Using social media to engage financial services customers

1

Let Them Talk: Using Social Media to

Engage Your Customers

CEB TOWERGROUP RETAIL BANKING

May 22, 2013

2 © 2013 The Corporate Executive Board Company. All Rights Reserved.

CEB TowerGroup

The

Engagement

Opportunity

ROADMAP FOR THE PRESENTATION

Bank Customer

Usage of Social

Media

FINANCIAL SERVICES PRACTICE

CEB TOWERGROUP, RETAIL BANKING & CARDS


38% 37% 29%

36% 35% 30%

-32% -33%

-46% -37% -37% -37%

ProgressToward

AchievingFinancial

Goals

Income Savings Debt FeelingsAbout

PersonalFinances

(NorthAmerica)

FeelingsAbout

PersonalFinances(Global)

NegativeFeelings

PositiveFeelings

Feelings About Personal Finances Are

Improving in North America

Feelings About Personal Finances

Percentage of North American Consumers Ages 18 and Older Who Report Positive or Negative Feelings in

Aspects of Their Personal Finances, Q1 2013

n = 2000

Source: CEB TowerGroup




Yet Confidence in Financial Providers Remains

Low

Confidence in Financial Services Providers

Percentage of North American Consumers Ages 18 and Older Who Feel Confident in the Capabilities of

Financial Services Providers, Q1 2013

n = 2000

Source: CEB TowerGroup

28% 26% 20% 20% 20%

16% 18% 21%

13%

-26% -25%

-32% -30%

-37% -39% -39% -33%

-47%

Keeping themoney of their

customerssafe

Ensuringreliability andconsistency oftransactions

Keeping theircommitmentsand promises

Providinghelpful

guidance andadvice

Caring abouttheir

customers

Sharing thevalue of theircustomers

Offering clearand simplepolicies and

fees

OverallConfidence

(NorthAmerica)

OverallConfidence

(Global)

Little or NoConfidence

Completeor a Lot ofConfidence


THE YOUNG ARE MORE CONFIDENT IN FINANCIAL

INSTITUTIONS

Average Confidence Level


North American Consumers Ages 18 and Older1 by Age Segment, Q1 2011 to Q1 2013

n = 9,998 1Confidence in financial services providers represents the average across seven trust factors on a scale of (100) to 100.

Note: Numbers at the end of the line graph represent figures for Q1 2013.

-1%

-12%

-19%

-40%

-20%

0%

20%

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013

Ages 18-29 Ages 30-46 Ages 47-65

43%

43%

33%

19%

22%

36%

38%

42%

6

AND ARE SHIFTING QUICKLY TO THE ONLINE CHANNEL

28%

35%

45%

53%

2011 2013

In-Person

63%

40%

38%

33%

2011 2013

Online

Channel Preference to Learn About Financial Products and Services

Divided by Age, 2011 and 2013


CUSTOMER EXPERIENCE IS DECLINING FOR TECH-

ORIENTED CUSTOMERS


Engagement Indicators by Channel Preference

Percentage of Customers in Top Two Categories on a Five-Point Scale for Each Indicator by Channel Preference, 2010

Source: CEB TowerGroup Retail Banking

Personal Only

Technological Only

Technological Leaning

Balance Multichannel

Personal Leaning

Clear Understanding

of Who and How to

Contact Bank

Bank Willing to

Accept Feedback

High-Quality

Product Guidance

When Purchasing

Bank Cares About

Customers

0%

30%

60%

n = 3,044


IMPROVING THE DIGITAL EXPERIENCE PROVIDES

PAYOFF


Impact of Engagement on Loyalty Among Tech-Oriented Customers

Percentage of Technology-Leaning or Technology-Only Customers Who Took Indicated Actions Within the Past Year by

Level of Engagement, 2010

Source: Customer Experience Survey 2010, CEB TowerGroup Retail Banking

27%

21%

30%

15%

27%

65%

31%

7% 5%

12%

Recommended Firm Added or PurchasedProduct

ConsideredSwitching Banks

Closed an Account Moved Savings andInvestments toAnother Bank

Disengaged Engaged

1Engaged customers are defined as customers who agree or strongly agree with each of these engagement indicators: that they have a clear

understanding of who to contact and how to contact their bank, that their bank is willing to accept feedback, that they receive good or excellent

advice during the purchase process, and that their bank cares about its customers. Disengaged customers are defi ned as customers who are

neutral, disagree, or strongly disagree across each of the same engagement indicators.

1

n = 1,348


IMPROVING THE DIGITAL EXPERIENCE STARTS WITH

LISTENING TO CUSTOMER NEEDS AND FEEDBACK


Impact of Engagement on Loyalty Among Tech-Oriented Customers

Listening to customer needs and feedback and facilitating open and transparent business practices rank highly in

restoring trust and loyalty amongst customers. Investment in foundational voice-of-customer programs completes the

digital experience, particularly for tech-oriented customers

1

Brand-assisted experiences

Customer-assisted

experiences

Self-assisted

experiences

Connected

Customer

Experience

Selling

Servicing Validating


CEB TowerGroup

The Engagement

Opportunity

ROADMAP FOR THE PRESENTATION

Bank Customer

Usage of Social

Media


BANK CUSTOMERS ARE SOCIAL MEDIA USERS

How Would You Characterize Your Use of Social Media?

Percentage of Respondents, 2013

FINANCIAL SERVICES PRACTICE,


Source: CEB TowerGroup Research

N = 1,630

46%

32%

Contribute Do Not Contribute

Note: Contribute includes “I often read or follow them and contribute occasionally” and “I actively read, follow, and contribute to them.”

Do Not Contribute includes ““I sometimes read or follow them but do not personally contribute ” and “I often read or follow them but do not

personally contribute to them.”

Responses indicating no use have been excluded.

78%


BUT THEY DON’T KNOW IF THEY CAN INTERACT

WITH THE BANK

Can You Contact This Bank / Insurance Company Through Social Media?

Percentage of Respondents Who Are Unsure Across All Demographics, 2013




N = 3,542

73% 73% 74%

All Respondents All Age Responses All Investable Asset Responses


SOCIAL MEDIA RESEARCH OFTEN EQUALS ACTION

You Indicated That You Used Social Media To Do Some Sort of Investigation or Research in the Past Six Months. Which of the Following Describes How Your Use of Social Media Influenced You? Percentage of Respondents Who Indicated Yes, 2013




N = 440

39%

33%

25%

21%

13%

I told someone else about what I had learned

I chose a product or service other than what I originally planned tobuy

I asked more questions from the salesperson when I purchased theproduct or service

None of the above

I did not buy or use any service


VENTING TAKES A BACK SEAT TO VALIDATION

Which of the Following Describes the Ways You Have Used Social Media as a Customer of the Bank? Percentage of Respondents, 2013




N = 209

29%

26%

24%

20%

18%

13%

I like when others share positive experiences with the bank usingsocial media

I discuss my experiences with the bank using social media

I recommend the bank to others using social media

I use social media to see how others feel about the bank

Social media helps me make decisions about purchasing the bankproducts and services

I express my frustrations with my experiences at the bank


PRODUCT RATINGS & REVIEWS IN THE CUSTOMER

DECISION JOURNEY ADD SOCIAL VALIDATION

How do you provide social validation to prospects in the customer decision journey?

Ratings & reviews on financial products and services have become prevalent and are experiential table stakes for consumers



PRODUCT RATINGS & REVIEWS IN THE CUSTOMER

DECISION JOURNEY ADD SOCIAL VALIDATION

How do you provide social validation to prospects in the customer decision journey?

Ratings & reviews on financial products and services have become prevalent and are experiential table stakes for consumers



AS EXPECTED, USAGE TRACKS WITH AGE

How Would You Characterize Your Use of Social Media?





N = 1,624

12% 14%

28% 34% 14%

22%

23%

23%

8%

12%

8%

13%

33%

36%

36% 25% 33%

15%

6% 5%

18-29 30-46 47-65 66+

I actively read, follow, and contribute to them. I often read or follow them and contribute occasionally.

I often read or follow them but do not personally contribute I sometimes read or follow them but do not personally contribute

I do not use them


AND THAT TIES TO BASIC RESEARCH, TOO

How Have You Used Social Media to Help You Over the Past Six Months?





N = 1,259

37%

25%

22%

21%

16%

12%

21%

8%

16%

19%

4%

16%

To investigate a product or service that I was consideringpurchasing

To discuss a product or service that I used

To better understand a product or service that I currently have orrecently purchased

18-29

30-46

47-65

66+


GEN Y MOST ENGAGED IN BANK INTERACTION

THROUGH SOCIAL MEDIA




N = 208

Which of the Following Describes the Ways You Have Used Social Media as a Customer of the Bank?


31% 30%

32% 30%

29% 31%

46%

31%

18%

42%

17%

38%

20%

1%

23%

29%

20% 20%

3%

5%

3%

6% 6% 8%

I discuss myexperiences with the

bank using socialmedia

I express myfrustrations with myexperiences at the

bank

I use social media tosee how others feel

about the bank

I like when othersshare positive

experiences with thebank using social

media.

Social media helps memake decisions aboutpurchasing the bank

products and services

I recommend the bankto others using social

media

18-29 30-46 47-65 66+


POSITIVE EXPERIENCES ARE A HIT




N = 208

Which of the Following Describes the Ways You Have Used Social Media as a Customer of the Bank?


32% 30%

18%

42%

23%

29%

3%

6%

I use social media to see how others feel about the bank I like when others share positive experiences with the bank usingsocial media.

18-29 30-46 47-65 66+


CUSTOMERS SHARE STORIES ABOUT POSITIVE

EXPERIENCES AND ADVOCATE FOR THE BRAND




How can you get customers to advocate for the brand and dimensionalize the brand experience?

Customers share stories about how they achieved their goals or their relationship with the FI positively impacted their lives


CUSTOMERS SHARE STORIES ABOUT POSITIVE

EXPERIENCES AND ADVOCATE FOR THE BRAND



How can you get customers to advocate for the brand and dimensionalize the brand experience?

Customers share stories about how they achieved their goals or their relationship with the FI positively impacted their lives


GEN Y MOST ENGAGED IN BANK INTERACTION

THROUGH SOCIAL MEDIA




N = 208

Which of the Following Describes the Ways You Have Used Social Media as a Customer of the Bank / Insurance

Company? Percentage of Respondents, 2013

29%

17%

20%

6%

Social media helps me make decisions about purchasing the bank's products and services

18-29 30-46 47-65 66+


REMOVE BARRIERS TO CONVERSION AND IMPROVE

PRODUCT SELECTION




How can social experiences remove barriers to conversion and drive higher customer satisfaction?

Question and answer experiences within the CDJ allow the brand to highlight subject-matter-expertise in a 1:many fashion


REMOVE BARRIERS TO CONVERSION AND IMPROVE

PRODUCT SELECTION




How can social experiences remove barriers to conversion and drive higher customer satisfaction?

Question and answer experiences within the CDJ allow the brand to highlight subject-matter-expertise in a 1:many fashion


SOCIAL CAN ENGAGE THE MASS AFFLUENT, TOO

How Have You Used Social Media to Help You Over the Past Six Months?

Percentage of Respondents Who Responded Yes, 2013




N = 1,231

20%

13%

12%

35%

24%

15%

26%

16%

16%

To investigate a product or service that I was consideringpurchasing

To better understand a product or service that I currentlyhave or recently purchased

To discuss a product or service that I used

<$99,999

$100K - $999,999

$1M+


CUSTOMER WORD-OF-MOUTH IS THE FOUNDATION

OF AN EARNED MEDIA ASSET




How can you develop an Earned Media Asset that pays dividends over time?

Letting in customer word-of-mouth allows you to develop an asset that pays consistent, as opposed to episodic, dividends over

time by enhancing the performance of Paid and Owned programs

Create a Marketing Annuity

Earned builds on itself and scales as it fuels existing

Paid and Owned programs



QUESTIONS?
