GALVESTON, Texas-Credit unions would be well-advised to take a course in "Socialnomics," according to one person.
Socialnomics is the intersection of social media and word of mouth, creating "world of mouth" advertising, according to Erik Qualman, an expert on social media and author of a book with that name.
"Socialnomics is word of mouth on digital steroids," he said, noting many consumers are moving past what had been considered a big deal just a few years ago-doing research online at home before going out to shop. "People are now using their smart phones to scan QR codes in stores, which not only lets them comparison shop, it lets them get recommendations on the product from their Facebook friends."
Similarly, popular travel website TripAdvisor links with Facebook. With a few keystrokes, users can get ratings of hotels in, say, New York City, from all of their friends who have visited the Big Apple.
"Eventually, every product and service will be rated," Qualman predicted. "Even people will be rated. Companies are already using Klout to find influential people to get them to talk about their products."
For those who think Twitter is a bother, filled with inane chatter by people sharing their every trip to the grocery store or the beach, Qualman has their back-sort of.
"When I heard about Twitter, my first thought was, 'This is so dumb,'" he said with a laugh. "But I came to realize it is a business tool. Companies can listen in on conversations. People wonder if it is a marketing tool or for customer service. The answer is: it is for everyone from the CEO down, because it touches all areas."
No 'Magic Pill'
There is no "magic pill" for using social media, Qualman said. However, credit unions can use the stream of information available to help separate themselves from banks. He said this process starts with a CU doing a lot of listening-especially, what are people saying about the credit union, its people, and/or its products and services?
His best advice: listen, then interact, react and sell.
"Credit unions need to react when people say they 'love' or 'hate' something the credit union does, and they can use this feedback to adjust."
The notion of word of mouth on digital steroids cuts two ways, Qualman pointed out. If a company does something well, it can be to its great benefit. But if it makes a consumer angry, the fallout can be far-reaching.
One of the more spectacular examples is Dave Carroll, whose band was taking a flight on United when they saw their instrument cases being thrown by luggage handlers. After finding damage to his expensive Taylor guitar, Carroll tried in vain to get the airline to address the problem.
Finally, Carroll and the band, Sons of Maxwell, created a music video titled "United Breaks Guitars" and posted it on YouTube. To date, the video has garnered an astonishing 11.8 million views. More importantly, Qualman said, after weeks of inaction in response to phone calls, the very public airing of Carroll's dissatisfaction drew an immediate response from United, which agreed to pay for the damage.
As a side note, other companies jumped into the fray to capitalize on the exposure from the incident. Taylor Guitars sent Carroll two new axes at no charge, and a guitar case manufacturer sent him its product, also free.
The lesson? "Mistakes will be made and negative stuff will happen whether or not a credit union is on social media, so it is important to monitor and be ready to interact and react, if needed," Qualman said.
Moving forward, CUs need to figure out what only they can offer to members and then promote that on social media, he said. Perhaps they can take the example of Starbucks, which combated customers abandoning long lines at its stores by creating an app to send an advance order when the person is 10 minutes away.
It's Still About People Helping People
The challenge for any credit union, however, is effectively sifting through all the data available. He recommends starting with personal connections.
"Pinterest has become the third most popular social media site-it can drive traffic to credit unions' websites," he said. "Social media is about people helping people, not technology. Social media was a big driver of Bank Transfer Day."
Sites that can help CUs make sense of it all include: search.twitter.com, a free tool to track what people are tweeting; technorati.com, a free blog search tool; and bazaarvoice, a paid tool that supplies ratings and reviews.
