a recently released Forrester Research report finds financial services companies will spend only $200,000 on social media in 2009, the least amount of any industry.
The trick for financial services companies is to create meaningful marketing content that rises above self-promotion and allows you to connect directly with your customers? Start by listening. Since listening is the basis of trust in all relationships it allows companies to determine what information will be the most relevant and valuable to their customers. Use this information as the cornerstone of building a trusted relationship with your customer. If you are concerned about where your customers might go when the equities markets return spend the bulk of your time here developing their trust.
Your customers can now get information anywhere and your urge is to sell products. The new marketing isn’t about self-promotion; it’s about giving customers what they need to become educated consumers. We have entered the age of content and education marketing. If you want customers to see your brand as the trusted information source, you must begin to think like an information provider, not just the provider of goods or services. By empowering customers with genuine news and information, a company becomes one-half of a trusted relationship.
If your customers view your firm as representing an idea or theme they care about, they will engage you on a one-to-one basis engaging in two-way dialogue. However, if customers view you as just promoting products and services, they have to be willing to be the recipients of a one-to-many, one-way monologue. At this point more and more individuals choose to opt out of the one-way monologue.
Social media has changed the rules. Once an individual finds a better service or product through a peer network that affirms or changes their opinion, they can’t go home again. They can’t go back to the one-way monologue from a company for their sole decision-making input — no matter how good its products and services may be.