Social Media an Effective Channel to Reach Consumers, Build Loyalty

Mintel Comperemedia may have found the secret weapon many banks need to help combat consumer distrust: social media. Less than half of respondents to a recent survey stated that they believe their bank is a company they can trust, and a full 50% stated that they have less trust in banks than they did two years ago. 

In the same survey, 22% of consumers said that they think that social media sites help them make good decisions about purchases, and an equal number say that social networking sites help them make good decisions about their life in general. This segment of users are likely to be receptive to social marketing that offers tips and advice for making financial decisions.

"The percentage of consumers with positive perceptions of bank brands has dropped substantially in the last year," says Susan Menke, VP of financial services with Mintel Comperemedia. "Obviously there is a crisis of confidence in the banking industry."

Forty-​three percent of social networkers report using social networking sites for purposes other than connecting with friends and family. The diverse number of ways people use such sites leaves a window open for financial institutions to make meaningful connections with unlikely customers and build loyalty with current ones.

"Nearly one in three social network users value the opinions and recommendations of family and friends over industry experts, or any other source of information," notes Susan Menke. "Banks can take advantage of that established trust to promote confidence in their brands."

Ideally, banks can create social networking sites that allow established customers to recommend their bank and its services to friends and family, effectively building relationships with consumers they might not otherwise reach. Mintel's research also suggests that the most effective ways for financial companies to engage consumers on social networking sites is to offer incentives — such as coupons to local businesses or donations to social causes.

"Social media is a relatively new channel for many financial companies, but indications are that it can be a very effective way to reach consumers," states Susan Menke.

[Source:  "Social media, banks’ secret weapon to combat consumer distrust."  Mintel Comperemedia.  11 May 2010.  Web.  19 May 2010.]