Posted by Ron Shevlin, Senior Analyst, Aite Group
Unless you live under a rock (which might not be such a bad idea these days), you can’t help but be exposed to the constant barrage of hype about Twitter. Inevitably, when a new communications-oriented technology comes along, early adopters and evangelists extol its virtues as a tool for reaching – and in this case, servicing – customers and prospects. There’s (seemingly) no end to the number of gushing blog posts congratulating Bank of America and Wells Fargo for handling service requests through Twitter.
Should your credit union follow suit? My answer is NO – at least, not for now. To make my case, let’s do some math. I’d like to share with you the results of research my firm, Aite Group, recently conducted with the Participatory Marketing Network, which has yet to be published. Marketers generally segment US consumers into four age-based generations: Gen Yers, Gen Xers, Boomers, and Sen… uh, Pre-Boomers. Aite Group and the PMN surveyed Gen Yers to learn more about their social media and financial services attitudes and behaviors. On to the math: Assume for a moment that your CU’s member base is equally distributed across the generations (this is, of course, a wildly unrealistic expectation, since you’d probably give your right arm to have 25 percent of your member base come from the Gen Y community). Next, here’s the first data point from our research: Just 22 percent of Gen Yers currently use Twitter. Could this percentage go up? Of course, but since this group is the most avid users of technology, and many see Twitter as something “older” consumers use, it’s anyone’s guess how high this percentage will go, and how fast. And by the way, of those Gen Yers that do use Twitter, 85 percent follow their friends, 54 percent follow celebrities, and just 29 percent follow companies (which, by the way, include credit unions). More importantly – as far as I’m concerned – is Gen Yers’ response to another question asked in the survey. Of those Gen Yers that use Twitter, just 9 percent said that they’d have no problem sending service-related tweets to the financial institutions with which they do business. Granted, 24 percent said they might do this, but would need more information about how it work. But 65 percent said they wouldn’t use Twitter for service because it’s either not the right channel or they don’t trust their FI to reliably handle the tweet. Shall we put our math equation together now? 25 percent of members from Gen Y times 22 percent who use Twitter times 9 percent who would use Twitter for service = ONE-HALF OF ONE PERCENT of your member base that you will be creating a Twitter-based service capability for. If your CU has 50,000 members, that’s roughly 250 members. Now I realize that the Twitterati will counter this argument by telling me that I’m wrong, it’s about the future, about attracting Gen Yers, about establishing a brand image of being innovative, etc. And those aren’t bad counterarguments. But they all fail to address the question that any good credit union executive should be asking here: What are the other alternatives available to the CU to “attract Gen Yers”, “establish a brand image”, etc.? In other words, could the same objectives be achieved by offering a personal financial management capability online, like Delta Community CU and Stanford FCU are doing with Wesabe and Geezeo? Or is there another department or function within the credit union that could better use someone’s skills instead of having them focus on Twitter? And let’s really think through the Twitter service process: Will service tweets have to be re-entered into the CU’s service or CRM apps? If a member calls the CU or walks into a branch, will other CU personnel have the ability to see what was tweeted? One blogger writes: “Think about how text banking works. I text bal to MYCUBAL or whatever and 10 or 20 seconds goes by and my balance comes back. Why don’t we do the same thing with Twitter? Log into online banking and link your Twitter username to your online banking account.” No security issues or concerns there, eh? For now, Twitter is like a yo-yo. They both go up and down, they’re fun to play with, but if you’re not careful, you can get hurt. If you want to know how Twitter can hurt, ask the people whose Twitter IDs have been hijacked and have seen vile and disgusting tweets go out under their name. If your CU’s goal is to attract and retain Gen Yers, providing service through Twitter is not going to be very helpful. I did the math.
