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Should Financial Institutions and Other Businesses Be Active in Social Media?

Should financial institutions and other businesses be active in social media?
Photo credit:U.S. Army/ Foter.com / Public Domain Mark 1.0

The promise of social media for business is immense: increased brand awareness and affinity, exponential growth through tacit endorsement ("sharing," "liking" and other forms of "social proof"), and a rich source of customer data.  It's no wonder so many companies are jumping into the Social Web.

Some consumer brands have a fun-loving image that easily lends itself to marketing the brand through social media.  Other businesses, like banks, have a much more staid brand, which means the free-for-all that is social media can be hazardous to the brand if mis-managed. 

The American Banker has compiled its list of the "Seven Biggest Social Media Blunders by Banks," and I must admit, they are perversly entertaining.

The most recent example of a social media disaster was JP Morgan Chase's Twitter Q&A with Vice Chairman Jimmy Lee this week, which used the hashtag #AskJPM.  The idea came following JP Morgan's role in the Twitter IPO, and was designed to capitalized on the relationship with Twitter.  Disgruntled customers, pranksters and political activists soon inundated the Twitterverse with unwelcome questions, comments and criticisms.  JPM cancelled the session abruptly, tweeting, "Bad idea. Back to the drawing board."

In July, Bank of America goofed after an Occupy Wall Street activist Tweeted a picture of himself being chased by police. BofA's Twitter account responded with the following Tweet: "we're here to help."  That led some commenters to remark that it appeared that the bank's Twitter account was being managed by a "robot." 

Barclays was criticized for creating a fictional character, "Dan," on its Facebook page, and then "talking down" to him.  Critics claimed Barclays appeared to take a condescending attitude towards its customers. 

In each of these cases, the root of the problem was a failure to understand the forum and the prevailing sentiments and culture.  There is no mathematical formula for success in social media.  It is more art than science.  Social media is best managed by an individual who is fully engaged in the space, not by a "n00b" (Internet slang for a newbie) or a slow-moving committee.  Identifying an employee to manage social media account who has the sound judgement to responsibly manage the brand as well as the social media savvy to read the mood of the medium can be difficult, but is worth the effort. 

...and this is to say nothing of the legal and compliance risks implicated by social media (but that's another post)!

The lesson is clear: Banks and other businesses need a savvy guide to navigate the minefield of social media.  My advice is to do it right, or don't do it at all.
sho fia

sho fia

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