www.customercentria.com

Author Rahul Singh

Date Mar. 31st 2011

customer centriaThe Customer Engagement & Experience Company

Customer Experience Banking on Social Media

A Strategic approach towards Indian Banks'

presence on Social Media

Designation Marketing Manager

India – an economy that has one of the highest youth population in the world and will add 241 million people

in the working-age population by 2030 (Source: UN).

India's current online population is an estimated 81 million connections and 54 million users and a majority

of Internet users are in the age group of 19-35 in the SEC A. B and C categories. This population is growing by a

third each year and is the key target group for marketers to engage in a meaningful and long-term

relationship especially in urban India where household penetration is estimated at nearly 45%.

Internet – A virtual platform with real-life people

The Indian Youth are discovering the potential of the online medium to stay connected with each other and

with the rest of the world in general. This, coupled with a booming economy, has empowered the younger

generation to express themselves, share information, explore and familiarize with the virtual space.

The days of people having concealed usernames like ‘Iamyoung22’ are gone. Today users flaunt their real

names, recent activities, relationship status and almost all other aspects of their daily lives over the Internet.

This is because internet is no longer an unknown and unexplored space but a very real and integral part of

their everyday lives. And the natural progression is thus the impetus that the social media websites across the

country have seen.

The following bar chart depicts the Social Media scenario in India

Source: Comscore

The point of confluence: Social media meets Banking

As social media continues to grow, and makes its presence felt more and more, the industry that

should be sitting up and taking note is Banking – a service that touches our lives ubiquitously.

The confluence is inevitable; how to exploit to create a competitive advantage is what should be on every

marketer's mind.

With the growing purchasing power parity of the Indian middle class and growth opportunities across

sectors, banking in India is on a flourishing note. The banking index has grown at a compounded annual rate

of over 51 per cent since April 2001 as against a 27 per cent growth rate in the market index for the same

period. Foreign banks are also trying to leverage on this growth run and increasing their footprint in the

Indian market.

The opportunity to leverage the social media consumers’ online behavior in the context of the banking

industry, has a high potential and an extremely potent upside.

Till today, Indian banks have been through their “aggressive acquisition” phase. However, the key to long

term profitability is retention and increasing profitability of existing customer base. Essentially in this

“forming” phase, social media plays a key role in customer engagement by enabling banks to obtain

exponential financial value, build strong bonds and cultivate long term profitable customers. This is the

line of sight that every marketer needs to have and this whitepaper helps you do exactly that.

How the Big Boys play the game : The global scenario

“As an industry, if you really think about it, banking is about being personal… The fact is their basic aspect

is a very personal relationship and social media is a way to enhance that and bring that back, so I think it's a

perfect fit.” - Frank Eliason, Senior Vice President of Social Media For Citibank

Leveraging the social network of its consumers and prospects has become a globally recognized practice of

banks. The major players include Wells Fargo, Citi Group, ING and BBVA among others.

Bank of America is one of the pioneers in this domain. They launched a dedicated Twitter feed to address

customer queries and grievances. Given their strong orientation towards Online Reputation Management,

they actively browse the 'Twitterverse' for any negative sentiments to address. It may be helpful to note that

in doing so they don't utilize their bankers' hours. In fact, BoA has a team of five people working full-time to

keep the online conversations going 24 x 7. If you take a look at its tweet history there are plenty of promising

signs.

Wells Fargo has taken things to the next level by creating a Virtual Engagement Platform for socially

connecting their prospects and engaging customers.

Bank of America on Twitter Wells Fargo's Stage Coach Island

Citi on Facebook

The Indian Scenario

If you can't beat them, join them. Social Media is here to stay.

Social media is a platform that defines the way we communicate in the era of Web 2.0

Social Media is currently just a listening tool.

Banks in India certainly have a presence on social media. The scope however, is limited and social media is

still considered only as an alternative media channel. Currently social media serves as a listening platform

only with minimal or no consumer engagement.

How banks are executing it…

Indian marketers are slowly waking up to this reality, but the adoption of social media as an integral

part of building customer relationships and providing superior customer experience is still lagging. The unstructured nature of the medium and the surprises that it is likely to throw creates uncertainties and

sometimes not-so-pleasant surprises, which the marketers are not yet ready to face.

•

•

One of the largest banks in India has quite an active presence on Twitter. But if a prospect/customer asks

for help or gives a suggestion, users are provided an automated response to contact the call center or walk

in to the nearest branch. Not a great experience for even the most benevolent customers.

On the other hand, one of its major competitors is using Twitter as a medium to make its customers, both

present and future, aware about its new and existing product benefits. Case in point: a revolutionary

platform that is being used in a “push” way just like traditional media has always being used. The essence

of the platform – the ability to listen and then “react” appropriately, in an innovative, even immersive

manner, is an opportunity lost in this case.

Decoding challenges, the way most marketers see it

1The Ostrich Syndrome : Owing to the very essence of social media being a two-way channel, most

Indian banks shy away from a robust social media engagement, because the negative feedback is

daunting. Fact is, even if marketers choose not to listen, the customers do not stop talking.

2Using the 'hard-sell' strategy is completely inappropriate, and is almost a breach of a consumers'

privacy. It is also counterproductive to the very strength of the medium. Traditional marketing

strategies in social media are bound to be a failure, which results in a chicken and egg situation.

3 Social media marketing might not require huge capital investment as compared to other

marketing channels. However, it requires commitment and active participation thus making it

'time-intensive', an aspect that most marketers are currently missing on!

Using S0cial Media as a tool for customer engagement and experiences

Banking as an industry, thrives on among its customers. The recent financial crisis was a major

testimony of that. The obvious fact arises that since there is an end-user's money involved in the business,

he/she is bound to ask questions and raise queries in an open forum like Social Media, courtesy the open-

ended nature of social media.

It is not advisable for a bank to remain inactive on the social media due to the fear of negative customer

feedback.

'trust'

“Social Media is a channel which exposes a marketer's dedication to customer experience. You either

do it or you don't. There are no mid-paths!” - Kim Saldanha, VP, Customer Centria

4 For most marketers social media is like groping in the dark. Integrating it effectively with other

elements of the marketing strategy, and using strong consumer behavior insights such as

understanding the pattern of their transactions, noting their various touch-points with the bank

hence becomes the key, which currently marketers are missing on!

Marketers get a ring side view : It allows a bank to get a first-hand

view about consumer’s thought process, likes & dislikes,

competitor conversations, market trends, etc. By using

advanced tools like ‘Buzz Metrics’ to monitor and moderate

buzz, and then using this to analyze one’s efforts and

channelizing resources retrospectively helps provide enhanced

customer engagement.

a

You heard it first! Continuous engagement, first out approach

via recent policy updates, new features, add-ons on service front,

supporting relevant social causes, providing help on query

resolution, etc. is the ideal strategy that flanks a plethora of

offerings without hard-selling. As a marketer you put it out

there; the consumer has the choice to embrace or ignore and is

hence not intrusive.

b

Create social media as a credible, alternate channel of

communication with the bank. Social Media Interaction implies

that Indian banks get a chance to engage with prospects beyond

branch timings and geographies.

c

Social media is guaranteed to provide effective customer

dialogue. However once committed, every marketer needs to be

tuned in to the dialogue and dedicated to building a long term

emotional relationship with the consumer. Implicit in the term

Social Media Interaction is the fact that marketers are

guaranteed a chance to engage with their prospects beyond

the limitations of branch timings and geographies; the onus

is thus on the marketers.

d

Truly exploiting Social Media also provides an opportunity to

create experiential profiles for each one of their customers,

enabling better targeting. This stems from a deep understanding

based on extremely personal details, like areas of interests

captured through various apps/games/events, etc. Hence,

consumer behavior can be better understood and used to provide

the best value proposition to the end-user.

e

Social media gives marketers the opportunity to convert

prospects into consumers and later into brand evangelists.

A key ingredient to long tail engagement is User Generated

Content.

f

Social media unplugged - Converting challenges into opportunities

According to a report by ROI

Research for Performance, June

2010 - of people on Twitter

recommend companies and/or

products in their Tweets, with

of them delivering on their

intention to buy the product.

53%

48%

An Average consumer mentions

in conversations with friends,

family, and co-workers. (Keller Fay,

WOMMA, 2010)

specific brands over 90 times per

week

Two or more channels are used by

78% of consumers to browse,

research and make purchases.

(ATG, March 2010)

The highest performing businesses

use consumer insights in of

sales and merchandising (GOOD

Magazine, March 2010)

80%

Consumer reviews are significantly

more trusted - nearly more

than descriptions that come from

manufacturers . (eMarketer ,

February 2010)

12 times

In a study conducted by social

networking site myYearbook,

of respondents said they'd receive

advice from friends and followers

relating to a product purchase.

(Click Z report)

81%

As marketers, we communicate a plethora of messages to the universe; however the traditional concepts of

B2B and B2C are passé. Marketers today must adapt to the role of a catalyst and hence encourage and

facilitate user generated content.

User content is your key when it comes to social media and facilitating this user content is your core

. You definitely run the of perhaps falling into an uncontrollable negative conversation, however

the are worth the risk:

asset

liability risk

pay-offs

This involves forming boundariless communities which are based on experiential profiles. Ambitious

entrepreneurs, creative thought leaders, the young and the restless - banks can create communities which

mirror emotional payoffs for each of their products / verticals or service offerings. This not only aids accurate

segmentation of prospects, but enables bonding beyond the product. Also, the key point to remember is the

consumers' need to react to consumers, not a corporate.

Community Building

Making Social Media work for you

With social media you are directly interacting with a customer or a prospect and answering their queries.

This reduces traffic at branches and call-centers. Lead generation and customer query resolution can be

achieved at much lower costs. This also ensures that a prospect/customer is provided the right knowledge

about product benefits, building a bond of trust.

Customer Service

Social media is one of the most effective platforms to accurately segment users and communicate the right

message to the right user at the right time and thus boost sales. Creating a positive brand wave among the

target group is a lot simpler and effective. Innovation is what will make you stand out, and make your

consumers want to “spread the gospel”.

Increasing Profitability

The current financial crisis has led many customers to distrust banks, which is one reason why a bank must

now turn to social media. Social Media provides a perfect platform to communicate product benefits,

updates and hence build trust.

Transparency

Getting a first-hand customer view of his needs and suggestions and that too in a structured manner can

become the most important tool in your arsenal for product research. Real time research, facilitates a

marketer to become more nimble and responsive to a customer's needs.

Product research

= Brand Ambassadors

The bottom-line is that Customer Engagement via social media is less about technology and more

about communicating the right message in an interactive and creative manner.

Social interaction is not monolithic; there are many channels that can integrate social media strategy to

provide a comprehensive customer experience. Every username is an individual representing that username

and he/she must be having a bank account, depositing money, investing money, and so on. Hence, flanking

ones social interaction strategy via mobile apps, real world offers, gaining insights on the created database,

predictive modeling, direct mailers, creating online virtual worlds, etc. is the right way to extend customer

engagement possibilities.

Banks could potentially miss opportunities to mitigate risk by choosing not to participate in social media. As

a result, we recognize the value of a controlled and closely managed approach to social media as one of the

many ways that banks can engage with its customers and prospects online.

The crux of the matter is that – today's consumer is becoming more-and-more tech savvy however, the

marketers aren't being able to catch up. Social media when clubbed with enhanced event-based marketing,

insights and creative digital communication, can create the perfect value chain to engage the end-user.

Customer Centria provides social media solutions ranging across channels and creates a customer

experience and engagement platform via Internet presence, mobile apps, virtual worlds and technology

services.

Customer Centria's thoughtful and balanced strategy can most definitely enhance Customer experience

through interactive channels like Facebook, Twitter, LinkedIn, mobile apps, games and perhaps a virtual

online bank branch. These channels help companies to provide a superior and customized experience to their

customers with lower costs. Customer Centria's dedicated marketing and technology services help you strike

the right chord with your customers, both present and future.

If we want to succeed in the Market place of Conversations, we have to enter the world of our fellow

consumers and customers and breathe the same air they're breathing. We have to Listen, Engage,

Energize, Motivate, Share, Laugh, Empathise and Serve. We have to trust as much as be trusted. We

have to Love as much as be loved. We have to relate as much as we seek a relationship. There in lies the

truth.

We have no choice but to adopt the C2C idiom or be left out…forever.

- C R Vinay, MD, Customer Centria

“Social Media facilitates 'shared awareness', a phenomenon that has lately proved its power to even

change the fortune of a nation. Imagine the power with which it can work positively to protect your

brand from malicious rumors.” - Rahul Singh, Marketing Manager, Customer Centria