Sales in Social Media


Social media brings benefits to sales representatives.  Social media allows sales people to connect with potential clients who may be interested in their products or services.  Social sites allow quick responses to potential or current customers who may inquire with questions.  Financial intuitions can benefit by allowing sales people to use social media as a new sales channel.  Nelson reports that 87.6% of sales planners using blog, forum, and social media, gained new clients (Nelson, 2010).  Salespeople who aim to create value for their customers can attempt to help them in achieving their goals with social media.  It is difficult for salespeople to create value for their customers through information with no value.  Rather, sales people should offer solutions continuously on social sites to earn and maintain trust (Agnihotri, Kothandaraman, Kashyap, & Singh, 2012).

Providing constant feedback and building strong relationships with social media users increase the ability to bring in more customers through word-of-mouth.  According to studies by Market Force, friends’ posts on social media sites influence 81 percent of United States consumers (dexone.com, 2012).  Banks can benefit by word-of-mouth by providing social media content in driving purchase decisions.

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Open Communication


Providing contact information on business social sites is important to allow people to contact a business who may have an interest in their products or services.  With millions of users on social networking sites, banks can benefit by allowing people with questions to email, call, or send messages with information provided on social sites.  Furthermore, surveys suggest that consumers are increasingly relying on social media to learn about unfamiliar brands (Naylor, Lamberton, & West, 2012).  Having a two-way communication system on social sites can help re-establish or establish customers.  According to a Genesys’ study, 90% of companies they studied did not provide an email address in their contact pages, but instead, 83% had a contact form that consumers tend to avoid (forbes.com, 2012).  As social media continues to grow and many businesses incorporate social media strategies within their organization, large corporations are starting to embrace social media.  Forrester Research found that sales of software to run corporate social networks will grow 61 % a year, becoming a $6.4 billion business by 2016 (usatoday.com, 2012).  The benefits of social media for businesses are growing and within the next few years, large financial institutions with a social media presence will see a positive impact within the organization.  MIT’s economist, Erik Brynjolfsson, explains that it takes five years for new technologies to show the full impact on companies while McAfee states that social networks are two or three years in for most businesses (usatoday.com, 2012).

Identity Theft and Privacy


Another major problem that can occur on social media is identity theft and privacy issues.  The high volume of personal information often displayed on social networking sites could cause possible stolen personal and sensitive information.  Cases have also appeared of users having photographs stolen from social networking sites in order to assist in identity theft.  As Twitter and other social media sites become more popular, the possibility of getting one’s information or profile hacked is greater.  Numerous celebrities have claimed to have their Twitter accounts hacked.

Privacy concerns have risen over a number of high profile incidents that can be considered embarrassing for users.  This concern affects banks because financial institutions have sensitive and private information from consumers (Balaceanu, 2011).  Along with other incidents of video posts on social networking sites, the ability for transferring personal information between users illustrates privacy concerns.  In addition, most social networking sites require users to agree to a Code of Use policy before they may use their services.  Controversially, the Code of Use declarations that users must agree to often contain clauses permitting social networking operators to store data on users, or even share it with third parties.  Facebook has attracted attention over its policies regarding data storage, such as making it difficult to delete an account, holding onto data after an account is deactivated, and being caught sharing personal data with third parties.  Sharing customer’s information can potentially damage a company’s image and create the perception of corporate irresponsibility (Jones, Temperley, & Lima, 2009).

Ignoring Social Media


Ignoring customer complaints on social media sites can worsen the problem that can gradually harm the company’s image.  Ignoring customers or potential customers can upset them.  Not providing feedback to consumers can affect a business negatively while potentially producing obstacles to improve the customer relationship (Tokunaga, 2010).  On a case-by-case basis, when customers post unwanted information on a company’s social webpage, organizations must avoid deleting the customer complaint or comment from the site.  

  • Deleting comments will give users a reason to share their experience with friends causing a negative image on the company.
  • A complaint from one or even a few customers can grow exponentially, costing prospect customers for the business. 
  • When dealing with complaints effectively, customers can tell their friends how good the company is on dealing with issues and what great customer service they offer.  This can also encourage an increase in new customers (Chen, Xu, & Whinston, 2011). 

Any bank or business can offer great service, but mistakes happen and customers can get upset and complain.  With the growth of social media, dealing with mistakes with two-way communication and engagement can offer better results.  Financial institutions need to have a clear strategy to manage their online image.  Businesses need to have procedures and practices in place to manage their reputation and risks involved when engaging with the community on social networks (Jones, Temperley, & Lima, 2009).

Negative Aspects of Social Media for Businesses


Establishing a social media presence alone does not bring visibility or increase sales.  Social media can help banks increase their reputation by interacting with users and always keeping a two-way communication dialogue open.  Two-way communication is important, especially for banks, since many consumers feel that banks have a bad reputation (Bonini, Court, & Marchi, 2009).  Negatively, social media can also harm a bank’s reputation.  Too many advertisements can push consumers away from a company’s social site.  Through the freedom of expression on social media, many active audiences generate their own content and opinions (Chen, Xu, & Whinston, 2011).  Word of mouth in today’s economy is a key factor that influences the audience.  Ignoring complaints on social media can cause unsatisfied customers to set up a Facebook war by defaming a company on their personal Facebook page.  Important to marketers, studies have shown that 3.5 billion estimated word-of-mouth conversations occur around the world each day, and about 2.3 billion of them refer to a brand, product, or service.  Word of mouth has manifested itself through digital and social media farther and faster (Evans, 2012).

Cost Effectiveness and Crowd Sourcing


Organizations with a social media presence attempt to gain a larger customer base to market product and services at a relatively low cost.  Unfortunately, social media presence requires more than making a Facebook page.  Building relationships through social media with consumers is important, especially for banks in order to promote and build trust.  Unlike social media, traditional marketing can be difficult in establishing two-way communication.  Two-way communication should be about helping others, answering questions, and providing informative data.  Seventy percent of content should be about catering to current and potential customers by providing resources, information, and value added activities (Ginovsky, 2011).  Most social media sites are free of charge and can cost a lot less to promote products and services compared to traditional media.  One of the metrics used by marketers to determine the cost-effectiveness of marketing efforts is cost-per-impression (CPI), or the cost required to gain the attention of just a single member of their audience.  Social media marketing channels like Facebook and Twitter yield a CPI lower than that of traditional marketing.

While social media can help build relationships for banks and lower the cost for marketing, social media can help gather important information and increase visibility through crowd sourcing.  Crowd sourcing is an effective way to leverage the reach of the crowd through content marketing.  Brands like American Express OPEN Forum grew rapidly by crowd sourcing.  American Express tapped into the crowd of industry experts and invited them to write free content for the website (openforum.com, 2012).  Content can come in many forms, including reviews, comments, images, videos, and more.  Crowd sourcing can help banks gather information, surveys, and public opinion by crowd sourcing on social media.

Most social media sites, like Pinterest and Facebook, can help banks with crowd sourcing.  To leverage crowd sourcing in social media marketing, banks can invite customers to pin content on Pinterest pin boards or share pictures and videos on Facebook or other social media sites.  This helps keep customers engaged by allowing them to comment and provide feedback on the things that interest them the most.  Pins, videos, and images can explain contests, quizzes, concepts of products or services, or a collection of interesting mages.  There are many ways to leverage the crowd to assist with direct and indirect promotion of goods and services.  Seth Wescott, an Olympic snowboarder, in conjunction with a bank generated 2,745 visits to the bank’s website and 14,486 page views because the engagement of users (Ginovsky, 2011).

Social Media Surveys


Many organizations have focused on customer surveys to determine the effectiveness of their services and products and the current satisfaction of customers.  For banks to be successful in the intensively competitive environment, they are bound to attach importance to customer satisfaction.  While surveys give important information about customer’s experience, how effective are they?  Developing and posting surveys on social sites are beneficial for banks who want to reach a large specific audience.  Posting surveys and questions on social sites are helpful in establishing relationships and gathering information on customer needs and wants.  Constantly communicating with customers and potential clients via social sites can reinforce customer loyalty.  To overcome reduced customer satisfaction on social media, banks need to concentrate on adapting to each customer’s needs and values by treating different customers in different manners and providing products and service that fit their needs (Koçoğlu & Kirmaci, 2012).  Currently, Gallup tracks all of Wells Fargo’s 270,000 employees with a regular questionnaire and surveys about customer satisfaction (Businessweek.com, 2012).  Surveys can help businesses change strategies to improve customer satisfaction when customer surveys are negative.  Networking sites are important tools for engaging directly with unsatisfied customers.  Banks must deal with bad information from surveys immediately to avoid customers from switching to competitors.  In Wells Fargo’s case, negative surveys conducted by Gallup should require immediate response.  Calling back upset customers is important to retain and improve relationships.  In general, providing constant feedback and providing surveys on social sites help minimize issues and pinpoint problems that can arise in the near future.

Social media is an important tool in improving and retaining customers because of the large outreach it has worldwide.  Allowing constant communications between banks and consumers helps increase loyalty and improves trust.  Studies show that financial institutions have been slow to embrace social media strategies (nytimes.com, 2012).  In addition, according to Scorpio Partnership, Standard Chartered Private Bank, and SEI Global Wealth Service, 40 percent of young high-net-worth individuals viewed social media important for communicating with banks (nytimes.com, 2012).  Social network sites help businesses, especially banks, improve and retain customer relationships.