12 months ago there was a report in this magazine of a presentation I gave to the Young Actuaries Program on why actuaries should care about social media. 12 months is a long time in the digital world and we have seen some interesting developments in the social media landscape. In just one year, between 2012 and 2013, the total global social media audience increased by an estimated 18 per cent, from 1.47 billion to 1.73 billion.
The purpose of this article is not to provide a ‘How to’ piece. There are plenty of them out there. This article is to show you why social media is much more than “Look what I had for breakfast”, why you should take notice of social media, and to whet your appetite to learn more.
There is no great mystery or magic about social media – it just brings us new ways to be social. Humans are social beings so it is no wonder we embrace new ways to communicate and connect so enthusiastically.
There are two dimensions to social media that an actuary should consider: personal and business. For the individual, social media is about networking, collaborating, learning, sharing… and having fun. The main thing to remember is that social media is about relationships and, as in real life, relationships take time and effort. The best way to get more out of social media is to make it about conversations.
For businesses, social media has applications both internally and externally. Corporate social media platforms such as Yammer are facilitating internal collaboration and helping to break down silos in some of the biggest companies. Many businesses use social media very successfully to attract and retain staff.
It is important to have a social media strategy that is integrated in the overall corporate strategy. Not having a social media strategy is a strategy, just not a very good one. As with any strategy, it starts with defining objectives – what are you trying to achieve. This applies to the company and also to individuals.
The most obvious uses of social media by business are branding and advertising. Even if you do not have a presence or voice on social media, your customers and potential customers will. Many people use social media to let the world know about bad consumer experiences. Social media gives the consumer enormous power. You cannot limit this but you can harness this.
Many businesses are developing social media for customer service and whilst there are many compliance and regulatory issues in the financial services industry, it is happening there as well. The only way to do this effectively is to be monitoring social media activity that mentions your brands. If you’re not convinced of the importance of this, check out Service Rage and see what people are saying.
Here are a few examples of superannuation funds using Twitter for customer service.
Many companies are learning to actively listen to social media, collect social data and insights, and act upon these. At least two of Australia’s big banks have social media command centres to learn, in real-time, what their customers are saying about their products and services – with the overarching intention of improving existing offerings and co-creating new ones as a lever for customer engagement, retention and acquisition.
“Listen, Connect, Share and Engage – 4 ways to be successful on social media.” – Jeff Pulver, Chairman Zula
CBA is tracking every single on-line conversation about the Bank in real-time and responding to it, answering requests and talking to customers. It recently revealed that it has made nearly $1 million in revenue by intercepting potential customers’ life events on Twitter.
NAB is using its social media command centre to help acquire, retain and develop millions of dollars worth of business, and is proving to be particularly attractive for winning business banking customers.
All this social media data can be very valuable to insurance companies for both underwriting and claims management. Consider a recent case of a woman in Florida who told her car insurer that a hit-and-run had damaged her car. The woman then told her friends on Facebook that her daughter had caused the accident. The insurer’s investigators searched social media, found the post, declined the claim and the woman was convicted of filing a fraudulent claim. Yes, a disturbing story in many ways but a sign of things to come.
Another application of social media data analysis is in the field of investing. An extreme example is the so-called ‘Hash Crash’ in April 2013. Someone hacked Associated Press’ Twitter account and published a tweet suggesting that the White House had been hit by explosions.
The Associated Press tweet…
Both Thomson Reuters and Bloomberg have started incorporating sentiment analysis obtained from social media data in their analysis of companies believing that arbitrage opportunities exist in scrapping data from tweeter conversations about health and the future of companies.
Social media is not risk free. The Associated Press example shows that it is important to realise that social media amplifies in both desirable and undesirable ways. In December 2013, Natwest suffered a couple of computer fails in a short period and customers used social media to vent their anger, often with considerable wit.
There are a number of examples of companies trying to use social media for a marketing campaign only to see it hijacked. When JPMorgan asked customers to tweet questions to the Vice Chairman they didn’t expect this…
Don’t let these examples put you off. Rather, they are reminders why businesses need to have a social media strategy and understand how to use it.
Social media is here to stay. We all need to understand its uses and misuses as individuals and businesses. Deloitte’s 2013 Globalisation Survey of 423 global executives found that 61 per cent of these executives expect social media to become much more or somewhat more important to their company over the next three years.
I’ll leave you with the words of Giam Swiegers, our CEO at Deloitte Australia: “You won’t be able to be an effective leader in the future if you don’t know how to use social media.”
“Social is not a place for a hard sell, it’s a place to build trust and credibility.”– Julio Viskovich, Author of Social Selling: How to find Buying Signals on Social Media.
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