How Social Media is Revolutionising Customer Relationships for Financial Services
By Chris Andrew, Managing Director – Europe at Hearsay Social
Technology and the Internet have changed the way people research and consume goods and services. The first wave of the digital era was largely about replacing human capital, including sales people, with self-service websites. The travel industry provides an example of this fundamental shift. Before the emergence of the digital era, consumers relied almost exclusively on travel agents to book flights and hotels. The Internet provided a new channel for consumers to purchase travel and dealt a major blow to the business model of travel agencies. In financial services, the likes of Etrade and TD Direct all but eliminated the need for low value-add stockbrokers who “just executed orders.” Many industries that offer highly commoditised goods and services suffered similar fates due to automation via the web.
However, for products and services that are more complicated, there is a strong desire for a focus on education and building a relationship with a trusted advisor. Examples are retirement planning, mortgage advisory, robust financial planning, and commercial insurance. To build long-term relationships during these complex sales, the expectations around expertise and customer knowledge are of paramount importance. Customer-centricity is more than a corporate buzzword – it’s an approach that starts with context and consideration for how an organisation’s employees interact and respond to individuals, and social media is changing this customer relationship irrevocably.
Instead of replacing human capital, the social media era is about enhancing human capital. But how is social media revolutionising customer relationships in the financial services industry? Here are three key benefits to what we refer to as ‘social selling’:
1. Establish credibility.
In financial services, the advisor or representative is often the key decision-maker for a consumer. This new breed of customer wants to be an active part of the decision-making process. Before walking into an office or picking up the phone, they do their own research. There is an implicit expectation that financial advisors should be discoverable online and should be opinion leaders in their field. A static web page isn’t enough these days, but a strong social media presence can provide dynamic information and the credibility that customers both want and need in the social era.
The best social salespeople build out their online presence by being authentic, easy to relate to and by sharing relevant experience via social profiles on LinkedIn, Facebook & Twitter. It would enhance credibility if an advisor that typically serves teachers is connected to a group of teachers online and actively participates in social groups that include teachers as members. Connecting to customers and participating in relevant LinkedIn groups is one example of providing personal credibility to target customers.
2. Deliver highly personalised service.
Delivering a personalised service is a key component of what differentiates one financial advisor from the next. In this new paradigm of connectedness, customers expect more from salespeople than they did previously. Today’s consumers expect their representatives to do their homework, and reach out with personalised messages at exactly the right time.
As it turns out, the type of information that people share on social networks can provide financial advisors with valuable context to reach out to customers when they are most in need of service.
For example, people are very unlikely to purchase life insurance when they are single. But, when they get married, or start a family, they realise they need to plan for the future. This is why social networks have become a treasure trove of data. Listening to social activity can lead to more effective conversations, thereby increasing sales productivity.
3. Build a long-term relationship. Like the salesperson, today’s customers are also doing their own research. With complex and expensive products to choose between, the research and buying period can be lengthy. Social media provides a channel for financial representatives to demonstrate expertise and ‘nurture’ prospects by passively providing relevant content. Sharing thought leadership and subject matter expertise in a low-touch manner can keep a representative front of mind, without the intrusiveness of a cold call, email or unwanted direct mail. A professional profile, along with the right content at the right time demonstrates expertise and knowledge of what it takes to build trust in a natural, social way. Successful sales people stay relevant by regularly sharing helpful tips and news about the topics that matter to their audience.
Chris Andrew is the Managing Director – Europe at Hearsay Social. He has a background in Product Management and spent 3 years helping to build Hearsay Social’s relationship-focused social sales product. Most recently he has taken on the opportunity to expand the company’s European activities, supporting both global and European customers as they establish and scale social sales programs. Hearsay Social is the leading enterprise social sales and marketing platform for Fortune 100 banks, insurance companies, and retail organizations including AXA, JPMorgan Chase, Goldman Sachs, Allstate, Northwestern Mutual, and Zurich Financial.
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