By Nicole Sturgill, Research Director, CEB TowerGroup
Financial services executives are finally coming around on the benefits of social media. In CEB TowerGroup’s 2013 Technology Adoption and Investment Survey, one-third of executives considered social networking technology a low-value investment. But in 2014, that number had dropped to 4 percent, and 60 percent of executives indicated that they were increasing their investment in the space.
However, skeptical executives continue to be dissuaded by two primary concerns:
1. Engagement with social media may harm the brand by creating an uncontrollable and highly visible forum for complaints.
2. Customers are uninterested in engaging with financial institutions through social media.
Recent research by CEB tests the validity of these concerns, helping to demystify social media’s role in contemporary customer service and engagement. This research provides surprising insight about the ways in which customers actually use social media to engage with financial institutions.
Does engagement with social media increase the risk of spreading a negative impression of your customer service? It’s unlikely.
Nearly one-third of customers who engage with a bank through social media reported that they like when others share positive experiences, and nearly one-quarter reported that they use social media to recommend their bank to others. In contrast, only 13 percent reported that they use social media to express frustrations with their bank.
Will engagement with social media actually affect the customer experience? Yes.
Eighty percent of bank customers use social media, and more than three-quarters of those customers have used social media to research products or services. The most intriguing revelation is that nearly 40 percent of customers who researched products through social media told someone else about what they learned. This clearly demonstrates social media’s value as a powerful, inexpensive marketing tool.
I’m looking forward to talking more about this at the conference and looking at specific examples of how financial institutions are using social media to engage with customers. But what do you think? Is social media the key to better customer engagement, or is it an accident waiting to happen? Do you have a “lesson learned” from social media? How have you used social media to strengthen customer relationships?