Social Media's Tortoise and the Hare

We've all heard the Aesop fable of the Tortoise and the Hare.  In the story, the hare, speedy and full of bravado, fails to win the race against the slower tortoise.

The financial services industry is undergoing its own version of the fable with respect to social media.  On the one hand you have firms such as Chase, giving away $1 million dollars through Facebook.  On the other hand you have firms such as Morgan Stanley, reluctantly entering the world of social media by getting every tweet, LinkedIn post and other social media comments pre-approved by "corporate" before making the messages public.

While it is important for every firm to understand the influence of social media, it is just as important for every firm to do it in a manner that is consistent with the culture and governance style of the firm.  Some firms, such as Chase, are very comfortable jumping into social media with both feet.  We'll call them the hare.   This is a function of the culture at Chase.  Some firms, such as Morgan Stanley, are more comfortable taking calculated steps.  This too is a result of the corporate culture.  We'll call them the tortoise.

Unlike the fable, this is a race where there is likely no loser.  What is important here is that organizations move into social media at a pace at which they are comfortable.  As stated on this blog many times; most important is for firms to actively "listen" to social media to determine what is being said so that appropriate responses can be provided.  Beyond listening (which IS mandatory for all), every firm should move at a speed at which they are comfortable.

Some firms will train and trust their employees as brand ambassadors and unleash them to do their thing on social media.  These firms will have no problem sleeping at night.  Other firms will limit employee access to social media and will screen and pre-approve all messaging.  For these firms, this is the only way they can sleep at night.  While social media proponents will push for the former, the reality is that either approach will work.  What is important is that the firms implement something in order to remain visible and competitive.

The Age of the Thick Skinned Banker

Amplicate, a social media analytics company, released a report that suggests that banks need to develop thick skin, really thick skin, in the new world dominated by social media.

The Amplicate study revealed that 83% of opinions about major banks in the US and Europe were negative over the past 12 months.  The study focused on large money center banks and not on the smaller community banks.  While community banks would have likely performed better due to their reputation as being more consumer-friendly, the lesson is the same: bankers need to learn to deal with and manage criticism like never before.


Social media makes it easier than ever for consumers to make their complaints public.  Look at Bank of America's recent social media troubles related to its $5 debit card fee.  The public outcry resulted in a complete about face by Bank of America and created significant damage to the Bank of America brand that will take some time to repair.

Banks' knee jerk reaction may be to avoid social media altogether in an effort to avoid the criticism.  However, as has been repeated many times on this blog, the criticism will occur regardless of a bank's stance on social media.  A better approach is to play offense and implement a social media monitoring system that tracks what is being said about the bank and responds in a transparent and honest manner in a effort to prevent the criticism from snowballing in a manner similar to that experienced by Bank of America.

Bottle Service with that Social Media

One of my favorite social media videos remains this one by Socialnomics.  I must admit that I get quite pumped up after watching and listening to this video by Erik Qualman.  Erik put together one of the best business-related videos ever!  This explains why this video has gone viral and has provided such a tremendous boost to Erik's company.

I've attended and participated in more social media events than I can recall.  In so many of these I hear talk about going "viral."  For social media marketers, including those that represent banks, this represents the holy grail.  The reality is that very (very) few initiatives will ever reach "viral" status.

I like to use this video as example of what it takes to get an initiative to go viral.  The visuals of this video along with the beats made for an emotionally-charged video that encouraged not only sharing, but repeated viewing.  The combination of music and visuals created an emotional charge among viewers, almost turning viewers into Viral Zombies.  Viewers have no choice but to share this video (I'm sharing, aren't I!).

I don't mean to discourage organizations from seeking the holy grail of social media sharing.  I just want to make sure that it is understood that social media is about being "social."  And before anything is shared - especially at the "viral" level - it must appeal to the social side of our existence.  In this case, viewers of the video get their blood pumping, head moving, feet tapping.  Watching people watching this video is almost like watching Will Ferrell and Chris Kattan in A Night at the Roxbury.

So before launching the next "big" social media initiative ask yourself how it will make people feel.  If it makes them feel significantly happy, sad, proud, etc., then it has a chance at spreading.  If it doesn't then don't expect much from it because no one will care.

Hello, Mr. Watson, Can You Hear Me?

On November 12, 2011, the Customer Contact Association released an advisory (Social Media Revolution Rewrites Customer Service Rules) that made the following observations:

• Companies must review which channels they use to monitor customer feedback as there is a mismatch between customers’ preferred channels and the ones companies monitor most frequently.More than 70% of the online population now regularly uses Facebook and Twitter.
• Forty-six percent of consumers believe that social media can hold brands and companies accountable.
• Businesses must reinvent their customer service models to respond to a growing breed of ‘connected customers’ who use social media to comment on service.
• Businesses need new multi-channel strategies to tackle ‘disconnect’ with customers.
• Forty-four percent of consumers believe companies do not care what they think.

While the data is helpful, I don't think anyone is surprised by the outcome - especially in the post-Occupy Wall Street world.  What is most useful is the conclusion that companies (banks included) are not listening in the right places.  Traditionally banks have used paper surveys, face-to-face interaction and other old school methods to obtain customer feedback.  Today, while these methods still apply, there is more and more feedback being provided through social media channels (Facebook, Twitter, blogs, etc.).  As such, it is important that banks "listen" to all applicable channels - not just those they are traditionally programmed to monitor.  At a minimum, banks should make use of Google Alerts and SocialMention.com to listen to the feedback/comments being placed out on the Internet.  Of course, larger organizations may opt for more robust (and expensive) solutions such as Radian6 and others.

Social Media Crisis Training - Mandatory For All Bank Employees?

On October 7, 2011, the Occupy Santa Cruz movement made life much more difficult for banks - large and small.  On the third day of an Occupy event in the small coastal town, an event took place that has likely turned upside down the life of a Bank of America branch manager.  This same event should have the Bank of America training department scrambling to address an important issue: how to handle confrontations with customers and protesters to avoid public relations disasters.

The October 7th incident involved several woman seeking to close a Bank of America account.  The women entered the branch with protest signs and a video camera.  The branch manager upon noticing the women immediately acted by politely asking the women to leave the branch.  The entire exchange was captured on camera and subsequently released on YouTube.  The video has been broadly distributed, resulting in hundreds of thousands of views, causing continued damage to the Bank of America brand as well as likely affected the branch manager.

A few thoughts came to mind as I watched the video.  First was whether Bank of America senior management had provided its branches with guidance regarding how to handle protesters.  In this case, while the protesters were carrying signs and a camera, they appeared quite passive.  This was clearly a set up and the branch manager played directly into their hands when she indicated that they could not be both a customer and a protester and kicked them out.  As a former branch employee, I appreciate the feelings that overcome someone when things go sideways in the branch.  And as such, it is hard for me to be too critical of the employee for reacting as she did.  However, perhaps banks should roll out training that requires employees to first evaluate the scene - especially if cameras have been used.  And while hindsight is 20/20, in this case, having an employee calmly close the account would have been the best option for diffusing the incident.  Perhaps some vignettes would help get the point across.  Because, while the Occupy movement may or may not die out soon, similar approaches are likely to continue in the age of YouTube.

Another thought is having banks establish a clear policy regarding the use of video cameras within the branches.  Many gyms post policies regarding the use of cameras in their facilities.  Banks should determine their own.  And while they need not post the policies, managers should know the policy and be able to calmly describe and provide a copy of the policy to individuals in a manner that will not make for a good smear video.

Times have changed.  Bankers hope only temporarily.  But they have changed.  Every bank employee must recognize that he/she is an ambassador of the organization.  Everything they do may be used positively or negatively in social media.  The more aware employees are of their role as brand ambassadors the better off everyone will be.

Social Media and the American Autumn: The Social Media Effect

On Friday, October 28, 2011, Bank of America officially raised the white flag when it announced that it would exempt certain customers from its previously announced five dollar debit card fee. After severe criticism in the traditional media and especially social media, Bank of America announced that customers with direct deposit or Bank of America credit cards would not be assessed the five dollar fee. It is quite a win for consumers and a major setback for Bank of America's retail strategy team.

Just a month ago all the major banks were talking about recouping revenue through some form of fee on rank-and-file customers. However, in the wake of the severe backlash not only has Bank of America changed its tune but so have Wells Fargo Bank and JP Morgan Chase.

This American Autumn that was initially sparked with the birth of Occupy Wall Street, has taken to social media and has broadened its breadth and scope, resulting in an initial win with the withdrawal of Bank of America's debit card fee strategy.

Such an attempt 10 years ago would not have resulted in such an outcome. However, with social media's immediate and widespread impact, banks must now consider The Social Media Effect when devising corporate strategies. This is something that Bank of America failed to do. And it was evident on their own Facebook page, where complaints went unanswered by Bank of America.

As a long time banker I have always included "reputation risk" as one of the risks evaluated from time-to-time. However, as most bankers will tell you, this was always one of the lesser risks. As bankers we focused most of our energies on credit risk, interest rate risk, market risk and compliance risk. Now we must elevate reputation risk to the top tier thanks to social media.

The smaller the bank the less likely the bank is to register on the radar. Regardless, a community bank's reputation can be easily and quickly tarnished if "conversations" are not monitored and if banks fail to consider the Social Media Effect within the context of reputation risk.

So my advice to bankers in light of Bank of America's recent debacle is:

1) Utilize a form of social media monitoring. Whether it is something as simple as Google Alerts or SocialMention. And ensure that individuals within the organization are tasked with responding to comments in order to attempt to prevent a snowball effect that may create significant harm.

2) When developing strategies, do not fail to consider The Social Media Effect. A poorly thought out strategy can lead to severely adverse outcomes resulting in a loss of reputation and customers.

3) Include The Social Media Effect within the organizations crisis response plan.

While I do not believe that the "mob effect" will dominate all of the conversations within the banking industry, or any industry, for that matter.  I do believe that we have reached the point where The Social Media Effect must be taken seriously.

Regulatory Concerns and Loss of Control Slow Banks' Adoption Of Social Media

An October 23, 2011 Holmes Report blog posting identified the two major fears that banks have relative to social media implementation: regulatory implications and loss of control.

According to The Holmes Report, 73 percent of banks believe that they are behind but catching up in their social media activity. But the sector realizes that social media will not disappear: 16 percent have a social media strategy in place, 28 percent are in the early stages of implementation, and 41 percent are in the process of creating a social media strategy. This compares with 3 percent who have decided against a social media strategy and 13 percent who haven’t started thinking about it.

The Holmes Report cites brand awareness as the most popular reason for social media usage. According tot the report, banks find Twitter as the most useful social media platform followed by LinkedIn.

Addressing the regulatory implications is simple (easy for me to say).  Any social media implementation should be preceded by a careful analysis.  I recommend David Kreiman's recent presentation (Social Media at Community Banks) at the ABA National Convention as a starting point.

Next, I would recommend a review of Creating an Ironclad Social Media Policy.  This document provides the policy guidance necessary to satisfy examiners, auditors and executive management.

Finally, I would highly recommend that a copy of the Human Resources Guide to Social Media Risks be given to each member of senior and executive management.  This book will provide a very good assessment of the risks that exist as a result of social media use.

These three guides should provide the tools necessary to put any organization's fears into perspective.  At the end of the process the conclusion should be, whether or not social media is for our organization, it is not going anywhere anytime soon and at a minimum, the organization better be listening to what other are saying in order to adequately manage reputation risk.