Marketing gets friendly

To attract the customers of tomorrow banks need to embrace social media

By Simon van Wyk

October 5, 2007

It’s commonly held that once you choose a bank, you stick with it. Your bank moves with you through life’s stages – offering everything from student loans to credit cards to mortgages. Financial services institutions are fully aware that the lifetime value of a penniless student can be substantial, and naturally there’s fierce competition.

But while the financial services industry has been sophisticated in targeting the student customer segment, developing a range of products and services to suit their needs, marketing to students is a whole new ball game.

The clients of tomorrow 

Today’s students don’t use traditional media, they don’t want to be interrupted, and advertising turns them off.

Having grown up with technology, today’s students are comfortable with blogs, podcasts, wikis and instant messaging. They’re also extremely high users of social networking sites such as Facebook and MySpace. And they depend on referrals from credible sources such as friends, family, and even trusted brands and blogs.
And it is these shifts that financial services companies are struggling to come to terms with.

Social media strategies

Traditional banking brands are now competing with a slew of online financial services sites and channels that embody the trends, technologies and connections that have been adopted by the 18-25 year old demographic. 
With behaviour changing based on social networking and technological advances, financial services marketers have to make their content accessible by moving into the online domains and social networks that young people inhabit.

This means you can’t simply expect them to find you, and it also means more than your website – a mindset shift in itself for your online content strategy. You’ve also got to provide relevant information, and speak in a way that's respectful and in tune with your target and how they communicate on and offline.

No wonder some banks are joining Facebook! 

More than a pretty face

Currently, most of Facebook's revenue comes from Microsoft banner ads. But it also directly sells more innovative marketing concepts such as sponsored profiles and user groups, and provides companies with a platform to create tools and services.

And financial services companies are starting to join in. Last year, Chase was well ahead of the pack when it negotiated a one-year exclusive deal on Facebook to market its credit cards to students. More recently, TD Canada Trust launched its own Facebook user group called the TD Money Lounge as a means to communicate with students. And another Canadian bank, the Royal Bank of Canada, has its RBC Campus Connection.

To back up this activity, Hitwise data shows that Facebook currently ranks 20th in delivering traffic to retail websites – including banks – and that 4 per cent of people leave the Facebook site to go to an online retail site.
The challenge for banks is to ensure the Facebook experience complements and reinforces their brand.

This hasn’t quite worked for HSBC. Students in the UK recently bandied together, forming a Facebook group called “Stop the Great HSBC Graduate Rip-Off”. More than 4000 students voiced their anger over HSBC charging for overdrafts on student loans. The group won wide publicity on and offline. Such was the backlash, HSBC abandoned its fee plan.

But social media is not just about how to leverage Facebook.

Athough the Royal Bank of Canada has already formed a Facebook user group, their social media strategy has evolved far beyond just that.

Until October 31, the bank is accepting online video applications for six student blogger positions. Once hired, the bloggers will initiate and coordinate online discussions on the new RBC p2p website about money as it relates to them as students. In true net-generation style, the final six will be chosen by their peers, who can vote for their favourite application on the website. RBC p2p is being billed as a site for students by students.

A student like me

RBC’s idea is that college kids can learn about budgeting, savings and investments from others going through the same experiences.

With a tone and style that is very “non-bank”, RBC p2p promises to provide an online forum for students to speak openly and honestly about their financial issues and concerns. All of the site’s content will be driven by students.
Michel Savoie, leader of the blogging team, says “I see RBC p2p as a place where students can share stories and experiences and talk about solutions that will work for them - and what better way to do that than with a site for students, managed by students.”

Simon van Wyk is founder and managing director of HotHouse Interactive ­– the company that builds businesses online.