Firms everywhere are grappling with the social media mega trend. Initially casual and familiar sites such as Twitter, Facebook, Pinterest and more have entered boardroom conversations across a variety of businesses. For those selling material products the impact of a re-posted picture with a link to a website is measurable in clicks and subsequent sales. Unfortunately for financial service, the lines connecting social media efforts and revenue are blurred, but that hasn’t stopped the continued dedication of resources to these efforts.
Interest from the C-suite has helped departments increase funds for dedicated staff and increasingly complex platforms. As social media managers work towards producing hard data on social’s ROI, the consensus today appears to be that social is an ideal means of differentiation, and a necessary expansion of traditional customer service efforts.
The Evolution: From a One Man Show to Inter-Departmental Collaboration
Sunayna Tuteja, director of online communities and social media at TD Ameritrade says part of her job is to figure out how Twitter enables clients and adds value to the way an online broker engages with employers, clients and other stakeholders.
Tuteja sleeps, dreams and lives all things social, constantly looking at where the market place is going and how communications are resonating with clients. But at the foundation, TD believes a capable social response team is critical to anything successful in the space. “Social is the new 1-800 number, and we have a team integrated within the service organization,” she explains. “It’s not about building something new, rather we are tapping into our current strength.”
TD’s dedicated team works seven days a week, twelve hours a day to engage clients and prospects on social platforms, help with questions and direct them to appropriate resources on the website. They see engagement as a critical component because social is not a monologue, and you must be there to engage in a dialog.
But when it comes to the everyday she says it has to be wider a team effort. “I’ve become great friends with the legal compliance and privacy teams,” she jokes. “Everything needs to be done within the guardrails of our industry. Teams like ours think about social, but enablement has to be a collaborative approach.”
@BeccaLipman Hey Becca, we'll need more than 140 characters for that! Call our media line at 800-400-1336 & we can get in touch there.— TD Ameritrade PR (@TDAmeritradePR) January 9, 2014
From another angle comes Carol Kennedy, chief branding officer and VP of corporate communications at the Chicago Board Options Exchange (CBOE). From her perspective all the buzzwords around social media apply to the exchange in spades. “Our customers are data driven by nature and they want information. And they want fresh information, intra-day information, and they are very tech savvy, so they are a natural for consuming information that way.”
But as a publicly listed company and self-regulatory organization, Kennedy explains that internally CBOE is also wrestling with legal questions around what can be shared. Social is still in a development stage, leaving grey areas with the legal team around the nature of disclosures. This takes time, distracting from the instantaneous benefits of social media dialog. Surely all financial firms, large and small, buy side and sell side, can commiserate.
Extended Hours $VIX Futures volume close to 6,000 contracts - January VIX down 0.10 to 13.70 - VIX closed at 13.28 - Jan expiration -1/22— CBOE (@CBOE) January 14, 2014
Building the Right Tools:
In the face of the regulatory and legal framework the right technology capabilities between departments are critical. “We want to do this in a matrix consistent with what’s expected from a critical, legal and privacy standpoint, but also making sure it’s seamless,” explains Tuteja.
When once there were a handful of vendors with similar products, today’s arena is exploding with vendors and new capabilities. In a recent study by Sprout Social, it was found the average company uses 10-12 tools to manage Twitter alone across the firm, although there is an increased effort to consolidate. Consolidating requires a platform that can cater to needs and track the various departmental goals and incorporate various, even obscure, media sites.
More importantly, the market is still in the early stages of developing metrics that can help firms to uncover the social ROI. Learning what can be measured and what those measurements mean will help to candidly balance expectations and needs. “Niche vendors are starting to emerge as these needs grow. Everything we do we want to make sure we have a view towards being analytical and measuring what we can.”
[For more about social media trends, read: 7 Financial Services Social Media Insights from Sprout Social to learn more.]
Interaction: Adding Value to the Discussion
According to Kennedy, the data CBOE gleans from social is passed along to marketing, business development, and communications teams and incorporated into the blogging team and educational arm. The results, it hopes, is to develop more topical content faster to feed the discussion.
“We look at what’s trending every day, when and where we see the most activity, and monitor what topics the market place is interested in and where its focus is in,” she explains. “We’re finding the most relevant information. We have a ton of data and content, so the challenge is curating it and pushing out at the right moment. For us it's not about the right number [of likes]. Sure, you want to grow your following, but it's about engaging, we feel the people who follow us are engaged customers and we want to stay relevant to them.”
She adds, “It started out as new tool, now we're getting more disciplined about it.”
Beyond the bigger players, social media is a networking and marketing paradise for mid and small sized financial firms. Joe Saluzzi is partner and co-founder at Themis Trading, a small independent brokerage firm specializing in equities in Chatham, New Jersey. Saluzzi is also active on Twitter, which he uses to be part of the conversation and as a surprisingly helpful trading tool.
He keeps a tweet deck up on his screen all day, alongside his Bloomberg terminal, OMS and other standard systems. On Twitter he follows a carefully curated and streamlined collection of accounts that add value to his business. “Many times I see things on Twitter before I see it on my Bloomberg Terminal and I pay over two thousand per month for that,” he explains “I definitely think there's value added there."
They built a money machine- According to WSJ, the HFT firm Virtu had only ONE day of trading losses in their history http://t.co/obq6cSVtkW— Joe Saluzzi (@JoeSaluzzi) January 13, 2014
Saluzzi also sees wider business benefits from his involvement on Twitter, including increased views on blog posts and general publicity. "It lets us raise our profile," he says. "It has allowed potential clients to see our name, gotten us into conferences, and helped promote our book sales. Now I meet with a lot of folks in the industry and they say, ‘Hey, I follow you on Twitter.’ It can be surprising.”
To maintain his favorable Twitter reputation Saluzzi knows, like the CBOE, that he must continue to add his own value and unique content to the mix. “It is all about spreading a message,” he says. “If there's something interesting on a filing that came out, most people may not have seen it and it's important people know. And that stimulates debate, which I think is healthy."
Finding an ROI
“It's easy to make the case to increase funding for social media as a percentage of what we do here [at CBOE] in terms of marketing,” says Kennedy. “It's such an efficient way to reach people. I think we're past that stage where people ask if this is here to stay. In a dollars and cents view it's very efficient.”
Firms in the financial services space are using social media to achieve various goals in marketing and communication, but all face similar questions around the cost of engagement and the best tools to do the job. And unlike other facets of a financial institution, social media is taboo to outsource, requiring an increased dedication of in-house resources especially as volumes of engaged customers rise. Senior level managers are taking notice, asking more specific questions about what tools their companies are using, and considering the cost and resource efficiency.
The ongoing challenge remains how a firm can quantify the impact and calculate the ROI of social. Internal collaboration, standard metric and uniform platforms across the firm will be essential to achieving that goal.