Sailing past the social media minefields: proven ways that banks have used social media successfully to gather intelligence, drive engagement and generate sales.

• Author: Ladouceur, Ronald

The social media explosion could not have happened at a worse time for the U.S. financial service industry--as it coincided with an almost unprecedented drop in personal wealth and the related backlash against a never-seen-before federal bailout.

In this environment, social media has proved to be a hot wire. A few of the country's largest financial institutions were badly burned when they too quickly slapped up a Face-book page, hoping it might "humanize" their brands. In many cases, the tactic turned out to be the media equivalent of posting a picture of one's backside on a dartboard and inviting the world to take aim.

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This challenging environment has left many bank marketers confused and understandably a bit gun-shy about social marketing. A common reaction has been to pull down, pull back and dream of the day when social media will just go away.

But social media is not going to go away.

The power of well-constructed social strategies to gather intelligence, drive engagement and generate sales is simply too great. Add to this the growing expectation by consumers that their brands offer a social interface, and it is not too much of a stretch to conclude that institutions that continue to avoid social marketing are courting irrelevance.

So, is it possible to map the minefield and plot a safe path to bright social marketing future?

Happily, the answer is yes. True, the last year and a half was a mad scientist's laboratory of social media experimentation. But upon sober review, the seemingly anarchic social marketing efforts of 2009 and 2010 resolve themselves into a surprisingly short list of possible solutions. Further, an important rule-of-thumb has emerged that should help bank marketers better understand which strategies will work for them and get their institutions moving in a modern direction.

The shortlist of six

Social marketing strategies for financial service institutions can be organized into the following six categories.

1. Brand engagement forums. These are defined as any general "open for comment" forums dedicated to the brand and its products in general. These forums are built to facilitate a freewheeling conversation between a brand and its customers, partners and prospects.

2. News Feeds. These are "closed to comment" one-way communication streams created by closing down the feedback options of social platforms.

3. Sponsorships. These are forums built or funded by the brand, but not directly managed.

4. ...