The Era of Ratocracy

Tell us if you’ve engaged with any of the following:

• “Liking” on Facebook?
• Giving or checking feedback on Yelp or TripAdvisor?
• Checking a vendor on Angie’s List?
• Consulting Consumer Reports before
• a purchase?
• Using Kelly Blue Books or Edmonds
• to assist in auto buying or selling?
• Writing or reading a review on Amazon.com?
• Looking up a hospital or healthcare provider rating online through LeapFrog or Medicare.gov?
• Checking your reputation through Reputation.com?
• Getting updated on a corporate product/service scandal at Consumerist.com?
• Or possibly you’re quite advanced and engaged with the Whuffie Bank, the now defunct non-profit that aimed to launch a currency based on reputation?

Open Online Rating Systems

We’ve entered the era of “ratocracy” when anyone and everything is being rated online—transparent to anyone who wishes to search it out. Want to know the patient survey results of your local hospital? Find it on Medicare.gov. Want to check your car dealer’s service satisfaction ratings? Find it on Dealerrater.com.

Les just checked feedback on “Yelp” for all his CU clients—wow, they were all there from large to small. One CU with whom he had declined further business had an employee weighing in with the following: “Some of the upper management is not very smart—they micro-manage with outdated experience and interpretation.” They obviously did not recommend this CU as a place to work. Is this happening to your credit union?

This new world of social technology (social media is only a small part of the whole) is changing consumer behavior. For you, it could be good or bad.

One berserko review can taint your reputation if you can’t or don’t respond. This is why all the Fortune 500 companies have someone specifically dedicated to tracking social media reviews and comments regarding their services and products. What have they had to deal with? Online disgust caused the mighty Walmart to withdraw a kids “naughty leopard” Halloween costume. Disney was forced to respond to its “Merida” makeover. Just recently Subway was forced to stop using azodicarbonamide to bleach its bread after a 50,000-person online petition.

Social media has become particularly good at expressing feelings of isolated rage, which can soon turn into collective rage. There’s even online advice about “How to Be Outraged on the Internet”. But that’s not the point. The point is you can’t hide. Transparency is a new currency. You should be proactively managing your online reputation.

Consumers are Hungry

If you are not following your mentions online and leveraging the power of “ratocracy,” you better! Think about these statistics for just a minute (via http://tinyurl.com/lfp4hcc):

• Over 60 percent of Americans are using social media.
• Almost 70 percent of people turn to family and friends for advice when making purchasing decisions.
• 84 percent of shoppers look to reviews prior to making a purchase decision.
• 26 percent of consumers have used social media to air a grievance.
• 75 percent of business-to-business customers rely on word-of-mouth including social media.
• Customer-contributed content is nearly 12 times more trusted than brand-created descriptions.

Social media activity and online reviews are big contributors to creating new members and member advocates. Historically, credit unions have thrived and grown through word of mouth as a No. 1 contributor to point of entry. In today’s world of social media and Google searching, online advocacy is a critical tool making word of mouth more powerful than ever. How are you stoking the fires of online advocacy for your credit union?

Your Keys to Social Media

We all know that we must claim our social media space. But are you doing it? How are you doing it? Make sure you aren’t engaged in a lackadaisical operation and are moving to this space in a strategic manner. As credit unions, our story plays well online. We urge you to start leveraging Facebook, Twitter, YouTube and other social media channels. Are you also looking at Google+ and Instagram to tell your story? 

Credit unions are about people helping people. It’s about providing an authentic alternative in the financial services market. It’s about our tie to our members and our community. There is nothing more genuine than that, and it’s this type of honesty, care and heart that drive economic goodwill through the social media channel by humanizing our business.

There are a few keys when it comes to producing social media content for your credit union. Take a page out of Gary Vaynerchuk’s playbook, The Thank You Economy, and relate it to your credit union:

1. Humanize the business: It’s all about heart! Care about your members, your community, your employees, your brand and what you stand for.
2. Build trust, grow your tribe and nurture your community: Build your followers and advocates. Start with the holy trinity: Facebook, Twitter, YouTube and move on from there (Google+, Instagram). Make sure you are measuring your success. (See how The Financial Brand ranks CUs on social media.)
3. Create shock and awe! Develop content and promos that get people talking about things they care about like Elevations CU’s Funding the Extraordinary contest to give away $10,000 to help support projects by extraordinary people and businesses in the community. 
4. Coordinate with your traditional media marketing: Orchestrate a strategic dance between your traditional and social media efforts to extend all your conversations and campaigns while using all marketing channels at your disposal.
5. Ensure long-term relationships: Social media should not be treated as ad hoc marketing and should help support your core values and business foundation. Building lifetime member advocates will become the true ROI of social media.

Follow Yourself Online

So now that you’ve tackled social media, how do you navigate this new world of “ratocracy” and manage what the world is saying about your CU? We would urge you to get real with your social media and online monitoring. There are a lot of tools that will help you listen to what your members, competitors, critics and supporters are saying about you.

Tools like BackTweets and Crimson Hexagon help you track what people are saying about you in real time. TweetDeck and Hootsuite are free platforms that will help you manage campaigns and content while tracking mentions, people and keywords. Hootsuite can also help track negative reviews on other sites, including Yelp () and more via a plugin called Reputology.

Make sure you have a problem resolution process to turn that negative member experience into member advocacy.

At Elevations CU, our social media process begins with gathering content and constructing a content calendar. We then begin posting to networks and engage/respond through continuous online monitoring. If we see a negative online response, we respond immediately or escalate through our retail channel depending on the issue. Either way, we are having personal conversations with the member to ensure we solve the inquiry/issue and maintain member loyalty. 

Content, Content, Content

Be proactive in the production of your social media content. Content can range from events and seminars, to SEG updates and promotions, marketing campaigns and promotions, and other relatable CU/community content.

Organize your calendar, gain stakeholder input—there are lots of great things happening in your CU (did the CU or an employee win an award?)—post to your networks and engage in the conversation.

Integrating member reviews on your website is another step in the right direction. USAA, top in our category for member loyalty, has been doing this for a while now. It has found it can boost sales and build loyalty by integrating its own customer product reviews on its website.

Having these member conversations on your website can also help your search engine optimization and drive traffic. Member conversations use similar trigger words used by people for search queries. Search engines love straight-from-the-consumer content and reward sites that feature it with elevated search rankings.

Having member reviews alongside brand-created content allows consumers to fully educate themselves and make their decision easier and quicker. It also helps your organization learn what members want and where they may be looking for innovation.

Accelerate With Caution

So the good news is, we’ve got a great story to tell and if we build it strategically, we can make great gains. The flip side of the coin is that there are always pitfalls when rushing into a new medium.

Don’t use social media exclusively to put out fires. Don’t use social media merely to brag, put out press releases or sell exclusively. Finally, don’t expect immediate results. It’s a marathon, not a sprint.

In the end, make sure you are monitoring what people are saying about you and make sure you have the resources in place to engage in that conversation and help resolve issues when they arise. Always do so by being genuine! Stay on brand—credit unions have a great story to tell. Help people find the right solutions for their financial lives (people helping people!), beware of selling (differentiate!), and use the power of many to tell and sell your story.

Les Wallace, Ph.D. is president of Signature Resources Inc. and a frequent consultant to credit unions on governance, leadership and strategy. CUES member Todd Kern is chief marketing officer for $1.4 billion Elevations Credit Union, Boulder, Colo.