Big banks using social media, to what effect?
Tom Dougherty, CEO – Stealing Share
5 July 2011
Social media is a must have, but it doesn’t create preference
A recent report from Change Sciences say there’s an increase in banks using social media – and that those efforts will transform the consumer experience.
Maybe, but they won’t change a bank’s market share.
“It has been our experience that big banks often confuse tactics with strategy.”
Online banking has changed the business model of banks for years because consumers would rather do their banking online than go into a branch. That meant banks had to reduce the number of branches because they have become, in effect, very expensive billboards.
It has been our experience that big banks often confuse tactics with strategy, which means they too often believe by performing those online tactics that it will make them seem up to date and preferred.
Most banks using social media are simply speaking to those who already use them. For those that don’t, the process of switching banks feels daunting. Therefore, those most likely to switch have reached a point of failure from their current bank, usually the last straw of a point of failure. We’ve all reached that point, but still don’t switch much.
Why is that? It’s because once we reach that point, we look at the landscape and find that all the banks promise the same things. Do we really think, for example, things will be better over there? No, consumers lump them all together because banks have lumped themselves together by marketing the same values.
It simply doesn’t matter one iota that, as a bank, you’re becoming more active in social media. It does not create preference because it is only a tactic, just as direct mail or advertising are, and everyone is doing it.
Only by having a different and more meaningful message than your competition will your market share increase.
One of the authors of the study, Steve Ellis, could have been addressing this when he said, “Among the big national and regional banks, there are pockets of change, but they are not yet more than this.”
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