Social media has become a cornerstone of everyday life over the last few decades, with 72 percent of Americans using social media today, a dramatic increase from the mere 5 percent that Pew Research Center first tracked in 2005. Corporate entities have gained larger footprints on platforms as MySpace, Friendster and LiveJournal gave way to Facebook, Twitter and YouTube, enabling them to connect with customers and market their services.
Social media is also useful for credit unions, providing them with cost-effective ways to establish online presences, recruit new members and gain insight into their needs. Their members’ engagement can also provide them with actionable, quantitative feedback about their successes.
How credit unions leverage social media
A recent study from the American Banking Association (ABA) found that Facebook was the most widely used social media platform among FIs, with nearly 97 percent of the 430 surveyed banks engaging with customers on the platform. LinkedIn followed at 76 percent and Twitter came next at 59 percent. Less than half of those surveyed utilize Instagram or YouTube.
FIs are relatively new to social media, with only 40 percent having used these platforms for more than five years. What they lack in experience they make up for in enthusiasm, however: 87 percent are considered somewhat or very active on social media, and only 13 percent do not have active social media presences.
“Ten years ago, there was a lot of hesitation about engaging on social channels,” Denyette DePierro, the ABA’s regulatory counsel, said. “[But they are] becoming very sophisticated users [and] very open to having social media presences. They’re engaging sometimes with very formal, financial education … content, and sometimes [with] almost silly [content, like] contests, giveaways, videos of staff and mascots having their own Facebook pages.”
The CU with the largest social media presence is Navy Federal Credit Union (NFCU), which has more than 1.1 million Facebook likes and nearly 80,000 Twitter followers. This top spot is appropriate for the United States’ biggest CU, with 8.6 million members and $106.1 billion in assets. The CU largely uses patriotic and military-themed content in its social media posts, as it exclusively caters to service members, Department of Defense employees and their families.
Another CU effectively leveraging its social media presence is Coast Capital Savings Federal Credit Union, Canada’s largest CU with 543,000 members and $20.1 billion in assets. Its social media approach is much different from NFCU’s — it instead uses pictures of its staff and members to cultivate a friendly, community-focused image.
The benefits of social media engagement
A Yes Marketing study found that 43 percent of respondents chose their FIs based on the family or friend recommendations and that 53 avoided certain FIs due to negative feedback from their peers. It is critical that CUs foster positive engagement online if they want to attract new members, as a huge portion of interaction in the modern age occurs on social media networks.
One approach CUs take to cultivate their reputations is through employee advocacy — encouraging employees to do word-of-mouth marketing on their personal social media profiles. Research has shown that these posts have 561 percent more reach than those the brand shares. In addition, 70 percent of adults online trust recommendations from friends and family, versus 15 percent who trust brands’ posts.
Social media engagement is easily trackable compared to other forms of marketing like word of mouth. There is no way to measure exactly how many people saw billboards or newspaper advertisements, but online ads and social media analytics can track exactly how many users saw or clicked on posts, and which new users resulted from which engagements.
Social media can be quite useful for CUs, but it is important to recognize its limitations. It is quite easy for social media ads to cross over from useful to irritating, with one study finding that 36 percent of U.S. consumers were annoyed by targeted social media ads.
CUs also need to be cognizant of the strict regulations regarding social media communications. The Financial Industry Regulatory Authority oversees all banks’ and CUs’ electronic communications, and in 2017 it issued $8.3 million worth of fines for 44 cases of electronic communications misuse. It is particularly important to note that employee advocacy posts are subject to the same regulations, so CUs should have firm guidelines in place to prevent fines.
There is no upper limit to social media’s revenue and engagement potential as long as potential side-effects are kept in mind. These platforms remain effective and powerful tools that CUs can use to connect and interact with their members.