What Wealth Managers Can Learn from Fashion Chains and Coffee Shops
Nov. 29, 2010
Banks and wealth managers are just starting to conquer social media (many banks and wealth managers have not even started yet), The recent MyPrivateBanking report on Wealth Management and Social Media looked for great examples of how to exploit social media in different ways. And it is in consumer goods where one finds interesting examples of how to leverage Facebook or other social media.
H&M: Gathering important, timely customer feedback via Facebook and other social media
H&M is one of the world’s biggest fashion retailers. It’s based in Sweden and has outlets in 37 countries. It’s essential for the company to get quick feedback on customer needs and fashion trends worldwide. Social media, and in this case Facebook, have proved themselves as an ideal tool for gathering this data in a way that’s both entertaining and voluntary.
This type of market feedback is no substitute for statistically valid quantitative market research but it gives real-time feedback on customers’ thoughts and preferences. It’s amazing that every poll question is answered within days by more than 10,000 users together with hundreds of comments, some of them weird, some just mindless babble but a lot also generating much valid qualitative insight into the customer mind.
In addition, to regularly posting questions on Facebook to gather fast feedback, H&M has a Facebook discussion board with thousands of posts under different topics. On its website the company features a social media room with links and preview of several external fashion blogs that comment on H&M fashion and gather feedback via their reader comments. Overall, H&M has installed a sophisticated and powerful customer-feedback engine that helps them to thrive in the fast changing-world of fashion. This may seem far away from the conservative world of banking and wealth management – but change is accelerating there, too, especially in relation to the needs and preferences of the clients.
Starbucks: How Facebook makes customers visit a Starbucks coffee shop
Starbucks is probably the strongest commercial brand on Facebook. More than 16 million people have indicated that they “like this” – an unsurpassed number for a commercial Facebook presence. Starbucks uses this social media network to motivate people to come to a Starbucks branch and order its products. It is most important for Starbucks to connect the virtual world and the physical branches by means of social media in order to drive sales. So, Facebook becomes not just another branding tool but a revenue generator.
A good example is the fall 2010 campaign “Pumpkin Spice Latte Celebration”.
The goal of the campaign is to promote a specialty product linked to Halloween and fall themes in general, the “Pumpkin Spice Latte”, featuring “nutmeg, cinnamon and clove layered in rich espresso and fresh steamed milk”. On the Facebook page there is a video with a barrista showing how the latte is made in an entertaining video, The user can then go to a subpage and indicate that he or she is joining the celebrations. It’s also possible to invite somebody else to the party.
New generation of wealthy clients will expect from wealth managers to use social media
On first sight wealth managers might dismiss these examples as too far fetched. But social media can be valuable tools to test and solicit feedbacks on new product offerings or market strategies. The Starbucks example shows how a firm can leverage social media to motivate potential and existing clients to join, for instance, charity events or other social activities. There is no doubt that the new generation of wealthy and affluent individuals is expecting from their wealth managers to use social media to keep in touch and engage them.