Citigroup Revs Up Use of B2B Social Media
When it comes to using social media, the business-to-business world is playing catch up to the consumer-to-business sector.
Among banks, Citigroup Inc. is taking a lead here. The bank discussed its business-to-business social media strategy during a talk hosted by IBM in New York on Wednesday.
Starting in 2009, Citigroup began reengineering its client interface in its Global Transaction Services unit, which caters primarily to institutional investors. The changes it made included setting up an internal collaboration network for its employees, to cull from them the best ideas of how to interact with and market to clients. Using a platform from International Business Machines Corp. called Innovation Jam, it looped in 4,000 of the unit's 20,000 employees who posted almost 7,000 ideas in late 2010.
The GTS unit also launched social media initiatives in two close-looped sites specifically for clients. It created something called Marketguide, which brings videos and other content developed by Citi's experts around the globe to its capital markets clients. It added similar content and videos to its CitiDirect BE trade finance and cash management platform.
"In business to business we are finding that our client base, at least, is definitely adopting the use of social media, but they are not among the early adopters," says Leslie Klein, managing director and global head of marketing for Citi Global Transaction Services.
Business-to-business adoption of social media lags that of consumer adoption. While about 80% of consumers are engaged in social media, slightly more than half of business-to-business units use social media, John Di Stefano, director of research for B2B magazine said during the talk.
Recent market research indicates that only 17% of financial services c-suite executives are planning social media IT investment, compared to 51% of retail and consumer executives, Klein said at the talk.
"We are coming a little late to this party," Klein said.
But business-to-business social media has unique challenges that consumer social media does not have. Chief among them is the platform businesses will use. While consumer-facing businesses can easily leverage Facebook, Twitter and LinkedIn, the choices are different for business facing solutions because the environments are less open.
"There could be trouble with business-to-business communication using social business tools because of baseline incompatibility," Alexander Bakker, a research analyst for Saugatuck Technology of Westport, Conn., says.
Providers are disparate, including Cisco Systems Inc., IBM, Microsoft Corp., Salesforce.com Inc., and Yammer Inc.
Closed loop social media programs such as the ones that Citi offers its institutional clients through Marketguide and CitiDirect BE are critical, Christine Barry, research director at Aite Group, says.
"Banks are increasingly trying to position themselves as advisors and have been making strides in their efforts to focus on educating customers," Barry says.
What is missing currently from Citi's strategy is a plan to let the bank's own clients interact with each other.
"[That would] provide the bank with great insights into what is on the minds of its customers, not to mention the value [clients] will get simply by learning from and hearing the different perspectives of their peers around the globe," Barry says.
Klein said there are regulatory and security challenges involved in opening up the bank's platform, but it has plans to provide that service to its clients in the coming months.
Klein said Citi has been able to mine the expertise of its advisors and other client-facing representatives to create content. It has equipped its bankers with desktop video cameras so they can make spot assessments of particular market developments. These in turn are broadcast on both the CitiDirect BE and MarketGuide sites. Klein said this technique was put to particularly good use this spring during the uprising and revolution in Egypt, which sparked concerns among the banks' clients.
"Our GTS country heads posted a video, and within four hours it was on Marketguide, about what was going on in [Egypt] and how our clients could conduct business," Klein said.
To develop its business to business strategy, Citi took some best practices hints from its retail unit, though the client base is entirely different, Klein said. For example, in trying to figure out how to get its institutional clients to follow Citi on Twitter, the retail unit suggested the GTS unit first follow the clients it in turn wanted to be followed by. That strategy garnered the unit about 1,000 followers on Twitter. (Before, the unit's followers numbered in the low hundreds.)
More often than not, businesses do not turn to banks for critical information, says Steven Murphy, research director for wholesale banking at TowerGroup. Instead, they turn to other peers or related service providers like accountants, he says.
"This is an area for banks to capitalize on; if they can provide these information streams online, it is a way to keep [businesses and institutional clients] hooked," Murphy says.
Like just about every other business engaged in social media, Klein said Citi can't yet demonstrate a return on investment.
"Client engagement is, ultimately, our ROI," Klein said.