The social media site Twitter, which was recently valued at more than $1 billion, has quickly become not only a cultural phenomenon but an important - and relatively inexpensive way - of connecting with customers and attracting new consumers. Social media can be defined as internet-based communication tools that allow users to post, exchange and discuss their own videos, audio, text or multimedia.
The microblogging site Twitter enables users to communicate with their "followers" through short, 140-character updates. The site boasts 18 million active users - defined as account holders who access the service at least once a month - and projects that number will skyrocket to 26 million in 2010. Included in that current number of 18 million users is an increasing number of banks.
As banks face dwindling margins and increased congressional pressure, lenders are turning to new forms of communication to retain their customers and attract younger "unbanked" folks who are online all the time. Let's look at which banks are using Twitter and what they're "tweeting" about:
- Bank of America (@BofA_help) has an official "Twitter rep" who regularly posts to "help, listen and learn from our customers." For one of the largest banks in the country it has a paltry following of just 3,383 - it might have something to do with its constant reply of "I work for Bank of America, is there anything I can do to help?" in response to disgruntled followers' tweets. Keep reading for B of A's most recent social media emergency.
- Wells Fargo (@Ask_WellsFargo) has six featured staff online using Twitter to handle customer questions. Still a lot of "sorry you're frustrated, can I help?" posts like B of A but they seem a bit more engaged, making use of site features like Twitter Hashtags to help customers search for information on specific topics. (Whether you're moving or have just found a better no-fee plan, find out how to switch banks with ease in How To Break Up With Your Bank.)
- Wachovia (@Wachovia) uses the same approach to Twitter as its parent company, Wells Fargo. With 5,371 followers it seems to be doing a little bit better at connecting with customers and the Twitter community at large.
- INGDirect (@INGDIRECT) has a witty online personality, tweeting jokes, trivial fun facts and humorous industry-related observations (i.e. "bank fees are like financial wedgies.")
- E*Trade (@etradebaby) builds on its popular e*Trade baby commercials by making the cherub-cheeked spokesmodel its Twitter "child prodigy, financial wizard" spokesperson, ahem, spokesbaby. Not much in the way of actual advice or help offered here - but it's a pretty funny use of the service and very brand-consistent.
- USAA (@usaa_news) uses Twitter as more of a press release distribution system than customer service site for its 6,532 followers, most of whom are their military community customers. (Find out how to get the bank to pay you for using their services, not the other way around. Read Cut Your Bank Fees.)
But it's not just the big-name banks that are using Twitter to enter the social media foray. Some smaller regional and even local banks are as well, including:
- The Pioneer Credit Union (@pioneercu) in Green Bay, Wisconsin has its Marketing Specialist sharing information about "goings on at the (nearly 100-year old) CU." (In weaker economic times, banks may be tested by the government to see how safe they are. Check out Banking Stress Tests: Would Yours Pass?)
- First Federal Bank in Charleston, South Carolina (@firstfederal) tweets not only about its own promotions but also events in the local community (art exhibits and non-profit lunches).
- First Mariner Bank (@1stmarinerbank) is a local bank in Baltimore, Maryland whose Twitter tone sounds a little bit like Jim from "The Office" - casually connecting with its small (887) but growing following through witty banter and helpful suggestions.
- If First Mariner Bank sounds like Jim from "The Office," then Group Health Credit Union (@ghcu) sounds a lot like his soon-to-be-better-half Pam. Their Senior Marketing and Communications Specialist cheerfully advertises the company's Twitter intentions: "News + info to strengthen your family's finances. Tell us money issues you want to learn about; we'll do our best to point you in the right direction!"
While banks are one of the slower industries to delve into the world of social media, they avoid it at their peril. Consider the case of the YouTube video that 14-year Bank of America customer Ann Minch posted on September 8. In it she screamed about the bank "jacking (my) interest rate to a whopping 30% APR" despite her claims that she never made a late payment and never went over her credit limit. Her video "went viral," with nearly 400,000 people viewing it in just three weeks.
One customer's dissatisfaction was now known by upwards of half a million people and was picked up by major media outlets including CNN and ABC News. To help put out the rapidly-spreading fire, B of A's Senior Vice President of Existing Customer Credit Services called Minch personally and offered to drop her interest to her former rate of 12.99%.
People like Minch are learning the power of social media and so are banks. Are you? To use Twitter, simply log on to the site (www.twitter.com), sign up for a free account and start searching for people (and banks) to follow. You never know how it might just pay off. (Learn another way that Twitter is influencing business in What is a "twinternship"?)