3 Reasons Why Social Media is Important for Banks and Credit Unions

Author: BankFeeInsider.com     Tuesday, August 19, 2014 12:00 AM

Competition for customers in the financial industry is fierce, making it important for banks and credit unions to leverage social media to their advantage. Facebook, Twitter, Pinterest and a variety of other social sharing platforms provide institutions with marketing tools and dynamic communication mediums. There are three specific advantages banks and credit unions stand to gain by using social media.

 

Cost-Effective Marketing Campaigns

 

Direct mail, telemarketing, and promotional events tend to cost businesses more than social media marketing campaigns. For instance, if a bank wants to promote a new interest rate for home mortgages or a discount on opening a business checking account, sending sales letters to clients can be expensive. There are the costs of postage, letter stuffing, writing and graphics, all of which drive-up the overall expense of the campaign. Plus conversion rates are likely to be low, given the method used to select mail recipients. Social media sharing, in comparison, can be targeted to fans worldwide at a fraction of the cost.

 

Consumer Feedback

 

Understanding customer preferences and listening to their concerns is critical for success in any type of business. For banks and credit unions, it is important to gather sentiments on current financial products and services, plus the challenges consumers are facing obtaining lending. If a bank posts a message on Twitter regarding a new rate for personal loans and the reaction is bad or mute, then marketers can draw inferences about the appeal of the promotion. Complaints are easily aggregated using social media and documented for further research, which helps financial institutions track the voice of the customer.

 

Market Analysis

 

Financial institutions with fan pages can track the characteristics of their followers and determine important information about their target markets. It is important to know what consumers hold valuable and what they may want financing for in the future. Home loans, boat loans and school loans are among the products many bank customers need at different points in their lives. Recognizing these requirements and developing financial products to fulfill them is critical for business success. Social sharing platforms make it easier to gather market intelligence and adjust to shifts in demand.

 

Social media is a powerful tool for financial institutions and can increase market penetration while reducing operating costs. The power of the Internet makes it possible to reach consumers on a global scale in an efficient and effective manner.

Source: BFI