Publications & Resources

March/April 2011
Innovation

Social Media and Launching a Retail Banking Product

By Heidi Hahn

The Plan Creates the Foundation

A bank’s involvement in social media should be based on its business strategy and marketing plan. The marketing plan sets the foundation for a new product launch or the re-introduction of an existing banking product. The work that goes into developing a plan may not be glamorous, but having a systematic process in place is necessary for the success of any product launch.

The discipline of building a marketing plan that includes specific strategies, action plans and social media tools can have a profound effect on reaching specific target markets segment, such as Generation X and Generation Y customers. The key is leveraging traditional marketing disciplines, such as segmentation and targeting, in order to achieve meaningful results within this new, non-traditional medium.

Targeting Gen X and Gen Y

The Gen X and Gen Y target markets should be the focal point for initial social media forays. Understanding this segment’s potential within your bank’s market area provides a good starting point for market plan development. In other words, an old-fashioned market segmentation project can become the basis of your plan to leverage these new social media and online marketing tools.

Why are bankers trying to reach this new generation of customers? The following chart compares the growth rates in online banking among Baby Boomers, Gen X and Gen Y consumers.

The younger generation is fueling the growth of online delivery and banking products. Members of this demographic include individuals who are convenience-oriented and familiar with online delivery systems. Banks looking for impactful product launches need to understand Gen X and Gen Y customers and prospects in their market areas. An analysis based on demographic data from sources such as Neilsen/Claritas can help assess the impact this demographic will have on new market segmentation. Once that impact is quantified, the appropriate tactics can be applied in order to maximize market potential.

The segmentation then guides the development and implementation of innovative social media tactics and projects. A marketing segmentation analysis should include:

A review of the competitive landscape in terms of institutions and offerings
Identification of target market segments and demographic profiles for the most desirable prospects
Strategies for communicating with target markets and for creating new product awareness
An internal communications plan for stakeholder updates and buy-in

While marketing efforts can target all segments and locations, special attention must be given to the valuable Gen X and Gen Y demographics. This is where online marketing and social media can help. These tools should be used in conjunction with traditional marketing media. Bank marketers should target small populations to receive offers through different online channels and be ready to respond immediately to inquiries. Experiment and adjust, while pursuing which tactics pay off most rapidly. The hard part of marketing is uncovering your target − the fun part of marketing is developing the right creative delivered through the appropriate channel.

Tactics to Get Started

Tactics for leveraging social media in order to reach Gen X and Gen Y for a new retail banking product launch include:

Establishing a social media team and defining responsibilities for keeping content updated and fresh.
Building a Facebook page for your bank. In this type of online community, it is important to build a strong reputation before you can successfully use it for straight product marketing. Begin by informing members of your community involvement efforts. Once your presence is established, use Facebook to announce new product details and special offers.
Enlisting social network leaders (based on blog followers or Facebook friends) to comment on any positive experience they have had with your new retail products.
Opening a Twitter account and then leveraging it to broadcast any new special offers associated with the product launch. Make sure you collect all new e-mail addresses obtained through Twitter for use in future online communication.
Writing financial advisory articles in support of the new product you are launching and publishing these articles online with a specific section for online comments.
Monitoring online sites and blogs for any mention of your bank’s name to keep tabs on the buzz your bank is creating. Establish a team within your bank to respond to any negative comments that surface within the online buzz and chatter.
Marketing planning and segmentation do not guarantee your social media efforts will be wildly successful right away, but they do help ensure you are reaching the correct audience and can improve your chances of success while raising your market intelligence.

Heidi Hahn is senior marketing consultant for FIS Consulting Services She can be reached at heidi.hahn@fisglobal.com or (414) 357-3649.