Within the last six months, we’ve seen an increase in the number of client and prospect banks asking about tapping into the growing network of social media. Of all the marketing strategies available to them, some banking professionals believe Twitter and Facebook might solve their sagging loan demand and bottom lines. Call me old school, but after more than 20 years in the marketing and financial services industries, I’m having a hard time wrapping my arms around how a small community bank would even consider such a notion – much less dedicate precious resources toward it.
Don’t get me wrong. Anytime a bank shows interest in marketing or reaching out to customers and prospects is a red-letter day. After all, most bankers put traditional marketing right up there with “taking out the trash” when they list their day’s priorities. But with all of the issues surrounding most banks today, is Twitter really the answer to a more profitable tomorrow?
The irony is not lost on me. A community bank with a Facebook page is like a student driver asking to take his test in a Ferrari. Easy, laddie. Let’s make sure you have the basics of communications down first before we upgrade you into a vehicle that is extremely fast, requires a ton of maintenance and, if you’re not careful, can get you into a lot of trouble.
Here are five reasons why I think banks under $500 million should seriously reconsider any ideas of launching a social networking initiative.
1. Internal Resources
Banks have been misled into believing that it’s easy. Anyone can have a Twitter, Facebook or YouTube account up and running in minutes. Creating a social media presence, however, is the easy part. Finding social media success is hard. It takes care and feeding and a ton of quality writing. And most community banks I’ve visited in the last 10 years don’t employ professional writers. Marketing departments are already stretched thin. To find any success with social media, most banks will need to create at least one fulltime position. And remember, if your social media projects don’t take a lot of time, you’re doing it wrong.
Some community banks seem to think that social media is immune to the fundamentals of marketing. As the great showman P.T. Barnum once said, “Without promotion something terrible happens — nothing!” Too many believe in a Field of Dreams approach: “If I build it they will come.” No they won’t. You will have to spend time, money and resources to direct people to your social media. It doesn’t just happen with a cool video or blog idea. Self-promotion is a big part of getting the word out. Add on the sweepstakes, promotions, mailings and giveaways you’ll need just to promote your initiative and you’re talking a pretty big expenditure for a risky (and likely unprofitable) first step into social media.
3. Wrong Reason
Before you launch your social media initiative, ask yourself a simple quesiton: “Why are we doing this?” The majority of financial institutions embarking on these projects aren’t really sure. Maybe they heard someone talk about how important it is at the last tradeshow. Maybe they’re feeling peer pressure from the fear of being left behind. Maybe they’re bored and they just want to do something. Yes, young consumers are online. Yes, social media is growing. Yes, other financial institutions have social media projects. But no, none of those are sound reasons to launch a social media project.
4. Less Is More
The most precious commodity on earth is time. People’s time and attention have become so severely strained that people don’t even have the time to do the things they really want to do — like spending time with their kids. And yet financial institutions presume that consumers will spend 10 minutes reading their blog or engaging via Facebook. To consumers, the deluge of brands competing for their attention blurs into a deafening white noise. Instead, find ways to help people spend less time interacting with your organization, not more. Freeing up people’s time is a benefit to them. Consuming more of their time really only benefits the bank.
5. Track Record
Think about your previous communications efforts with your customers. Do you have a newsletter right now? If so, when’s the last time you published? More importantly, when’s the last time you published something interesting and useful for your customers? (And, no, that soccer team car wash you sponsored in 2009 doesn’t count.) Banks, like other businesses, think customer communications are a great idea. The first issue is paraded out with much fanfare. Everyone is so proud of themselves. What a crowning achievement. Fast forward two quarters from now, and you’ll see lethargy and dread on the faces of the newsletter guy. “We have to publish another one?” That’s right. You started this mess and you’re going to finish it. So if you already have a lousy track record with a quarterly newsletter, think how stale your Facebook page will get when you’re expected to add something meaningful and interesting every day or week!
Most community banks under $500 million in assets probably lack the budget and staff to sustain any kind of serious, long-term investment in social media. In all likelihood, there are probably other things more important than social media — things with more immediate relevance to your organization’s brand and, ultimately, bottom line. Our next entry will outline some of the more important and pressing tactics that community banks should be doing to connect with their customers.