Assignment 2 | Social Media

            Like with any delivery channel a brand wishes to market themselves on, determining where to direct limited resources relies on developing a fundamental business plan with clearly defined goals and the means to measure it. The goal, with any business plan, should never be to follow the same method as a competitor without providing some level of differentiation between a product or service. For social media, for example, just because a competitor is on specific platforms, it doesn’t necessarily mean your business needs to be on the same. It comes down to setting the specific goals for your brand and the means into which to accomplish them.

            Social media platforms are becoming more necessary to market a business within a competitive market and to show a certain level of professionalism. This may not necessarily apply to every business, as the nature of that business may not warrant a social media profile. If you think this is incorrect and every business should have a presence, consider this – would an individual gas station perform any better if it was on any social media platform? For a franchised business, like a Subway or McDonalds, would it generate any additional substantial revenue for engaging in social media above and beyond what their corporation engages in? Clearly Exxon Mobile as a Fortune 100 company will have a strong social media presence because they have the resources to, but an individual franchised retailer would not necessary have a strong business need to engage in a platform. It should be noted that this is different than saying a blanket avoidance on general advertising, the discussion for social media is more nuanced on the specifics and the return on investment.

            As most businesses will want to have a social profile as it can help a brand be profitable, the question comes down to which one, and how much of an investment (in time or funds) should one place on generating content. Brian Solis, in his article “21 Rules of Social Media Engagement,” gives many clear guidelines to consider before a business ventures into a social media platform. “Determine the identity, character, and personality of the brand and match it to the persona of the individuals representing it.” (Solis 2010). This rule requires a basic level of demographic and psychographic data on your own customers to decide.

            For our example, I will use a mid-market, regional financial institution as this is my current professional background for more than 10 years. This type of institution offers the same traditional banking services as much larger financial institutions, but it is not a household name such as Wells Fargo, JPMorgan Chase, or Bank of America. The typical customers trend to be a bit older, wealthier, and more self-employed than the average of the geographic area they serve. This is typically due to the savviness of the customer who is looking for a “better deal,” which a regional bank must offer to compete against the service network of a multinational financial institution. When looking at this type of customer, this financial institution would want to consider Facebook, due the age of their users.

            “American women and men between the ages of 25 - 54 make up 32% and 29% of Facebook users, respectively. And only 9% of users are between the ages of 18 – 24,” writes Jia Wertz for Forbes, based on information from Satatista.com. “If your company targets a slightly older market, it could be very valuable since 44% of users check Facebook several times per day.” (Wertz, 2017)

           

(Wertz, 2017)

            Deciding on using a platform like Facebook is easy. The hard consideration is what level to engage in knowing that more content breeds move conversation, which will more dedication from the business. A mid-market financial institution has a high level of marketing resources, and proficiency within marketing to afford robust social media engagement. The resources, however, are not limitless, and where multiple priorities exist, the company may choose to prioritize other promotions over social media. This is especially pronounced in the financial services industry where most every dollar spent is justified with a return on investment (ROI). It is easy to quantify a campaign that preapproves 30,000 customers for a credit card with a 9% APR interest rate where the expected response rate will be 3%, generating $150,000 in interest income within the first year. It is much more difficult to quantify a return on a $30,000 social media campaign that includes giveaways, original content posts and advertisements that drive social engagement. While there are great platforms available online to help track conversions and prospects that engage with the brand further, it still relies on the business setting a dollar amount on how much that social media engagement relies. Yelp is one example of this, as their business owner’s portal attempts to quantify the “Revenue Estimate” for each of the users that engages with the page.

Example of a Revenue Estimate on Yelp Business Owners Page(Yeung, 2013).

            While Facebook can provide a good platform if an institution has the means to engage in conversations with uses, and generate relevant content, Yelp would be the next logical platform to engage with for a financial institution that may not prioritize original content. While Yelp is a user generated platform, a retail service business like a bank should be engaged with platform to manage positive and negative sentiment of the brand. Since the focus is not centered the business around driving original content, it is a low engagement social media platform that can be effectively managed for a positive rate of return.

As Brian Solis writes, “participate where your presence is advantageous and mandatory.” (Solis, 2010) For Yelp, it is extremely advantageous to address negative experiences so that users can hear directly from the business in response to that negative review. It also helps internal culture when you share a positive review with staff, alerting them to a customer who took the time to write a review about their experience. While the platform is not necessarily geared towards banks, unlike “discovering” a new restaurant,” it is still important for reputation management.

Note: Financial Services are not on this list from Pinterest (Wertz, 2017)

Regarding more visual social media platforms, such as Instagram, Pinterest and YouTube, financial institutions are at an immediate disadvantage due to the nature of their business. Banks do not have a physical product to display and the typical visual content they produce is advertising, which would show poorly on social media. Additionally, images of customers engaging with the product raises privacy concerns – you can’t exactly show a customer withdrawing $10,000 in cash from the teller window with congratulatory hashtags! Mid-size institutions are a disadvantage over larger institutions due their ability to produce quality content that would be worthwhile for the users of that platform to interact with. As Solis mentions, social media platforms must be advantageous for the brand to use and more visual platforms do not fall into this category. In looking at social media platforms, mid-size financial institutions should focus on delivery channels that allow for more copy-heavy sharable content that tells a story through a written experience rather than a visual one.

References

Solis, B. (2010, May 18). 21 Rules of Social Media Engagement. Mashable. Accessed from

http://mashable.com/2010/05/18/rules-social-media-engagment/

Wertz, J. (2017, February 18). Which Social Media Platforms Are Right For Your Business?

Forbes. Access from https://www.forbes.com/sites/jiawertz/2017/02/18/which-social-media-platforms-are-right-for-your-business/#3c0d11612a2f

Yeung, K. (2013, March 25). Yelp releases a free new revenue estimation tool for local

businesses available starting today. The Next Web. Accessed from https://thenextweb.com/insider/2013/03/26/yelp-releases-a-free-new-revenue-estimation-tool-for-local-businesses-available-starting-today/