SDL: power of social media – Liz High
The rapid rise of social media has taken many financial services institutions by surprise. Sites such as Facebook offer a potential customer base of many millions, and provide great insight into individual opinions and preferences. But making sense of such a vast, unstructured world is a challenge that few know how to tackle.
This is not helped by prevailing attitudes, with executives often taking a strategically limited approach to social media. Many view it simply as setting up a corporate Twitter feed to gauge customer feedback or promote new products. Such measures generally prove ineffective, and raise a host of legal and compliance issues.
In the opinion of Liz High, senior director customer experience measurement and analytics at SDL, financial services institutions should instead view social media as a huge depository of untapped data.
"If you use social media to interact with customers, there is often nervousness around responding in what is seen as an unregulated environment," she explains. "That's why the best way to view it is as a data set that is growing by 50 million comments a day. When you understand how and when to use social media data, it becomes a very powerful tool."
Banks spend millions of dollars a year tracking their brand promoter score or gathering customer satisfaction data. These traditional metrics are of limited effectiveness, providing only the answers to questions that have been asked, not what is truly important to the customer.
"You might ask, 'How satisfied are you with your credit card?'," explains High. "The response might be 'Very'. But what the customer really wants is something that rewards them in away that is targeted to their life. You will never find that out by just asking about the product - you need to listen to what is on their agenda through social media and build structure around it."
An analytical approach
Structure is the big problem with social media. Many analysts view social media data as woolly and unscientific. It is based on sentiment, which can't be organised, analysed and acted on like hard data. But the potential of social media to overcome the limitations of traditional marketing makes it too big a prize to ignore. SDL, a leader in global information management, set about trying to combine the variety and breadth of social media data with a more rigorous, analytical framework.
"Since 2007, our developers have been collecting huge amounts of social media data," says High. "This includes comments from mainstream news sites, brands mentioned in articles and forums... not just classical sources. If you can look back at 2008 and identify the one really good thing that you did, and what people were saying about it at the time, you can replicate it."
To do this, SDL brought together a panel of real people and looked at their offline behaviour in areas such as financial management and information technology. They were then given permission to access these individuals' social media conversations. An algorithm was created based on people's social media conversations that was statistically correlated to real-time behaviour.
"For example, we asked people on the panel to tell us which brands they were likely to use over the next 12 months," High explains. "We then collected the social media conversations where they talk about these brands and used the two measures to create an algorithm that asks the question, 'Which part of a person's social media conversation predicts what they are doing in real life?'. We know through this that there is a very strong correlation between what they are doing in real life and the language they use online."
The main benefit of this is that banks can find out not just whether a customer has a positive or negative view, but also if this view affects the way they spend money. If they know what kind of language is associated with an individual looking to buy, social media can become a predictive measurement system. SDL has built a product predicated on this.
"We are in the process of creating global benchmarks for a huge range of banking brands and launching it on the market," High says. "These benchmarks are delivered through a tool that allows you to visualise what is happening with your scores and compare your marks with those of your competitors - all measured in real time."
The system focuses on three different scores that measure product commitment, brand commitment and customer relevance. The scale is standardised at 1-100, from non-existent levels of commitment to having customers who are fully committed and regularly advocate the brand. In financial services, a lot of time and resources are put into promoting brands. But this action is somewhat misguided, according to High.
"In the financial services space, levels of brand commitment are all around 30-35 on the scale," she says. "It's a very non-emotional journey and many customers stay with a bank out of inertia. Where we see a lot of variation is in products. Innovation and being smart about the way you tweak products can lead to a noticeable rise in commitment in a way you don't see for brands."
This is exemplified by the case of Santander, which is the only bank to get above 50 in the product commitment stakes. In the final quarter of 2011, the Spanish bank released plans to "turn the savings market on its head" by offering an account that pays all interest up front. If a customer opened an account before 20 November with a deposit of £12,000, they would receive a net interest of £1,000 on 2 December, just in time for Christmas.
"Santander did well generating buzz around a unique and clear value proposition," High explains. "This is in a market where that rarely happens. The real opportunity is focusing on innovation, not brand building, as such. The root of that is a good product launch, good packaging and the message that sits around that."
Another area that banks can use social media to boost their performance is in customer commitment. A leading Australian retail bank had launched a product that was struggling to attract new customers.
The bank's brand commitment score was quite high, however, particularly among its more affluent, financially literate customers. By reshaping the message towards this demographic, the bank was able to launch a more effective campaign brief.
"You can use social media data to visualise the customer, to create a persona and, at a conceptual level, develop a more customer-centric way of thinking," High says. "If you are thinking about a big data strategy, this structured set of metrics is the best route in. Until your data is structured, you are never going to be able to effectively integrate social media."
SDL's plan for the next year is to make its social media platform as ubiquitous and highly regarded as Net Promoter Score. The company wants to see brand and product commitment scores, and customer-relevance measures taken away from the marketing and PR departments, and put onto the scorecards of all executives in the banking industry.
"Now it's all about getting this system tried, tested and proven, and to get people talking about it," High explains. "One of the places we believe this can work most effectively is financial services. It's a very natural fit for them. Plus, if we can convince banks, we can convince anybody."