Recently my firm, Market Insights, completed an assessment of the social media activities of one of our community bank clients. They are a well run, growing institution with a talented marketing team. Yet our assessment of their social media was pretty brutal, as it revealed a problem we see playing out in community banks and credit unions across the country. We discovered that their activities were not governed by a strategy, per se, and that their content was largely disconnected from their overall brand position and their actual social media audience. Consequently, the bank’s efforts amounted to a one-way conversation (bank to customer) attempting to push product and content that was not in alignment with the customer; resulting in little to no engagement.
Many are in this identical situation. Financial institutions were slow to embrace social media. And when they did, they often failed to integrate social media into their websites, were not very active on the few channels they opened, and demonstrated low interaction with users. As a result, it has been difficult for many to see the value in social media. We actually predicted that 2015 would be a year where some community banks and credit unions abandon their social media presence, out of frustration and lack of visible return.
But social media should be an essential part of your marketing efforts. Today, Americans spend more time on social media than any other major Internet activity, even email. So if you want to be create a successful social media strategy, you have to start with the basics: 1) set a goal and 2) know your market.
Set A Goal
In order to build any successful, measurable social media strategy you have to have a goal in mind. It should be more than “have a social media presence” – get specific. Are you trying to build or strengthen your brand? Are you trying to drive sales or increase leads? Perhaps you’re trying to improve operations (like customer service) by listening to customers through social media. Shifting between multiple goals is common, but at any given time your social media strategy should be driven by the one primary goal that you use to guide and measure your efforts.
Know Your Market
Knowing your market goes hand-in-hand with clearly defined goals. Understanding your existing customer, your target customer and the social media activity of your competitors yields the insights required to determine the type of content you need to create and the channels through which it should be delivered. It’s that simple.
According to one of the leading trend firms, we are now living in the age of Post Demographic Consumerism – a time when our consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income or family status. All of us buy and use products and services from the same mega-brands. We are living in an age when 1.35 billion people are on Facebook, where grandparents are the fastest growing demographic on Twitter, and when two people join LinkedIn every second of every day.
This would seem to suggest that the days of using demographic-centered models for marketing is over. Just the opposite. It pushes us to gather even more information and focus on ever-smaller segments rather than broad traditional groupings. And unless you are a national or global institution, geographically linked data is still foundational to any successful strategy. Knowing your market today means understanding the multiple and sometimes-complex layers of what make people tick, how they think, where they live, what they feel and why they buy. Here’s how we break it down for both the current and potential customers in any particular market area:
Begin with basic demographics. I have often said to clients that the path to profit lies in understanding the quantifiable characteristics embedded in their customer data. You have a wealth (pun intended) of customer information about who they are, where they live and what products they own. Analyze that data periodically, as the mix is continually shifting.
Demographic analysis also gives you valuable information on the current and projected (e.g. 2015 to 2020) profile of your market. Beyond simple characteristics like age and gender, demographics can help you understand both market density factors (households and businesses) and market quality factors (income, education, net worth, income producing assets, financial product usage, etc.). Having a clear understanding of whether your markets will grow or contract and whether there is sufficient density of your desired customer segment (i.e.: small businesses, young families, young professionals, etc.) is a logical place to start.
Psychographics is a deeper layer of insight that builds on demographics and segments a market area’s households into smaller subsets based on similar financial behaviors. A classic segmentation system, like P$YCLE® by Nielsen, evaluates consumers using factors that have the greatest effect on their financial behaviors, such as income, age, presence of children, home ownership and Income Producing Assets (IPA). Applying this type of system to both your customer data and market level data can help you identify areas of overlap and potential opportunities for future targeting.
For example, let’s assume that a dominant P$YCLE® segment within your customer base is made up well-invested retirees. A psychographic profile would tell you they own CDs, money market funds, municipal bonds, and fixed- and variable-rate annuities. It would also reveal that these cautious investors take full advantage of senior discounts and are coupon users at drugstores, grocery stores, etc.
But what if your dominant P$YCLE® segment within your market area is made up of busy families with modest incomes, raising children trying to have enough left over to save for retirement or take a vacation. They may resonate with generated content about saving for college, retirement, debt reduction, etc.
If your goal is to retain the former segment, your social media strategy and associated content would look very different than if the goal were to acquire the latter segment.
Historically, demographics and psychographics have been sufficient tools for segmentation and successful marketing efforts. However, we now live in a complex, digital world where the average American owns four digital devices and spends 60 hours a week consuming digital content. The resulting flood of social media data – sourced from online activity and updated in real time – should be giving financial institutions an even deeper understanding of their markets and their customers.
Larger banks like Bank of America, Chase and Wells Fargo have been tapping into social data for several years. Peer-to-peer lender, Lending Tree, has been incorporating multiple sources of social data into its operations since 2009. But even if you don’t have the analytics technology to collect, store and deploy social media information, there is basic data that can inform creation of your strategy.
In January 2015, Pew Research published its Social Media Update 2014. While social media data and insights are dynamic and constantly changing, the highlights of this study point to key trends that continue to emerge. Consider these statistics:
2014 percentage of online adults using social media:
- Facebook 71%
- LinkedIn 28%
- Pinterest 28%
- Instagram 26%
- Twitter 23%
More than half (56%) of online adults age 65+ use Facebook, (31% of all seniors.)
Internet users with college educations using Linkedin reached 50% in 2014.
53% of young adults (age 18-29) use Instagram.
42% of online women use Pinterest.
Research also tells us that a growing number are regularly using more than one social media channel. The frequency with which people use these channels is also shifting. Nevertheless, this type of information gives you a general profile of which social media channels align with the target audiences you chose. It also gives you a way to compare your current customer penetration in social media space to that of the overall market. Have you looked at who is following you on Facebook and Twitter, or determined who liked your last content? Have you used Google analytics to evaluate your last “pay to promote” effort? And as suggested earlier, knowledge of social channel use is helpful when you scan the social media activity of your competitors and gain insight into their likely target(s).
Armed with a clear goal and market data you can create a winning strategy, chose the right channels, establish a content plan and decide how you will measure progress (i.e. ongoing analytics or campaign-focused metrics). You have to know your market. The important thing to remember is that social media is a dynamic realm. While a commitment to social media should be long term, your strategies should never be static.
They should evolve over time. As you deploy each strategy, collect new information, gain new insights and adjust.