Gone are the days when embedding a Facebook or Twitter logo on a bank's website signified social media innovation. In 2012, financial marketers have learned that gaining social media fans, likes or even comments doesn't equate to clear-cut success or ROI. A bank's employees may be engaging with customers on a Facebook page, but while correlated, banks need ways to track money coming in against resources expended on social media initiatives. If you haven't realized this yet, now is the time to up your game.
In a May column, "The Return on Social," I laid out ways that marketing, PR, customer service, sales, research, and HR departments should be extracting tangible value from social media. Below are methodologies and metrics for determining the ROI of these specific social media use cases.
The metrics roll up to three major categories of benefits: revenue impact, operational efficiencies, and legal and compliance risk avoidance. These three categories are based on a study that the researcher Mainstay Salire conducted on the ROI of the Hearsay Social enterprise social media platform. Findings revealed deeper customer engagement in addition to increased sales of financial products, improved sales conversion rates, avoidance of lawsuits and regulatory fines, and decreased social media management costs.
Social media sites generate leads. Many banks already have lead attribution programs in place. When a customer fills out a paper or online form to sign up for a new checking account, add a box that attributes social media as the way the customer found out about the bank. Better yet, have the checkbox say, "Referral from social media connection" or "Viewed a bank representative's LinkedIn profile" to directly attribute new revenue opportunities to social efforts.
Social media promotions distributed through tools such as Facebook apps and sponsored stories should already have ROI data baked into them. If a customer or prospect registers for a sweepstakes on a social media site, such as Chase's Freedom Card Facebook page, banks can apply traditional online marketing measures similar to SEO and SEM that determine cost per lead. Moreover, by integrating the bank's social media page with account or loan application forms on its website, your marketing team can track the source of that traffic back to a corporate Twitter feed or a sales rep's LinkedIn profile and attribute that new business to the social program.
Social media can also provide quantifiable value in mitigating and managing bad press. One way to quantify the value of a social crisis management plan is to calculate the cost savings on consultant fees and traditional media blitzes that the bank would incur if its reputation were tarnished and it didn't have a social outlet. By building up relationships and rapport on social media now, you'll have reserves of goodwill upon which to draw if and when a PR disaster happens.
Other PR-related ROI may be determined through customer surveys. Public opinion can be tough to measure but survey questions can analyze whether customers feel more connected to the bank as a result of social media. In addition, these questions can determine whether we would refer a friend who asks for a bank recommendation via social networks, or want to be affiliated with a bank that they perceive to be a social technology innovator.
Quick and authentic customer service on Twitter or Facebook can provide ROI in the form of operational efficiency. A bank may be able to troubleshoot the same amount of incoming complaints with five customer care representatives on Twitter as it could with 15 phone reps. This is because customers can scroll back through other customers' questions and answers on the bank's page without writing a thing or interacting with a bank rep. Leverage your human resources from one to one with phone support, to one to many with social network support. The decreased amount of employees means less money you'll need to spend, equating to tangible ROI.
For banks with distributed lines of business, corporate marketing teams should enable their salespeople to have a LinkedIn page, professional Twitter feed and Facebook business page. These pages serve as landing pages for new business. Bank branch managers, wealth managers and mortgage brokers should use the bank's existing CRM system to attribute lifts in revenue, referrals, increased assets under management and cross-selling of financial products to their social pages. Just as they put basic operational systems in place for reps to tie traditional referral programs to sales, banks should have the same basic systems in place for social media referrals.
Studies show that the new era of financial professionals has grown up with social media and are more likely to apply, interview, accept offers from and stay with those companies that embrace social. This reduced employee churn is another indicator of ROI.
During hiring and exit interviews, banks can ask employees whether a culture of social media influenced their decision to stay or go. Better, the dollars saved by using social media for recruitment efforts rather than more traditional channels such as jobs fairs, on-campus recruiting and outsourcing to headhunters result in higher ROI.
These metrics will give your bank the quantitative data it seeks to measure social return on investment.
Ally Basak Russell is head of compliance at Hearsay Social, a provider of social sales, marketing and compliance software for financial services companies. Russell is a paid employee of Hearsay Social. Nothing in this article should be interpreted as legal advice.