Chief Customer Officer
Major public social networks like Facebook and Twitter rightfully get a lot of attention with regards to social media marketing because of their large audiences and integrated marketing tools, but more companies are looking to integrate social elements like communities into their own customer experiences. Misha Logvinov, chief customer officer for social media technology provider Lithium, spoke with eMarketer’s Bryan Yeager about how financial services companies are building their own social experiences to get more control and better insights while empowering customers in the process.
eMarketer: What challenges do financial institutions face with using social media for marketing?
Misha Logvinov: There are three key challenges that stand out. First of all, digital and social are generally noisy and pretty confusing. How do firms stand out from their competition? In addition, financial products and services are continuously getting commoditized. How do financial services companies innovate, do it faster and differentiate themselves? Most important, how do firms rebuild trust with customers and cultivate long-term customer loyalty?
Historically, financial services companies were not playing the role of the early adopter. Technology and telecommunications companies led the charge and definitely embraced social early on. Nevertheless, we are seeing rapid development in the financial services space, with more companies starting to jump in. There are different use cases that they employ today with using Lithium.
eMarketer: What are some of those use cases?
Logvinov: One of our customers is Commonwealth Bank of Australia. The firm infuses different parts of its digital ecosystem and solutions with peer-to-peer and community-enabled functionality. One example is CommSec, the company’s investor trading platform where it uses communities so its customers can monitor, buy and sell stock directly from the community and exchange ideas about it. They can do detailed research, and most importantly, interact with user-generated content, which is inherently trusted.
The reason why it’s trusted is because it’s generated by their peers, who are also like-minded investors—investors with a similar profile to themselves. Inherently, they trust these people more than they would trust a brand or a company, or even an analyst. A big question for us right now—and I would say it’s an experiment for the industry—is to see whether some stock predictions and performance for some of these companies crowdsourced through the community will actually be more accurate than what analysts do.
“A big question for us right now … is to see whether some stock predictions and performance for some of these companies crowdsourced through the community will actually be more accurate than what analysts do.”
Commonwealth Bank also uses communities to augment and potentially replace a big portion of its customer care. The company directs a lot of customer care questions to other community users and also augments that with some content provided by peers and its own customer care agents. The firm puts social at the front line for its customer care, and by doing so, reduces the impact on its call centers and drives significant cost savings across the board.
An example of a financial services provider in the US is Oppenheimer Funds. What Oppenheimer has done is integrate social into its platform and resources for financial advisors. The company has thousands of financial advisors all over the country, so now its most vocal, most influential financial advisors can start engaging with each other and also start outreach outside of their brand, soliciting people to join the community and discussions. They help other financial advisors within the community become more successful, as well.
We have this concept of 90/9/1: 90% of the community members are essentially passive participants, where they come, listen and get influenced by existing trusted content; 9% start to participate in the community in some way; and 1% are truly superfans or influencers who generate most of the content and do most of the evangelism and brand advocacy around what you’re doing. We help cultivate this 1% to help with thought leadership within the rest of your customer base and beyond.
eMarketer: How are financial brands approaching customer engagement on social media, especially around servicing?
Logvinov: They start listening to conversations and build capabilities around responding to them in a very rapid manner. That’s where I think the big industry shift has happened over the past few years—the bar has gotten a lot higher when it comes to consumer expectations for response to their complaint. In the past, it could have been acceptable to wait a few days or even a week before you respond as a supporter of an organization. But in the world of real-time Twitter or Facebook interactions, or other peer interactions in a community, that’s not enough.
“[Because of social media], the bar has gotten a lot higher when it comes to consumer expectations for response to their complaint.”
People want instant gratification, and if they don’t hear back from the brand within a couple hours, or even minutes in some cases, it creates a very negative impression on the consumer. Creating capabilities and processes and having the right platform behind them to be able to hear these conversations, prioritize, scale and manage them—almost like you would manage a traditional call center—is critical.
Ultimately, you want to tie that to a trusted peer exchange or community so you can direct people from Twitter and Facebook to on-domain resources, where users can now start engaging in conversations directly with their peers rather than just always relying on hearing from the brand.
eMarketer: How mature are financial institutions with their social media practices in comparison with other industries?
Logvinov: I think the financial industry is not an early adopter, but a fast follower. You’re definitely starting to see more forward-thinking financial service providers integrate social into the customer experience. That has been triggered by factors like trust, where firms realized they had to be on social because customers are out there talking about them to their friends and acquaintances. Banks and other financial institutions were not a part of that conversation, so they wanted to insert themselves into that conversation and essentially help get all of these benefits by doing so.
“The financial industry is not an early adopter, but a fast follower. You’re definitely starting to see more forward-thinking financial service providers integrate social into the customer experience.”
There are certainly opportunities for innovators in that space to really get competitive advantages over other financial services providers by implementing an online community or starting to do social response and addressing some of these marketing, customer care, or service innovation use cases. We have started to see that taking off over the past couple of years.
What we strongly believe and what we see happening is that brands want to bring social experiences on-domain. They want to use some of these public social networks or even external communities to acquire customers, because this is where consumers already go to or may be going. But for engagement and enlistment of these customers for other purposes and to benefit the brand to help build that loyalty, it basically has to be done on-domain. Listen to all of these sources out there—Twitter, Facebook, LinkedIn, Google+ and other public independent communities—respond to these conversations as needed. But start bringing these people over to your own domain, and start engaging with them directly there.
On public networks, you don’t have the depth of analytics or insight about customer experience and customer behavior. Ultimately, you want to have it on-domain, because you really want to start creating the concept of a social customer profile. Traditionally, we have CRM systems where you know what customers purchased over time or how they behaved within your CRM environment. That can now be augmented with the social graph and social customer experience insights—what they posted about you, are they an influencer in your industry, are they someone you want to enlist for other things within the domain of your products and services? Doing that engagement and enlistment on-domain rather than off-domain allows you control your own resources.
eMarketer: How will financial firms evolve their use of social marketing over the next 12 to 18 months?
Logvinov: I think the word social will probably start disappearing gradually. Maybe not within the next 18 months, but I would say probably in the next two to three years. Today, people think of social as being a silo or some isolated entity. But social is so disruptive, and ultimately, we are social creatures; we like to share, we like to talk about things, and I think it will just become completely ingrained in everything we do. I think it will become ubiquitous; it will essentially become part of everything you do from a social marketing or social customer experience perspective. It will become the customer experience. It will become marketing.
I think the financial industry, while not the earliest adopter, is spearheading a lot of these initiatives. I think we will see much broader adoption of these capabilities and approaches within the industry on a much broader scale over the next 18 months, especially as some of these successes and disruptions become more visible. Social essentially allows newcomers in the space—more innovative companies to level the playing field with some of the larger, more entrenched organizations just by being faster and more customer-focused. The larger guys are waking up to that.