A way of defining UGC is any content not paid for by the organisation. There is rarely any money in UGC for the user, but what about the website? Good online marketing, use of social media and UGC can be very lucrative for businesses. Otherwise, why would they spend millions trying to get it right? I approached Craig Freeman to find out how this works for financial services.
Craig Freeman is the Digital Account Manager at Fwd Marketing. Since graduating with a BA (Hons) in Business Adminstration, Craig has worked with a number of B2B and B2C brands to build their online presence. As a digital consultant at FWD Craig is working to highlight opportunities and implement strategic campaigns to maximise their online potential using new media and Web 2.0.
Here’s what he had to say…
Online user generated content and financial services have not traditionally gone hand in hand. In fact, I have been in meetings when just the mention of a blog, Twitter or online community is enough to send a Marketing Director running for the hills. From what I have observed there are a number of drivers behind this reaction.
1. The fear of the unknown
Financial service organisations include banks, insurance companies, hedge funds and everything in between. If you were to profile the senior management teams you would discover that the majority would be made up of the baby boomer generation. This generation have had computers and the internet somewhat thrown upon them. Lets just say that understanding and participation in this digital world does not come naturally to a large percentage, meaning that social media and digital marketing is not a priority when budgets are divided.
2. The fear of public opinion
Reputation, brand recognition and recommendations are essential to financial service organisations for keeping customers and drumming up new business. Therefore marketing departments and senior management are fiercely protective of the company’s image. So much so that compliance departments that sign off processes are more important than innovation and free thought within these organisations.
There have been some very high profile cases of brands being damaged, not just on confined to one website, but globally. Habitat spamming Twitter is a prime example of how vocal the public are willing to be online. A marketing campaign costing £3million was needed to repair the damage done. Therefore until a financial services brand is sure that efforts across social media will provide a return on investment, they are not willing to risk their reputation.
3. Financial service brands choose to be laggards
Marketing campaigns within financial services will rarely win awards for innovation. Due to the fear of the unknown and fear of public opinion, brands in this sector will only adopt marketing practices that are tried and tested. Websites are more often than not low functioning, non-transactional and little more than an online business card or brochure. This is especially true when it comes to business to business brands as they place little weight on digital efforts for generating sales. The bigger the organisation the less likely they are to enter into the online world. They will wait until mistakes have been made and learnt from by lower level players within the industry, and until large brands in other industries have moved onto the next Facebook or microsite tool.
Playing without the fear
Luckily though, not all financial service organisations let the fear override their desire to grow and social media adoption is beginning to take off. Some have early adopters and innovators at their helm, others give it a go out of curiosity, and the rest then follow suit because their competitors are doing it. And what is it they are doing exactly?
Some brands are using user generated content as a tool for enhancing customer and client communication. Aviva is a shining example of this as they have opened Twitter up for publicly viewable complaints. They have made the decision that it is better to be seen to be actively addressing issues than trying to hide them away.
Other brands have realised that social media offers a clear route directly into large numbers of their target markets. It is not just the pure volume of users on social media but how they use the sites and how they are willing to interact with brands that attract financial services. Sites such as Twitter, Facebook and LinkedIn are still finding new ways to provide relevance to brands in this sector. Access to data, targeted advertising, corporate profiles and sponsored posts are all being used to varying degrees of success.
Rewards for good behaviour
The financial service brands that have embraced user generated content and social media have found some added benefits. By consistently providing timely and valuable information they have cemented a loyal group of followers, increased sales, demonstrated their expertise and thought leadership, got ahead of the competition and enhanced their profile in the eyes of the press. Journalists from national publications to trade specific publications use social media now as part of their hunt for stories, opinions and sources. For this reason, and to avoid damaging their brand it is essential that financial service brands proceed with caution, understand the technology and always behave with grace, politeness and a cheery complexion.
To do this requires a clearly defined strategy, realistic objectives, a well trained resource and continual monitoring of activity. This will ensure a return on investment is achieved but even then this will not happen overnight. Digital marketing requires prolonged engagement with the whole range of stakeholders and eventually the rewards will come.