These days almost each and every company, whichever industry segment they might belong to, tries to leverage the power of social media. Australian banks are no exception. While researching on my present marketing group project, I found that the 'Big Four' Australian banks have set up Facebook and Twitter accounts and encourage customers to interact with them through these accounts. Not just that, some of the banks have dedicated employees handling these accounts.
But, there's one Indian bank which provides a clear-cut example of how social media can help salvage a company's reputation and bring it back from the brink of disaster. ICICI Bank, the largest private bank in India, was facing a serious turmoil during the global financial crisis two years back. There were serious rumours circulating in the air about the bank's exposure to US subprime mortgages and that the bank was close to going bust. Consumer forums on the web were rife with complaints about the bank's services, especially credit cards. Customers were panicking, closing down accounts and moving to other banks. The stock price crashed by 20% in a single day. All seemed to be lost for ICICI.
Then the bank started a concerted effort to fix the problem with a major focus on social media. Twitter and Facebook accounts were set to address all possible complaints (the twitter account emphasized the fact that the 'bank cares'). The website of the company urged the customers to engage with the bank on social media and post their complaints, opinions and suggestions there. The company management recognized the power of the online platform and acted accordingly. And, slowly but steadily, the bank recovered.
On analyzing ICICI's social media strategy closely, it becomes clear that the bank realized that it can't afford to lose existing customers, especially the high-value ones. So, in a way this was a defensive marketing strategy, in the face of adversity, aimed at maintaining their existing customer base. Profit potential from typical upper middle class customers was high and the key was to address their issues to encourage high loyalty towards ICICI's products. In effect, the objective was to turn these customers into 'true friends' instead of 'butterflies' (high profit potential but low loyalty). The following are ways in which the bank managed to become 'true friends' with customers in the next couple of years:
- Keep up communication links but don't overmarket - Social media marketing was a potent way to achieve this. The bank engaged with customers and addressed their problems without aggressively marketing it's products on social media.
- Ensure that value is communicated both ways - Customers understood that the bank cares about them. Successful social media marketing helped the bank earn the trust of customers.
- Nurture and defend these - The relationship has been strengthened over the last two years with multiple Facebook and Twitter accounts for different bank services. Customers continue to engage with the bank through these accounts.
- Focus on both attitudinal and behavioural loyalty - That the social media campaign was able to promote loyalty (both attitudinal and behavioural) is evident from the bank's healthy revenue, profit and share price growth. Complaints remain but the bank focuses on an efficient grievance redressal mechanism, especially through the social media.
This is just an evidence of the power and reach of social media. It's not just banks in India and Australia but businesses all over the world are realizing this. And, this makes the business of buying and selling so much more interesting.
But, there's one Indian bank which provides a clear-cut example of how social media can help salvage a company's reputation and bring it back from the brink of disaster. ICICI Bank, the largest private bank in India, was facing a serious turmoil during the global financial crisis two years back. There were serious rumours circulating in the air about the bank's exposure to US subprime mortgages and that the bank was close to going bust. Consumer forums on the web were rife with complaints about the bank's services, especially credit cards. Customers were panicking, closing down accounts and moving to other banks. The stock price crashed by 20% in a single day. All seemed to be lost for ICICI.
Then the bank started a concerted effort to fix the problem with a major focus on social media. Twitter and Facebook accounts were set to address all possible complaints (the twitter account emphasized the fact that the 'bank cares'). The website of the company urged the customers to engage with the bank on social media and post their complaints, opinions and suggestions there. The company management recognized the power of the online platform and acted accordingly. And, slowly but steadily, the bank recovered.
On analyzing ICICI's social media strategy closely, it becomes clear that the bank realized that it can't afford to lose existing customers, especially the high-value ones. So, in a way this was a defensive marketing strategy, in the face of adversity, aimed at maintaining their existing customer base. Profit potential from typical upper middle class customers was high and the key was to address their issues to encourage high loyalty towards ICICI's products. In effect, the objective was to turn these customers into 'true friends' instead of 'butterflies' (high profit potential but low loyalty). The following are ways in which the bank managed to become 'true friends' with customers in the next couple of years:
- Keep up communication links but don't overmarket - Social media marketing was a potent way to achieve this. The bank engaged with customers and addressed their problems without aggressively marketing it's products on social media.
- Ensure that value is communicated both ways - Customers understood that the bank cares about them. Successful social media marketing helped the bank earn the trust of customers.
- Nurture and defend these - The relationship has been strengthened over the last two years with multiple Facebook and Twitter accounts for different bank services. Customers continue to engage with the bank through these accounts.
- Focus on both attitudinal and behavioural loyalty - That the social media campaign was able to promote loyalty (both attitudinal and behavioural) is evident from the bank's healthy revenue, profit and share price growth. Complaints remain but the bank focuses on an efficient grievance redressal mechanism, especially through the social media.
This is just an evidence of the power and reach of social media. It's not just banks in India and Australia but businesses all over the world are realizing this. And, this makes the business of buying and selling so much more interesting.
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