Brand reputation the key to banks leveraging social media.
Recently I wrote about how the shifts in consumer behavior and technology adoption are significantly changing the marketing dynamic for banks. Essentially my message was that for marketing to continue to be effective in measurable ways, a large portion of effort needed to be redirected to optimizing the mechanisms for reaching and enabling customers, rather than just reinforcing brand recall and directing campaigns.
I have had some brand marketers bristle at this suggestion and ask me how brands themselves would get started or get known it it weren't for the fundamentals of brand marketing. First of all, I don't believe that brand marketing will disappear, however, I think it is fair to say that social media brings a transparency and honesty that shows, despite the best brand marketing money can buy, if you screw up your customer relationships, it won't matter -- social media will punish you. Google was able to build its brand entirely online, so some might argue that the need for traditional brand marketing is no longer a given either. However, for banks right now, they need all the help they can get, so it can't hurt.
Brand marketing is useful for telling us, as consumers, the core brand values of these organizations who want our business. Banks have long held up their brands as bastions of stability, trust and understanding. They kept telling us that they were safe places to hold our hard earned savings, and that when they loaned us money we should be eternally grateful, because it was only out of their gracious generosity that we were able to afford to buy that new home, car or trip to the Caymans. We could trust banks because they were "as safe as houses"! Well, guess what ... thanks to banks, even houses aren't safe anymore.
The side-effect of the global financial crisis, and the huge botch up that leading financial brands like Bank of America, Citi, Merrill, JP Morgan, Goldman Sachs, RBS and others have made with their bonuses and lack of prudence, is that trust for banks is at an all time low. Brand marketing is not going to save the banks in this environment.
Right now if you go and do a twitter feed search on say ... Bank of America, you'll find a plethora of negativity out there in cyberspace. Now, to be fair, BofA has a twitter feed (@BofA_Help) and they have a Blogsite -- although it should be pointed out that their blog has no content as yet ...
The key issue is that although Bank of America has a brand built over more than a century, their brand presence across the USA is pervasive, and their marketing capability staggering, they face an uphill battle. None of that capability really can help them in the current environment where they lack transparency on fees, are generally seen as out of touch with customers and are struggling in the war on customer word of mouth impact. Brand marketing is not enough to win in the 21st Century -- the BANK 2.0 paradigm. Banks need to rebuild their brand reputation -- and telling us how fantastic they are won't cut it. We just don't trust those messages anymore.
What customers long to see is banks that care. Banks that reward you for the more business you do with them. Banks that are prepared occasionally to waive fees because you are a good customer. Banks that try to make it easier to work with them, instead of the endless compliance hoops we have to jump through because the banks find it to much trouble to change their internal processes.
We want the banks to build their brand reputation by restoring their reputation with us -- the customer.
Social media is empowering customers -- giving them a voice. It's time major brands took the time to listen and adapt. Most banks spend millions on focus groups, customer satisfaction surveys and mystery shopping exercises each year to find out what they can learn for free just by listening to their customers on social networks and blogs. It's not rocket science -- but it is good branding.