Twice in the past few weeks, I've written blog posts that had one or more criticisms about specific experiences with a bank's product. My complaints weren't Huff Post calls to arms or anything particularly serious, just small things that had gone wrong (previous posts here and here). And our blog, while well-read in the banking industry, is just a rounding error in terms of mainstream readership.  

But in both these examples, the bank reached out to me almost immediately, offering to help solve the problem. In one case, I received a phone call (several actually) from the bank's PR department and the other bank left a message on our home phone (note 1) from the "executive office." 

My take: I am shocked to have heard not once, but twice in the same month from mega-banks looking to solve small, albeit public, customer-service issues. In 15 years of covering the industry, including three with a public blog, I have never had a single "official" call from a bank about a problem I've written about (note 2).

Businesses have long debated how to handle negative conversations in social media (see note 3). Do you stay on the sidelines, anonymously participate in the conversation, or reach out with offers to help?

Clearly, offering to help is the way to go. However, you must choose your words carefully because everything you say can and will be used against you by a blogger bent on revenge or ridicule.

But I can tell you now from experience that it's powerful to be contacted by the business you've written about. My reaction goes something like this:

• "Uh oh, now I've offended a reader; I'd better think twice about posting negative comments again." At the very least, I'll certainly make sure my coverage is extremely balanced in the future. No potshots, that's for sure.
• "Wow, this bank really cares about its customers and reputation." That makes me feel much better about them.
• "Seriously, a big bank that calls its customers when it hears about a problem; impressive as hell!"

So going forward:

• I'm more likely to look for something good to say about the bank to make up for the negative item. 
• I may post an update to the original entry, or even an entire post like this, complimenting the bank on reaching out to resolve the problem.
• I'll probably tell my friends the story, either privately, or more publicly via Twitter, Facebook, etc.

These are pretty good results from a relatively low-cost phone call. Sure, my problems were fairly simple and easily resolved, and it may be harder to appease a blogger whose home was recently foreclosed. But why not try? As long as you stay calm and try to keep things constructive, there's very little downside and a lot of upside.

So congratulations Citibank and Capital One, your performance has been truly remarkable. (Are we good now?) 

Note:
1. The bank must have looked at our actual account info to get the home phone number.
2. I have received the occasional email from a subscriber, but no proactive effort to provide help.
3. For a wonderful overview of the ins and outs of responding to bloggers, read the two-part post (here and here) from Vancity's MVP and third-ranked innovator on the planet, William Azaroff. 

Fair Isaac's popular forum (powered by Lithium; screenshot below) which supports its myFICO retail credit score/report unit, took first prize among 16 entrants in the Business-to-Consumer Supporting category in the recent Forrester Groundswell awards (winners list).

The Groundswell awards are based on business results using various social technologies. In total there are 16 categories.

The myFICO forum is currently receiving:

• 120,000 unique visitors in Sep 2009, up almost three-fold from a year ago (see chart below)
• 20,000 new posts added each month...with more than 500,000 posts archived
• 400,000 searches per month
• 10,000 new registered users per month

According to information supplied with the application, the forum is helping Fair Isaac in the following ways:

• Lowering call-center volumes: Total call center volume was down 1% in 2008 compared to a 23% gain the prior year.
• Reducing call-center talk time: 10% of callers are referred to the forum for more information and/or help from other users.
• Driving traffic: Traffic to myFICO.com from the forum equals about 40% of the volume from search engines.
• Improving sales: The average amount spent by a customer grows by two-thirds after they join the forum and 13% of all myFICO sales online involve a forum view.

While myFICO was the only financial services winner, Bank of America was one of four finalists among 23 entries in the B2C Talking category for its Morris on Campus student-banking campaign as was MasterCard Brazil for What's Priceless to You? 

Significance to Netbankers: myFICO's busy forum shows that despite the proliferation of blogs and social media, an old-school online forum is a good way to build a community and off-load the tech support burden. Of course, forums don't run themselves, and you'll spend a considerable time moderating them. But considering the alternative, it's an expense worth considering, especially if community-building is part of your strategic goals. Intuit has also had great success with its community forums, attracting 130,000 monthly unique users (see chart below).

myFICO forums (link, 29 Oct 2009)

Website traffic for myFICO and Intuit forums from Compete (link, 29 Oct 2009)

For more info:

• Online Banking Report: Credit Report Monitoring (Aug 2007)
• Online Banking Report: Bank 2.0 (blogs and social media, Oct 2006)

We just uploaded our latest Online Banking Report.
It will be mailed to subscribers next week. It's also available online here. There's no charge for current subscribers; others may access it immediately
for US$595.

---------------------------------------------------------

Connecting to Customers with Twitter
The comprehensive guide to Twitter for financial institutions

84 pages (published 25 May 2009)

Twitter is everywhere these days (note 1). Those who use it think it's the best thing since the invention of email. Those who don't, think it's just another Internet fad, enjoying its 15 minutes of fame before flaming out with only a Wikipedia entry to remember it by. 

The reality: No one knows exactly how it will play out, but it's something likely in between those two extremes.   

We are not surprised Twitter has taken off as a social connector. It's a lot like other extremely popular communication methods: email, texting, and instant messaging. The rise of MySpace, Facebook and other social networks has paved the way.

However, what's surprising is that Twitter is actually a surprisingly effective, and extremely cost-effective, way for companies to engage online with customers and prospects (see Wachovia example in the inset).

Numbering more than 200 in the United States alone, there are already more financial institutions using Twitter than any other so-called social network. Most have started in the last month or two (see previous coverage). 

In this report (abstract), guest author Jeffry Pilcher (note 2), a branding and marketing guru who recently launched his own brand consultancy, ICONiQ, tells you exactly what you should and shouldn't do with Twitter. He was an early adopter of the tool, and an expert on harnessing its power.

The report includes:

• An overview of Twitter terminology and how the service works
• Advice on how to develop a successful Twitter strategy and
  avoid common pitfalls
• Explanations and examples of the different ways
  financial institutions are using Twitter 
• A step-by-step guide on how to implement a Twitter strategy
  and navigate the "Twittersphere," including explanations of
  how to create and customize a Twitter profile and presence

Notes:
1. USA Today even had a story on the front of the Money section two weeks ago, entitled, "Banks try social networking, jump on Twitter wagon"

2. Jeffry Pilcher blogs at The Financial Brand and frequently tweets here. He maintains a comprehensive listing of banks and credit unions on Twitter here.

If you haven't been following Twitter the last few months, you may not realize it now has almost eight million monthly unique visitors according to Compete. That's almost double the traffic it had just two months ago and a nearly a nine-fold gain from a year ago.

To put that traffic in perspective, it's more than half that of the NY Times and slightly more than banking giant Wachovia (see Compete chart below).

Banking activity
Financial institutions are pretty new to the micro-blogging platform. In a search today, we found 15 U.S. banks and 22 credit unions with active Twitter feeds (see notes 1, 6-8). There were also and nine international banks for a total of 46.

See the table below for the non-inclusive list ranked by number of Twitter users that follow the bank's feed (note 2). Wachovia (now owned by Wells Fargo), the only major bank that has promoted Twitter on its main website, leads with 2,000 followers (see previous post on Wachovia's foray on to Twitter).

Opportunity 
Participating in Twitter is a low-cost entry into social media that can actually help save a customer relationship or three. Compared to blogging, it is much less labor intensive. It's also less of a marketing platform given the 140-character limit in posts. But in the current environment, perhaps less truly is more. By all means, find a gung-ho Facebook devotee in your bank and let him or her get you into the Tweeting game.

Table: Banks and Credit Unions using Twitter (updated 16 March 2009)

Source: Online Banking Report, 13 March 2009 (see notes 6,7,8)

Notes:
1. To be considered active, the bank or credit union had to have set up a Twitter account, customized it with its logo, have made more than 1 update or "Tweet," and have at least 10 followers. 
2. This is not a complete list. With a few exceptions, we only looked for financial institutions with "bank" or "credit union" in their name.
3. Wells Fargo's Twitter page says it will be launching soon.
4. Twitter URL = www.twitter.com/<shown below>
5. For more on bank blogging, see our Online Banking Report on Banking 2.0
6. List and totals updated with ING Direct and First Federal on 16 March 2009
7. Searched on "CU" and found eight more credit unions on 17 March 2009. Thanks Gabriel Garcia.
8. Added NAB's Ubank from comments, unsure why it didn't show up on "bank" search

SmartyPig, which launched its social savings program in March 2008 (previous post) and debuted at Finovate Startup (video here), hit the world stage Dec. 16.

The company, operating out of world headquarters in Des Moines, Iowa, partnered with ANZ Bank to launch SmartyPig in Australia. ANZ was able to lay claim to being the first to offer social savings down under (see note 1).

The site is nearly identical to the stateside version, but ANZ has a smidgen more branding (see screenshot below). Also note the new emphasis on being 100% free, a benefit echoed on the U.S. site as well.

However, unlike U.S. partner and part owner, West Bank (note 2), which has the SmartyPig logo plastered all over its site (see screenshot below), the ANZ site has no mention of the product, it even draws a blank using ANZ site search.

Social savings metrics from SmartyPig
Because SmartyPig's sole emphasis is on goal-based savings, its results provide unique insights into the market. While the company has not released account totals, its partner, West Bank disclosed that total deposit in the program amounted to $5.6 million at the end of Q3.

While that's less than $1 million per month since launch, since many accounts start very small, it could be a healthy number of accounts. And with the requirement of automated savings additions, the growth potential is excellent. Assuming a $1,000 average account balance (note 3), the company would have attracted more than 5,000 total accounts during its first six months.

After the initial launch spike, site traffic has been steadily increasing to 25,000 monthly visitors in December (see chart below).

SmartyPig has made available information on the savings goals made by users. The data is through Oct. 2008 (except total deposit amount) and includes only the totals from the U.S. site. 

Total amount on deposit (30 Sep 2008, per West Bank 10Q): $5.6 million

Primary account holder by age*:

18-25 >>> 30%
26-35 >>> 37%
36-45 >>> 20%
46+ >>>>> 13%

*By law, primary account holders must be 18 or over,
so children’s goals are owned by their parents

Average goal amount across all holders on the following dates:

April 1 >>>  $3,900
May 1 >>>> $7,300
June 1 >>> $7,400
July 1 >>>> $7,400
Aug 1 >>>> $7,900
Sep 1 >>>> $7,700
Oct 1 >>>> $8,600

Goal amount by category:

Travel >>>>>>>>>>>>> 21%  (Avg = $4,400)
Holiday spending >>> 12%   (Avg = $900)
Electronics >>>>>>>> 10%    (Avg = $2,500)
Home improvement >> 6%  (Avg = $12,900)
Unspecified >>>>>>>>> 5%   (Avg =  $9,800)
Weddings >>>>>>>>>>> 5%   (Avg = $7,900)
House down payment or addition >>> 4%  (Avg = $22,200)
Emergency fund >>>>> 3%   (Avg = $6,600)
Babies >>>>>>>>>>>>>> 3%   (Avg = $5,100)
Home furnishings >>>> 2%   (Avg = $3,500)
Car or car expenses >> 2%   (Avg = $6,800)
College >>>>>>>>>>>>> 1%   (Avg = $9,700)
Other >>>>>>>>>>>>>> 26%  (Avg $10,700)

Average projected time until goal met based on savings rate: Just over 4 years

SmartyPig ANZ Version (13 Jan 2009)

USA partner West Bank's homepage (14 Jan 2009)

Traffic chart from Compete (14 Jan 2009)

Notes:
1. See our most recent Online Banking Report: Growing Deposits in the Digital Age, for more info on social savings, along with 16 other strategies.

2. Des Moines, Iowa-based West Bank owns 18% of SmartyPig according to its 30 June 2008 SEC filing.

3. My guess, not a number that has been disclosed.

Taking a page from Wells Fargo's playbook, Wachovia has ventured into social media, giving Twitter a try (see screenshot below and previous Twitter coverage here). The bank has sent 94 updates (aka Tweets) via its Twitter page since it began Aug. 18 and has amassed 340 followers.

But more importantly, they are leveraging the minimal customer-support expense to support Twitter (see note 1) with a nifty badge on its Contact Us page (see inset and screenshot below). That little bit of online marketing, demonstrating the Web-savviness of the banking colossus, is probably worth 1000x whatever goodwill they earn actually talking to customers via Twitter.

Analysis
I'll admit, I was expecting the usual corporate marketing-speak. But Wachovia is actually using the medium very well. So far, the bank has provided a realistic mix of low-key promotional items such as the following "Ike update" with real customer service response (see second example below).

Example 1 (earlier today): Promotional Tweet today mentioning the bank's Hurricane Ike response with link to more info, e.g., <tinyurl.com/4vbbyn>: 

Example 2 (this morning): Responding to a customer complaint: 

This last message is directed back to a customer who posted a complaint about Wachovia in his public Twitter stream. Wachovia could have sent it privately, but they elected to respond publicly.

This is surprisingly bold, considering that the bank risks elevating the issue. For example, anyone following Wachovia's updates can click on bastille71's username and see that she is upset about a $250 overdraft charge. It's unlikely anyone outside bastille71's friends would have known about that had Wachovia not responded publicly via Twitter.

But anyone who really believes in social media will argue that the bank has far more to gain by demonstrating real commitment to solving customer problems.

Looking further at the above example, bastille71 (inset) has 135 followers on Twitter, her own blog, and who knows how many friends on Facebook. What are the chances that if Wachovia ends up refunding her $250, bastille71 (aka Miss Rehobeth) will write it up in her blog, Twitter it, and even talk about it with her co-workers and friends? 

And if you need more ROI than that, Wachovia has already received a good payback on its Twitter investment (note 1) with a nearly full-page article in American Banker last week during an otherwise not-so-positive news cycle for banks. In addition, the customer service innovation made several blogs and of course the bank's been Twittered about in a positive way.

Note:
1. There's no real cost to using Twitter other than staffing it with a social-media-savvy customer-service rep and someone in marketing/PR to look over his or her shoulders. 

Earlier this week, Visa launched its Facebook Business Network. While the first to use Facebook, several other major financial institutions have opened small biz networks on the Web in the past six months:

• Advanta's Ideablob launched last September at DEMOfall (previous post here). It's a unique website with monthly contests awarding $10,000 to the best idea, as voted on by users. It's an intriguing concept with decent traction, almost 30,000 unique visitors last month according to Compete (see chart below). (Full disclosure: I just realized I'm wearing an Ideablob t-shirt; schwag can still pay off!)
  
• American Express's OpenForum: As the name suggests, it's a business forum and resource directory, not unlike Bank of America's (see below). American Express has added posts from several prominent bloggers such as John Battelle's Searchblog and Anita Campbell's Small Biz Trends to keep the site fresh. The site has 5,400 members and monthly traffic of about 11,000 unique visitors, up threefold from a year ago.  
  
• Bank of America's Small Business Online Community, a general forum and resource directory, launched in October 2007 (see original post here). It's primarily a forum, with some additional articles on the side. Total membership is just under 15,000.
  
• Capital One's Slingshot, launched in February, is primarily a business directory. But it does aim for community involvement with user-submitted business reviews and comments on certain topics.
  
• HSBC's (UK) Business Network: Another forum-and-blog site similar to AmEx's OpenForum. So far it appears lightly used, with just six blog entries this year and 270 member profiles.
  
• Intuit's Quickbooks Group: Although not a financial institution, the Quickbooks site is a good example of an active community with more content, including ten blogs, and as much traffic as the others combined (not including BofA which is unknown) with nearly 90,000 unique visitors, almost double the number a year ago.
  

 Unique website visitors in May 2008 (source: Compete)

The latest research from our Online Banking Report division is now available. It's a double issue (#152/153) released today entitled:

Online Investing Communities: Will social networking revolutionize saving & investing?

We believe social networking will eventually play a large role in online investing, and evidently we are not alone. We found 54 companies involved in investment-information exchange and only six of those have monthly traffic of 100,000 or more.

So, while we like the idea, it will take awhile to catch on. Only about 25% of the U.S. population owns individual stocks, and only a small subset of those make a trade every year. Furthermore, the prime social networking demographics, those younger than 35, are less likely to own or follow stocks. As a result, we project that it will be well into the next decade before adoption passes the 10% mark.

In preparing the report, we asked 400 U.S. online users their thoughts about the idea of sharing investment info in a social network setting setting such as Zecco Share or Motley Fool CAPS (see note 1). While there was a decent amount of interest from the under-30 group, 30% were somewhat or very interested, the overall enthusiasm for the idea among all U.S. adults (21+) was only 22%. See the full report for more research results and the resulting 10-year social investing forecast.

About the report
Subscribers may download the report here as part of their annual subscription plan. Others may purchase it here. The printed version will be mailed to subscribers later this week. 

For more information read the abstract here.

Note:
1. We asked U.S. online users for their opinions about social networking for investment information (fielded April 18-19, 2008, n = 401). The top-level results are including in the report. For more detail, All-Access subscribers may download a complete summary PDF document of all questions and answers or download an Excel file of the raw data. In addition, All-Access subscribers may use our online research tools to run their own cross-tabs and filters on the dataset. The dataset will be available next week through subscriber accounts at OnlineBankingReport.com.

One perk of working for a large company is being recognized, or winning prizes, for contributing useful suggestions. While employees can be pretty cynical about the whole process, overall, it's good for employee relations to solicit and reward suggestions. Employees appreciate the opportunity to voice their ideas to senior management and do their part in making the company/products better. And if they win a free dinner, it's all that much better. 

The same concept can work even better with customers where you don't have to worry about favoritism and corporate politics. But how do you solicit meaningful suggestions without getting bogged down in an expensive and time-consuming evaluation process? And more important, how do you prevent the really innovative ides from getting killed in the marketing/customer service/IT department, where the not-invented-here bias rules?

Interactive suggestion box from Starbucks
Amidst a sweeping round of innovations announced at its annual shareholders meeting today (see note 1; press release here), Starbucks provided a glimpse of the future of customer feedback with its MyStarbucksIdea, a user-generated discussion forum revolving around product and service suggestions (see screenshot below).

By involving users every step of the way, the system helps remove the inherent bias that plagues most company-run programs. The key is allowing registered users the power to vote on each idea, the best rise DIGG-like to the top, where other customers, along with the Starbucks top-brass, are likely to see them. Other than light moderating of the forum, Starbucks only has to process the very best ideas.

To provide the all-important company feedback to the community, the Starbucks site (note 2) has an area that will showcase the ideas that are actually implemented. The site says there are no monetary rewards, but I would expect that wining ideas will receive some small token of the company's appreciation such as a $50 Starbucks card or t-shirt. You don't want the incentives to be too high, or the system will be gamed and its appeal damaged. 

The most popular idea at Starbucks has to do with providing discounts...no surprise there. But the company has wisely introduced a dozen idea categories to help spur discussion in other areas. For instance, in "Other Product" section (second screenshot below), I found two that I voted for: microwave ovens to re-heat coffee and providing small stickers to keep the coffee from sloshing out the drinking hole while driving.

Implications for financial institutions
I believe that every financial institutions should have some type of suggestion program even if it's just an email address (suggestions@yourbank.com). And I think the open Starbucks approach could work very well. However, if there are no ground rules, most banks and credit unions will be innundated with "ideas" to lower fees, raise savings rates, and so on. As much as you don't want to stifle discussion, you may have to restrict or even forbid suggestions about pricing. Most people will understand that your pricing decisions are not made via the consensus of a public user forum no matter how many votes "interest-free loans" receive. 

To help spur ideas outside the usual complaints, create a list of categories such as online banking, wire transfers, checking accounts, branches, and so on to generate ideas for your different product lines.

MyStarbucksIdea homepage (19 March 2008)

Top ideas in "Other Products" category

Notes:

1. Starbucks also announced a set of rewards for users of its prepaid card including free premium drink upgrades such as soy milk, free beverages with the purchase of coffee beans, and the big one for the WiFi set, 2 hours of free Internet access with a purchase.

2. Interestingly, Starbucks new app is built on the Force.com platform from SalesForce.com.

Four months ago (here) I wrote about how easy it was to set up a company page in Facebook. Even a total novice like myself could create one in a few minutes.

There hasn't exactly been a rush to do it, but approximately 50 financial institutions have posted a free company page on Facebook (see note 1). Although, most are simple "white page" listings with no more than logo, address, phone number and URL, it's still better than nothing.
(Update Mar 7: Please note, I am talking only about Facebook "pages" here. There are several banking "groups," notably Chase +1 with nearly 50,000 members, that are far more active. Also, some FI pages , such as TD Money Lounge and RBC Bankbook, do not show up in my search using "bank" and "credit union." Consider these counts approximations. )

Credit unions have three times as many as banks. Credit union's can often move faster because of their size and culture. Here's the count by financial institution type:

• 10 North American banks
• 32 North American credit unions
• 8 banks outside North America

The only banks with more than a handful of fans are Jordan's Arab Bank with 145 and HSBC Bank Egypt with 89. Silicon Valley's Valley Credit Union (screenshot below) leads in the U.S. with 45 fans.

There's also one bank branch that's taken the initiative to post a Facebook page. U.S. Bank's Beaver Valley, Ohio branch (here) is one of the few to have posted something interesting, a $100 Super Bowl contest. They've also posted their branch hours (see screenshot below). 

Note:

1. I counted financial institution pages by using Facebook's site search for "bank" and then for "credit union." To qualify the FI had to at least post the bank's logo and URL. There were also a few placeholder pages with no logo.

2. For more information on social media and online personal finance, see our Online Banking Report #144/145.

Ed Terpening, VP Social Media Marketing at Wells Fargo, invited me on a virtual tour of Stagecoach Island. SI is a  Second Life spinoff where users immerse themselves in a virtual world created by Wells Fargo (see previous coverage here).

Wells Fargo launched Stagecoach Island in 2006, originally within Second Life, and then spun it off on its own. It's a chance for Wells to give users a truly interactive experience with their brand and increase their relevance to Millenials, who may feel that banks don't understand them. 

They are doing some key things very well:

• Pioneering new ways to extend their brand using social media
• Reaching a youthful demographic most banks can't reach
• Harnessing new technologies to redefine marketing

Here are some screenshots from the tour:

We're all gathered at the Wells Fargo ATM near the entrace of Stagecoach Island, including fellow NetBanker blogger Ron Shevlin.

The ATM interface, where you can open an account, get a credit card or a mortgage.

The Stagecoach Island Career Center where interested job seekers can learn about virtual careers in SI.

A place to buy things for your SI avatar, using your virtual Wells Fargo credit card.

Yours truly on the slopes, ready to snowboard.

My Take

I believe that creating a virtual world that combines elements of fun and whimsy with financial education is a great way for a bank to start a conversation with tomorrow's bankers about the role of money and credit in their lives. Although Wells is currently doing many things well, I also noticed some opportunities for them to consider as SI evolves:

• The "fun" and "financial" elements didn't come together as much as I had hoped. It could be improved with an SI-wide games and challenges requiring users to acquire and spend money and use credit to solve puzzles and attain things they need to complete the game. 
• Currently, the ATM is very text heavy and somewhat non-intuitive. Wells is missing an opportunity to make the ATM into an amazing interactive experience. And, there could be ATMs throughout SI, which could be part of a larger game.
  
• It would be great to have real Wells Fargo job openings in the SI Career Center, like TD does in their Facebook group.
  

Also, where was the stagecoach? It had to be there somewhere, I probably just missed it.

In the end, Ed and his team deserve much credit for paving the way. There is great potential left in this idea, and it will be fascinating to see how it continues to evolve. Thanks for inviting me on the tour.

William Azaroff is the Interactive Marketing & Channel Manager at Vancity where he develops interactive marketing initiatives, and pioneered ChangeEverything.ca, the groundbreaking change-themed online community. William builds on a decade of experience at digital agencies in Vancouver, Seattle and Los Angeles driving strategy, extending brands to the Web and building relationships for companies in several verticals, including Honda, Disney, Intuit Canada and the Government of BC. He discusses trends and noteworthy achievements in social media at his blog: azaroff.com/blog.

I don't know how I missed this one, but Advanta, a major credit card issuer with 1.2 million small business customers, launched a new Web 2.0 microsite on Sept. 24 at the high-tech DEMOfall conference (press release here). Just being there amongst the digerati was a coup for the card issuer, but they did much better, managing to come home with a coveted DemoGod Peoples Choice trophy at the conference.

The Web 2.0-laden site is called ideablob, and it's a place where entrepreneurs, inventors, and anyone else can post their business idea and compete for the monthly $10,000 prizes (contest rules here).

One month after launch, the site is generating a fair amount of activity. The eight October finalists showcased on the homepage (see below) have received the following: 

• 691 total votes (must be registered to vote, can vote on more than one idea)
• 216 total comments (must be registered to comment)
• 10,300 total views (anyone can view the idea)

Traffic to the site should grow rapidly once word of the $10k prize circulates. That's a large incentive for the millions of Internet users who think they have a better idea. 

Advanta, which uses fairly subdued branding on the site (see small "inspired by Advanta" under the main ideablob logo), is positioned to gain in three ways:

• By associating its brand with innovation, social networks, and a Web 2.0 attitude
• Assuming a good viral kick, and $10k/mo should do it, the site could generate leads more cost effectively than through other channels
• Publicity in blogs and traditional media

Bank of America launched a good business networking site recently, but without the fun of the $10,000 in prize money (see previous coverage here).

Advanta's ideablob main page (25 Oct 2007)

An idea page

Here's a great slide from Mary Meeker's Web 2.0 Summit presentation (download at Morgan Stanley) showing the dominance of social networking sites. If you haven't been able to get management to buy off on your social media plans, circulate this slide.

These are the top 10 domains now compared to two years ago as measured by Alexa. The red sites on the left have dropped out of the top 10 giving way to the green sites. Web 2.0-oriented sites can now claim six of the top-10 slots, including four social networks: Facebook, Orkut (Google), Myspace and Hi5, and two user-generated sites:  YouTube and Wikipedia.    

Also according to Morgan Stanley, worldwide Internet use passed the 1 billion mark early last year, and is estimated to hit 1.3 billion this year. The chart also shows the distribution of Internet users by region. Note the dominance of the red part of the bar, and, no, that's not Republicans, it's Asia/Pacific.

Tomorrow, Wells Fargo is expected to launch a user-generated video contest that will place the winning entry into a 30-sec commercial that plays during January's Rose Bowl, with an audience of 35 million or more. The winner will be chosen by public voting on the contest website. Entries are due by Nov. 26.

Although, this type of contest has been done before including last year's Super Bowl (see previous coverage of Intuit's TaxRap here and Lending Club here), it's the first time a major U.S. bank has launched such a high-profile effort. It should provide Wells with excellent publicity while supporting its social media and branding efforts.

The whole effort is first class, from the Center Stage website, to the pre-taped audio tracks in various genres, and the contest rules and prizes. And while the sample video's are cute, don't listen to them at bedtime. Trust me, you don't want "The Wells Fargo Wagon" running through your head as you try to get to sleep. 

More banks and credit unions are planning to devote a part of their 2008 marketing budgets to social media experiments. If your executive team has bought into the reputation economy (see note 1) and is ready to commit money for a social media test, read on.

If you know you want to venture into this new arena, where do you spend your first dime to ensure successful community participation and executive support?

I wish I could say that you start with 'A', follow up with 'B', and then end at 'Z', but it isn't that straight-forward. Engaging people with social media is no different than engaging community in real life. Each of your banks and credit unions support the communities you serve in different ways such as supporting local charities through a race sponsorship or committing branch staff to help in community clean-up days.

You may be scratching your head, wondering where to allocate your first dime. My advice: begin in an area in which your company is already effectively engaging community. That way you'll have a good foundation for brainstorming, you'll find ample project volunteers from within your company, and in the end you'll produce an outcome with the greatest relevance to your financial institution.

For example: 

• If your FI is particularly adept at serving small businesses, launch a wiki for small business owners in your area to get advice and pool resources
  
• If your company sponsors a local charity, such as a cancer foundation, start a blog about your work with them
• If your bank is engaged in environmental initiatives, such as becoming carbon neutral, develop a Facebook app to help people identify and reduce their own ecological footprint

So long as your social media strategy supports existing real-world initiatives, you’ll almost hear a ‘click’ as your project finds a perfect fit with your company and the community.

Note:

1. Wired Magazine had an outstanding article on this a few months back.

William Azaroff is the Interactive Marketing & Channel Manager at Vancity where he develops interactive marketing initiatives, and pioneered ChangeEverything.ca, the groundbreaking change-themed online community. William builds on a decade of experience at digital agencies in Vancouver, Seattle and Los Angeles driving strategy, extending brands to the web and building relationships for companies in several verticals, including Honda, Disney, Intuit Canada and the Government of BC. He discusses trends and noteworthy achievements in social media at his blog: azaroff.com/blog.

Note: Read part 1 and part 2.

Many articles and blog posts will tell you that the cost to enter into the world of blogs, wikis, RSS, podcasts, social networking (Facebook or MySpace), social bookmarking (del.icio.us or ma.gnolia), or  Application Programming Interfaces (or APIs) mean that you can start a blog or social media project for your bank or credit union at a total cost of zero. Right?

Well, sort of.

One of the critical, but often unsung factors of success of a social media project is the resourcing. If you're going to invite the public to play, make sure you have someone who can help create the kind of community you want.

As we planned ChangeEverything.ca at Vancity we had many discussions about how to create a vibrant and postive community. We have all seen online bulletin boards, discussion forums and blogs degenerate into the kind of name-calling no one wants associated with their brand. This was one of our worst fears. Since then, we've learned a great deal about community building.

In my first part of this post, I mentioned nine success factors for a social media project. An important one is hiring someone who knows how to nurture and grow an online community. Here's why.

Whether or not hard dollars are spent launching a social media project, someone needs to manage the initiative and ensure that it achieves its goals. This is a very specific skill-set with the following requirements:

• Someone who can inspire visitors to come back, readers to register, and registered users to add good content.
  
• Someone who knows when to get involved in discussions and threads that are degenerating, going off topic, or just going nowhere.
  
• Someone who can elevate good material to the homepage so it will hook like-minded people, as well as delete remarks you don't want on the site.
  
• Someone with good taste.
  
• Someone who understands the business goals of the site and can act appropriately and decisively.

Recently I have seen a few interesting posts speaking to the issue of good online community moderation. One was on Jeremiah Owyang's excellent web-strategist.com: For the Community Managers. I also saw a very good piece on Seth Godin's blog: Jobs of the future, #1: Online Community Organizer. So it seems that more and more people are catching on that this free revolution has some resourcing costs built in if you want to achieve success.

Here are three examples of financial institutions that blog and how they manage their resourcing.

Wells Fargo

Wells Fargo has a total of four blogs, the most for any financial institution. According to their VP of Social Media, the amazing Ed Terpening:

Although we have an Experiential Marketing group dedicated to social media activities for Wells Fargo, all of our bloggers are team members who have other full time jobs. They add blogging - writing, posting, reading, replying - on top of those jobs, and our lead bloggers take a more active role than others. The culture of blogging is unique and we strive to connect with that culture through many different voices at Wells Fargo. Finding the person with the right passion + knowledge is our goal, whether they have a professional communications role or not (most do not).

Verity Credit Union



Verity was the first financial institutions to blog, beginning in late 2004. It recently received an excellent facelift and functional overhaul. It's a highly usable and readable blog. According to their CMO and VP Shari Storm, they staff their blog with volunteer employees from around the credit union. Employees who want to blog go through a quick 10-15 minute training on the dos and don'ts of blogging, and they are allowed to spend no more than an hour a month blogging so their managers won't get upset with the project. This is a nice way to save money on resources. Until their recent overhaul, their blog was even hosted for free at Blogger. Says Storm, "One of the unexpected successes of our blog is how much employees like writing for the forum. We’ve heard from employees that it provides extra job satisfaction and a sense of employee pride."

Vancity



One of the key success factors of ChangeEverything.ca was the investment in a full-time Online Community Moderator, Kate. Kate has been instrumental in nurturing the community, providing them with contests and activities, connecting the site to the press to get earned media exposure, moderating comments and understanding the needs and wants of the site's registered users. Not an easy job, and I always say that Kate is one of the key reasons why the site has grown and excelled in the way it has. She has an amazing balance of clearly knowing the purpose of the site, and also being open to where the community wants to go. She deserves amazing credit and her skillset will only make her more and more valuable. (NOTE: no poaching!)

So, by all means try out social media. There are many low-cost, even free, options. But realize  that for a site to achieve longevity and success as a communications vehicle, branding tool, community platform, or whatever you have planned, you may need to invest in social media management. This means either tapping good people internally to devote time to the project or hiring a community moderator to ensure your project develops to its full potential.

William Azaroff is the Interactive Marketing & Channel Manager at Vancity where he develops interactive marketing initiatives, and pioneered ChangeEverything.ca, the groundbreaking change-themed online community. William also plans strategy for the online channel, with a view to its potential to help Vancity, its members and the community. William brings nine years of experience in Vancouver, Seattle and Los Angeles producing web projects for such clients as Honda, Disney, Intuit Canada and Nike Jordan. He writes about the intersection of online branding, social media and the world of banking on his blog at azaroff.com/blog

While so many FIs are scratching their heads wondering what to do about Facebook, it turns out that TD Canada Trust, one of Canada's biggest banks and the ninth largest bank in North America, is doing all kinds of interesting initiatives there.

What makes their efforts so impressive is that they have clearly tried to figure out the value they add to the demographics of Facebook users. They have managed to strike a balance of being true to their brand, yet not seem like they're pandering to a youthful audience, and offering something of value to the Net Generation.

What first crossed my desk this week was SPLIT IT, an application they created that allows roommates who are on Facebook to manage how they split basic bills.

Welcome to the SPLIT IT by TD Canada Trust application – a no-hassle, budget-sharing tool that enables you to share bills with your roommates. SPLIT IT makes it easy to determine who owes what, view your balances, and keep on top of your payment dates.

The application launched within the past few days. When I first saw it on August 15 it had 44 users. It's grown to 66 a mere 24 hours later. It will be interesting to see where it goes during the  next few weeks. I'm also curious to see how it's promoted. Will TD send information to its youth customers, or will they rely solely on word of mouth?

After seeing SPLIT IT I was mightily impressed. It's not easy to find a way to add value for Facebook users. From SPLIT IT, I linked through to their Money Lounge, and I was floored. They have job postings, videos, offers, all sorts of ways to engage the Facebook audience. Scrolling down, I noticed that they have 1,480 members of their group. Even if many of the group's members are employees, it's still an impressive engagement metric.

So, well done TD Canada Trust! The first bank to build its own Facebook app.

William Azaroff is the interactive marketing & channel manager at Vancity where he develops interactive marketing initiatives, and pioneered ChangeEverything.ca, the groundbreaking change-themed online community. William also plans strategy for the online channel, with a view to its potential to help Vancity, its members and the community. William brings nine years of experience in Vancouver, Seattle and Los Angeles producing Web projects for such clients as Honda, Disney, Intuit Canada and Nike Jordan. He writes about the intersection of online branding, social media and the world of banking on his blog at azaroff.com/blog

Note: Part one of this series can be found here.

On blogs I visit discussing social media, one ongoing debate concerns metrics. Some claim that metrics for social media projects are not meaningful; some claim that new metrics must be developed to gauge social behaviour. Some even claim that metrics aren't needed.

I believe that it is essential to have meaningful key-performance indicators in place for a social media project, as you would for any other project. You must know what success will look like to know if the project is worth repeating or not. Some of these metrics are familiar Web metrics, some are more similar to offline advertising, some are similar to PR metrics, and some are indeed brand new and hard to measure.

For ChangeEverything.ca we measure a few things that are familiar to anyone who runs a website:

• Unique visitors
• Time on site
• Referring URLs
• Natural search results
• Number of registered users
• Number of active users (need to define for yourself)

We also measure "Web 2.0" stuff:

• Our Technorati authority ranking
• The number of RSS subscribers
• Conversions of visitors to contributors (people who make it through the registration or content-creation funnels)

Like offline media, we measure how many people in our geographic region are aware of the site, just like we track awareness of our television campaigns. We also measure how many can link it back to our brand.

Like our PR, we try to measure the earned media the site has garnered for us, which has been significant, with lots of positive coverage on TV, radio and newspapers. We also keep track of what bloggers say about us. We consider a blogger writing positively about ChangeEverything.ca to be an unsolicited third-party endorsement. Happily, almost all blog posts so far have been positive, as have our earned media. It's difficult to criticize this project since most press coverage is about how the site has helped the community in some way. And that leads us to the most interesting metric by far.

Where we need new metrics is on the issue of real-world impact. This was not a metric we had in place prior to launch—honestly, it never occurred to us. But it became necessary because of activities happening in the real world (remember that?) due to the influence of the site. The first time this became obvious was after a bad snowstorm Vancouver in November 2006. The site's amazing community moderator Kate created a post called Got Hats? and asked for people to donate warm clothing and blankets to the homeless. This initiative took off and over the next few days, we estimate that more than 4,000 pieces of clothing, blankets, pillows, and, yes, hats were donated to local shelters, all via communication and organization on the site. The change occurred while snow was still on the ground, while the need was still very real, and even a matter of life and death. It was the first clue that we were onto something truly important.

There are many positive traits the site lends to the Vancity brand. ChangeEverything.ca is more than a bunch of people discussing local issues they want to change. The site has created real impact in the communities Vancity serves. Since the Got Hats? episode, we have seen the impact of the tremendous exposure a woman on the site has received for blogging in depth about her valiant attempt to give up plastics in 2007, the successful implementation of a bike share experiment in Vancouver and now a contest where people can win $1,000 to give to an organization making change for the good (appropriately called ChangeSomething).

Traditional Web metrics can't measure the human terms of this impact, and that's the beauty of social media. It spills over into people's lives, because people are in the driver's seat. We need to expand our view of key performance indicators for social media so they reflect the project's success, which now includes the true impact of these projects on our communities.

I think that explains why those of us who advocate for the appropriate use of social media are so passionate about our work.

Many companies are entering the world of social media but don't really know what success looks like. They want to dabble with this new toolkit, but don't know how to manage expectations.

I believe these projects can be of tremendous value to our industry, which is based heavily on trust. Social media, when executed well, engenders great trust among the users and participants. Somewhere I came across the quote "trust is the killer app," and I like it a lot (I'd like to know who coined that phrase; if you know, please comment).

One year ago, the company I work for, Vancity, launched a social networking website called ChangeEverything.ca. This project is an open online community "for people in Vancouver, Victoria and the Lower Mainland who want to change themselves, their communities or their world." I must admit, one year ago we were fairly naive about what to expect. Now, just past our one-year anniversary, we consider the project a success due to several factors:

• The steady and impressive growth of the registered user base
• Site traffic peaking during times when relevant local issues are being discussed
• Tremendous media exposure in local print, radio and television
• Excellent response to the site from the blogging community (we consider good blog reviews to be unsolicited third-party endorsements)
• Real world impact (more on this in part 2 next week)

The site now acts as a community platform to explore issues of change in and around Vancity's market. It's a unique and wonderful position to be in, with this base of local changemakers associated with our brand.

Lessons from ChangeEverything 

Over the last year, we learned many lessons about what makes a good community project. They include:

1. The first 500 members set the tone
2. Create a set of Community Guidelines
3. Focus more on encouraging good content than eliminating content you're afraid of
4. Ensure you have good moderation capabilities
5. Have patience and persistence
6. Be genuine and authentic
7. Make it part of a campaign to trial
8. Identify your critical success metrics ahead of time
9. Hire an excellent community moderator

Let me explain each point:

1. Typically, in online communities the first 500 members set the tone and mood. If the first 500 people who register and use your forum are yelling, being rude and creating havoc, then those people you do want to participate won't feel welcome. The good news is, the opposite is also true. Handpick the first few users, ask them to pass along the URL to their peers. Start slow and feed the community well, with people who get what you're trying to achieve. By the time the masses get hold of it, the tone will be set and it'll be far easier to monitor and moderate. In fact, you may find that you don't have to moderate comments much at all, which is what we've found with ChangeEverything.ca.

2. Set proper expectations and then link to those guidelines from every place on the site where users can add their own content. It helps to write your guidelines in a very readable way - here are the guidelines for ChangeEverything.ca. Make them humourous and fun, which will make them easier to enforce.

3. Add features and functions that make people want to collaborate. It's too easy to get caught up in being a security guard and forget that you need to be a concierge first. The primary objective is to get people to contribute positively, not to stop people from contributing negatively. Admittedly, this is a hard one to follow through on.

4. Whatever software platform you use, make sure you can moderate content on and off the site easily. The amount of spam blogs get make this doubly essential.

5. Rome wasn't built in a day and communities don't flourish overnight. Keep finding interesting ways to let your initiative take root.

6. One of my absolute favorite quotes is "all social media projects are inherently authentic." The more I think about it, the truer it is. If companies play with social media for the right reason, they will have a greater chance of success.

7. If companies need a safe way to try out social media, they should make it part of a bigger campaign. The ROI (or sometimes lack thereof) is easier to justify to try something different and more innovative.

8. Metrics are crucial and part two of this post will explore the changing world of metrics for social media more fully.

9. Hire someone who knows how to nurture and grow an online community. I'll go into more depth on this topic in part three of this post.

Now for the kicker: In the year of running an online community, where registered users can immediately add comments, with no moderation before those comments go live, we have not had to remove a single comment due to inappropriate behavior. We're extremely proud of this fact, that we were able to build a thriving community focused on positive change. We have removed spam and gibberish, but no one has gone against our community guidelines and posted anything hateful or obscene. Gives me renewed faith in humanity.