Engaged customers are brand advocates. They remain loyal to
their chosen brands, spend more and promote them within their
network. Ensure your brand is one of those chosen. Web 2.0 is the
answer.
The customer relationship is the critical success factor in
retail finance. As more time is spent online, web 2.0 will be the
essential part of the engagement, strategy, turning employees into
social media brand advocates, and transforming negative consumers
into influential word-of-mouth marketers.
This report uses non-public domain data and other exclusive
material to provide a comprehensive analysis of the impact of web
2.0 on retail finance, including:
- Tools and techniques demystified from Avatars to Widgets
- Creating a fantastic brand experience for all segments
- 2.0's role in operation and strategy, in particular; customer
service, marketing, marketing research and product development
- Understanding, assessing and mitigating the risks from new
activity
- Integrating 2.0 with other delivery channels
- Global best practice and case studies
- Emerging trends: prepare for the future world of web 3.0!
To purchase this report, or to request a report summary or list
of case studies, call Jeannie on +44 (0) 207 563 5640
or email info@vrlfinancialnews.com.
Web 2.0, or social media, with its emphasis on interactivity and
collaboration, can be a powerful way to engage customers online. It
has the potential to improve outcomes in a range of areas including
customer service, marketing, market research, and product
development
Financial services institutions have been somewhat slower than
other industries to embrace web 2.0. The main reasons are aversion
to the operational, compliance, and reputation risks that come with
employees’ use of the media and the proliferation of
consumer-generated content, and simply that it is a new and unknown
medium. Credit unions have been the fastest adopters. Their
community-orientation means they tend to already enjoy higher
customer engagement than their larger counterparts. They also see
web 2.0 as a way of differentiating their offerings from banks, and
revamping their images as more modern and “cool.”
The risks associated with using web 2.0 can be largely mitigated
with best practice implementation. This includes establishing the
right culture and guidelines for employees to engage in social
media – on behalf of the company and privately, and the moderation
and screening of consumer-generated content. Moreover, the
appropriate handling of negative feedback can turn the bank into a
more customer-oriented organisation and transform disgruntled
customers into advocates for the company. In practice, banks and
credit unions that have used social media have enjoyed
overwhelmingly positive feedback.
Fears about stepping into uncharted territory can be allayed by
starting slowly, planning carefully, and starting in an area where
the bank is already successfully engaging a community. Other
success factors include being authentic and transparent in all
interactions with customers, maintaining a focus on adding value to
the community, ensuring management buy-in for the project, and
ensuring that sufficient resources are available to see a project
through.
The wide range of web 2.0 tools that can be deployed by banks to
engage customers have had varying degrees of success so far.
Blogs and podcasts are easy to establish and are often the
starting point for a web 2.0 strategy They give the company a human
voice and are a useful channel for sharing information and ideas
and receiving feedback. However, unless a blog or podcast series is
launched for a time limited campaign it represents an open-ended
commitment of time and resources - and some observers have
questioned the corresponding return. The biggest challenge is
providing regular content that is informative or entertaining for
readers. Banks with blogs generally report that, while feedback is
positive from those customers who do interact, there are only
modest levels of participation.
The popularity of social networking sites has led many observers
to view them as the next big opportunity in online marketing, and a
powerful way of engaging the youth demographic. However, marketing
on social networking sites has had limited success so far. The main
reason is that users are too engrossed in communicating with their
friends to be interested in advertising. Those initiatives that
have been successful have been in the context of multi-media
marketing campaigns.
Online communities are a valuable resource for engaging
customers and gathering feedback and market insights. In this they
have many advantages over traditional surveys and focus groups.
Public communities are typically focused on the small business
segment and traditionally have had limited success. Private
communities are more conducive to fostering stronger relationships
and generally enjoy higher participation and better results.
Banks that have established a presence in virtual world Second
Life have struggled to engage the community, as users are generally
there for other reasons than to interact with banks. An alternative
approach is to bring customers into private virtual worlds for a
specific purpose such as education or entertainment. Banks have
also enjoyed more success in virtual world Whyville, which caters
to a much younger demographic.
Consumer-generated ratings and reviews are a widely used by
online businesses, and numerous studies testify to their positive
impact on a range of outcomes. Concerns over negative and/or
inauthentic reviews can be mitigated with best practice
implementation
Web 2.0 offers various ways to make banking offerings more
personalised and customised. Notably some banks allow customers to
create customised credit cards by manipulating variables such as
reward rates and types, interest rates, and fees, to find the
combination that suits their specific needs. A risk of
customisation is ‘mass confusion’ - whereby an excessive variety of
choices leaves customers overwhelmed. This can be mitigated with
guidance and education.
Integrating personal financial management (PFM) solutions into a
bank’s website has a number of potential benefits in engaging
customers, helping them reach their financial goals, and better
understanding their needs. While there is still not a strong demand
from consumers for the functionality, banks face a risk that if PFM
services are provided by a third party, they can steal customers
“eyeballs” from banks’ online banking portals.
Interactive online tools such as widgets, mashups, RSS feeds,
virtual agents, and instant messaging are all effective ways of
delivering assistance, information and alerts to customers in an
engaging way.
Viral marketing is most effective when it goes hand-in-hand with
broad consumer awareness created by traditional media advertising
and a strong product and service offering. Viral marketing and
other web 2.0 tools are often integrated with multi-media marketing
campaigns which combine them with more traditional marketing
approaches.
It is early days and not yet known which approaches will yield
the best results long term. The experience of the pioneers is
instructive however and a lot of important lessons have already
been learned. As consumers spend an increasing amount of time
online, web 2.0 tools will increasingly become a part of the
marketing mix and an essential part of engaging customers online.
Banks are therefore wise to experiment with different approaches
and develop their capabilities in the new medium.
Web 2.0 tools are best deployed in the context of a broad
multi-channel approach that seeks to enhance customer engagement
through all of a bank’s activities and points of interaction with
the customer.
Section I – The case for using web 2.0 to build customer
engagement
Chapter 1 – Web 2.0 and customer engagement
Chapter 2 – Customer engagement and web 2.0 in customer
service
Chapter 3 – Customer engagement and web 2.0 in marketing
Chapter 4 – Customer engagement and web 2.0 in market research and
product development
Section II – Web 2.0 tools for customer
engagement
Chapter 5 - Blogs
Chapter 6 - Podcasts
Chapter 7 - Social networking sites
Chapter 8 - Online communities
Chapter 9 - Virtual worlds
Chapter 10 – Consumer-generated ratings and reviews
Chapter 11 - Personalisation and customisation
Chapter 12 – Online personal financial management tools
Chapter 13 - Interactive online tools
Chapter 14 - Viral marketing and multimedia campaigns
Section III – Success factors in engaging customers with
web 2.0
Chapter 15 –Authenticity
Chapter 16 – Starting out
Chapter 17 - Risk management
Chapter 18 - Measuring customer engagement with web 2.0
initiatives
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