Here are 5 reasons why social media marketing tends to be grossly underestimated by the banking industry.

Have you ever heard the adage that your external world, friends, family and acquaintances are all partial reflections of who you are as a person?

Well, the same is true in branding. Each of the individual people that surround your bank – from your employees and shareholders to your customers and partners – collectively determine the image of the business that you run.

Think about the vast web of people that comprises your bank’s social network.

  • What parts do these individuals play in the public-facing identity of your bank?
  • How can you leverage this expansive network of people to achieve greater success?

I’m truly flabbergasted by the extent to which social media is underutilized in the banking industry today. There are so many powerful strategies that are low-hanging fruit – sitting there, just waiting to be plucked. And yet, very few banks even dare to reach.

But it goes back to another old adage: People are only able to act upon the opportunities that they can consciously perceive and understand. The reason why social media is underutilized in banking today is actually quite simple: Lack of awareness about the colossal difference that this factor can make in expanding your finance-based business.

A Few Simple, Illustrative Scenarios

Imagine you are walking in a dry desolate area of Mars. During your stroll, you walk by a genuine Truffle – not the chocolate, but the highly prized food – typically valued on Earth at about $1,200 per pound. You also walk by a shiny gold-foil pen, generally priced at about $5.00. Which one are you more likely to pick up? The irony of this scenario: The truffle can easily blend into the background and go unseen, whereas the gold-foil pen clearly stands out.

Here is another scenario: You’re in the Sahara desert. You walk by and recognize a truffle (again, typically priced at about $1,200 per pound) and a cold gallon of water (usually sold at about $1.59 per gallon). Which one has more value at that moment?

Humans make decisions based on perceived priorities – and opportunities that they can clearly recognize, to boot.   Marketers are so darn busy these days – especially finance-based marketers, since they are often responsive for all promotional responsibilities as a single-person team.

Learning and dominating social media in 2016 is both the truffle and the cold gallon of water; it represents both an immediate need and carries tremendous value, when executed properly. Banks simply need a paradigm shift in order to realize how social media can help them accomplish their goals for the next year and beyond. Once this happens, it opens all sorts of powerful opportunities for growth, and helps make their jobs fun again at the exact-same time.

Here is an idea to illustrate my point: #banklocal is not anything new. Yet, I haven’t seen any banks truly dominate this simple tactic! If I were to create a blog as a bank marketer, this is exactly what I would do.

Initial Social Media Approach for a Commercial Bank

I would identify businesses in my local area that are beloved by the communities they serve, and I would create a blog on my bank website called #belocal, #banklocal. In tandem with this effort, I would also create a content strategy designed to showcase the people behind those businesses.

Now pay close attention, because this is the important part: I don’t mean just writing about them from the POV of clear commercial interest, but reaching out to them from a human perspective and getting them involved in my bank’s social network. Surround your business with the type of people that represent the values you hold. Repeat this practice over and over again, recognizing that the process is just as important as the final product. Through steady application, a few things will start to happen:

  1. Growth of Awareness. People who’ve never heard of my bank will start to get an intimate understanding of my brand, which turns it into a trusted resource in their mind. I would never try to sell in this scenario. Ever. Those opportunities will happen in due time.
  2. Ease of Introduction. Products are much easier to sell to clients who have a deeper understanding of my bank brand. Show your network exactly who you are on the inside, deep down. This type of transparency is the core of what wins trust at the end of the day.
  3. Compounding of Results. Opportunities will then start coming in more often, since other local businesses will want to become involved in order to gain some exposure on the stage that you’ve built. This in turn means that leads will become a lot more qualified as well, since there is a bigger pool from which to choose.
  4. Buzz starts happening. As Jay Baer says: Content is the fire, social media is the gasoline.
  5. Partner Notice. Partners start to pay more attention, because other local businesses have taken notice. Then they start asking how they can become more involved.
  6. Ever-Greater Heights. An upward spiral starts to create opportunities you would’ve never thought possible. The positive energy that you’ve been sending out into the world starts coming back to you multifold – in ways you never would’ve expected.

And so on.

But wait, you might be thinking: I’m not a commercial bank. Never fear: The same basic principles still apply.

Fundamental Approach to Social Media for a Retail Bank

If I were a retail-based bank, I would create a blog focused on #localheroes and #banklocal. Here’s how I would approach it: I would identify local people who do extraordinary things.

  • This could mean families who support charities, with posts interviewing these families and charities.
  • This person could also be a garbage collector, telling his/her story.
    • One possible angle: At 4:00 a.m., when everyone is sleeping, George the garbage collector strategically eliminates disease and health issues before they happen.
      • You can easily talk about the history of garbage removal and how the lack of it caused disease and death for centuries, showcasing George as a hero. If there is a local historian, gather and add his/her comments.
      • During a natural disaster like Hurricane Sandy, you could interview people whose garbage wasn’t collected, and demonstrate how their house was ruined because of it.
  • I could go on and on almost indefinitely, as you can too.

So how does this relate to new business? Simple. More and more people will begin to notice that your bank recognizes and showcases local heroes. They’ll then want to become more involved in assisting you, and suddenly highly qualified leads start to develop.

5 Reasons Why Banks Tend to Underestimate the Power of Social Media Marketing

The reason why most brands struggle with social media is because the content created and distributed is usually written from the POV of the business, bragging about itself. Truthfully, no one cares.

Do you think anyone really cares about the grand opening for your branch? Unless it bears a direct impact on them in some way, no one has the time or the bandwidth of attention for it in the current media-saturated world that we live in. People care about themselves and their own experience.

Thus, this should serve as your central mission in social media marketing: Provide relevant, genuinely helpful information. This simple, very low-hanging fruit could make a bank millions in new revenue over the next year, if executed correctly.

Why not try? Here are five reasons why the typical bank fails to attempt social media marketing.

  1. Lack of confidence. When the board asks how such a strategy brings in revenue, most marketers crumble under the pressure – unable to back their conviction with the necessary amount of supporting evidence. Simply because the board of many banks are comprised of very smart business leaders – many of which are slightly past retirement age – they just don’t understand the value of social media marketing. This dynamic is certainly nothing new; everyone understands the challenge of presenting a powerful new medium to a senior board that has lived through days when such a platform did not exist. However, I can guarantee you that a marketer that has deep-rooted confidence in what’s possible through social media will not lose in this scenario. But in order to be appropriately confident, you’ll need your own direct experience or that of other industry experts to make your case. It’s the marketer’s job to get the bank’s promotional efforts moving in the right direction, regardless of the institution’s reluctance to innovate.
  2. A gross misunderstanding of the compliance officer’s role. A bank marketer should view social media as a game of basketball. You have to know the rules inside and out, but you also have to play to win. Compliance should create non-stifling guidelines, and act more as a referee.   You should mentally ask yourself: “If someone threw me the ball, am I allowed to shoot?” If not, this basic problem must be addressed immediately.
  3. A gross misunderstanding of social media integration. Social media is not just Facebook or Twitter. It’s powerful user-created experiences, in which a brand serves as a conduit to create and empower others. Everything else should integrate into this basic definition of social media: Customer service, traditional and non-traditional marketing, advertising … everything. Social media is not just another channel; it’s the brand as a whole. A social media brand is about shining a spotlight on your audience and customers, not your marketing department.
  4. A lack of patience in expecting results. One post will not get you any results, whereas 1,000 will. The process of building social media success requires time, energy, and steady dedication – but once the results start to pop, you’ll be very glad that you invested the effort in it.
  5. Undertrained staff. Social media – like everything else – is initially difficult, but once it gets going, it becomes much easier. But there needs to be a high-level of commitment and investment to make it work. (This is why I created #banksocial.)

Final Thoughts

Look, if your product stinks, no amount of social media will change a consumer’s perspective. You can put lipstick on a pig, but it’s still a pig at the end of the day. The same is true of a mismanaged bank that tries to hides its glaring operational flaws in glossy sales efforts. This strategy won’t last long, once customers get a glimpse behind the curtain.

However, social media marketing is an incredibly powerful tool for banks committed to providing value to customers – inside and out. What type of statement does your bank’s social network make about your business? And how can you use the power of social media to grow much bigger and better? Take full advantage of the company that you keep in your social network as a bank.

What are your thoughts on social media marketing within the finance industry? Are you on board the social media phenomenon? Why or why not?