Social meets financial:

How customer conversations drive

acquisition, retention, and innovation
 When financial institutions capture the authentic voice of the customer, it helps
them acquire new customers or members more efficiently, gain loyalty of existing
customers, and head off shopping events. Feedback data gives them the customer
insights they need to innovate precisely where their customers want it most, optimize
their messaging in the marketplace, and enhance their customer service.
State of the union for financial institutions
Product innovation in the finance industry is elusive. Financial
services have become commoditized, each with the same
features and functions. Among the few key differentiators are
rates and fees – causing a price war that’s driving down what
firms can charge due to competition and regulatory pressure.
Meanwhile, the latest financial crises and very public cases
of corporate malfeasance give rise to a crisis in consumer
trust when it comes to financial institutions. Marketing and
advertising falls on increasingly deaf ears; firms have lost
the right to drive the conversation.
Due to these factors, client acquisition costs are at an all-time
high, and it can take years before a financial service provider
1 Social meets financial: How customer conversations drive acquisition, retention, and innovation
is “in the black” after acquiring a new client. One popular
strategy among institutions in combatting this cost is to
dramatically increase their product portfolio to capture a
bigger share of their customers’ wallets and increase lifetime
value; insurer State Farm, for example, has added savings
and checking accounts to its portfolio.
Financial service providers recognize a chance to reconnect
with customers and regain some of that lost trust through the
latest social and technology tools. What technologies (and
providers) are here to stay, and which are passing fads?
Which can have a measurable impact on the business? And
which can be managed within compliance standards of the
highly-regulated industry?
 Regain consumer trust through authentic customer feedback

Consumers trust people like them – real customers who’ve “Social tools allow us to better
used a product or service – nearly 12 times more than
information from the brand or service provider.1 This is understand member needs so that
especially true in financial services, where consumers have we can stay engaged with our
lost confidence in the integrity of providers. Only 50% of
members. This ultimately results
people trust banks or other financial services firms.2 And
51% of consumers say their confidence in the banking in strengthened relationships
industry decreased in 2012.3 between each member and USAA.
The only way for financial firms to gain back consumer trust As we improve upon these
is to invite customer feedback – 92% of consumers trust this relationships, members will tell
earned media over all other forms of advertising.4 In fact,
consumers rate “listens to customer needs and feedback”
even more of their friends and family
as the most important attribute for financial services in about how much they trust USAA –
building trust.5 Displaying customers’ opinions, good and continuing our history of growth
bad, builds a positive brand image of transparency and
customer centricity. via word-of-mouth.”
- Tom Vaughn, former Director of Social Media, USAA
USAA boasts extremely satisfied customers for a financial
services provider, with an average member rating of 4.4 Sander Nubé, Social Media Manager of Netherlands
out of five stars and a Net Promoter Score of 87.6 The firm financial firm ABN AMRO, likewise cites increased trust
opened up the brand site to feedback from its members as one benefit to openly displaying client feedback:7
(current and former military members and their families), in
part to continue building their trust – trust which members “Giving customers the ability to see what others think
then evangelize to other prospective members, says Tom about ABN AMRO’s products demonstrates transparency,
Vaughn, former USAA Director of Social Media: builds trust, and acts as a catalyst for new business.”

2 Social meets financial: How customer conversations drive acquisition, retention, and innovation
 Acquire new clients by letting customers’ words do the selling
Consumers’ trust in each other’s opinions makes customer
reviews the ultimate selling tool for financial service providers.
Thirty percent of consumers would choose a financial
institution based on the recommendation of a trusted
acquaintance. For online banks in particular, 40% of
customers under 30 based their bank selection in part on
a recommendation from someone they know.8 To connect
tax software shoppers with opinions they trust, Intuit TurboTax
asked them to sign in with Facebook or Twitter, then gathered
all reviews from people in the shopper’s network.9
But opinions needn’t be from people consumers know to
influence decisions. Strangers’ reviews help consumers find
the right financial products and provider for their needs,
and buy confidently. Among all financial service buyers in
one study, 38% read product reviews online while making
their decision – and all of them reported being influenced by
those reviews.10 In fact, over half of consumers ages 18-35 trust
opinions of strangers online over those of friends and family.
And 29% of them would never buy insurance or sign up for
a credit card without first reading opinions from current or
past customers of the institution.11
Many firms are already reaping these acquisition benefits. ABN
3 Social meets financial: How customer conversations drive acquisition, retention, and innovation
AMRO saw a 40% conversion increase after implementing
reviews.7 Auto-insurer Nationwide found that site visitors
who read reviews are 40% more likely to start the quote
application, and 19% more likely to complete it.12 And
LendingTree finds that site visitors who engage with reviews
start the loan process 83% more often.13 Tom O’Neill,
Director of Site Innovation for LendingTree, attributes this
uptick to consumers’ increased assurance in the firm:
“Ratings and reviews have added
context and confidence to our
process – and that’s clearly having
a positive impact on conversion.
It’s awesome to see this initial trend.”
- Tom O’Neill, Director of Site Innovation, LendingTree
Customer feedback also adds credibility to marketing
campaigns, increasing ad effectiveness. USAA found
that banner ads with review content resulted in a 32-fold
increase in acquisition compared to ads without reviews.14
They now include member opinions in online and offline
marketing, including direct mail and radio spots.
 Create dialogue with customers to increase retention and lifetime value
Opening up to customer feedback also shows current
customers that a financial institution cares about their
experience – and will work to keep their business. Customers’
shared firsthand experiences create an engaged community
that boosts customer loyalty and lifetime value. By analyzing
customers’ behavior during the year after submitting a review,
USAA found that positive reviews correlate with $108 in
average incremental revenue per customer per year.15
Financial products are complex and frequently suffer from
adverse selection – meaning customers choose the wrong
product for their needs, leading to lower customer satisfaction
and, ultimately, higher churn rates. Q&A communities let
consumers ask specific questions to clarify which products
are right for them, through answers from other consumers
and firm reps. Fidelity Investments, Nationwide, and USAA
all host these types of communities on their sites.
Credit card provider Discover seeks to better understand
cardmembers, their credit card needs, and how they use
their Discover products through feedback – ultimately, to
form deeper, lasting relationships with members, says Kelly
Tufts, vice president of Cardmember Acquisition:
“These customers’ feedback is helping
us live our brand promise: Being a
trusted partner to cardmembers.” 16
- Kelly Tufts, VP Cardmember Acquisition, Discover
4 Social meets financial: How customer conversations drive acquisition, retention, and innovation
Discover now targets reviewers with specific marketing
campaigns based on a previously unavailable dimension:
sentiment. Reviewers posting high ratings will be targeted
with a “refer a friend” email, while cardmembers who leave
low-rated feedback receive a customer service contact –
proactively managing customer satisfaction and retention.
Financial institutions can also deepen relationships with
customers by tying the brand to emotional passion points
in the customer’s financial journey. While financial products
are largely commoditized, each customer’s individual story
of their relationship to the provider is unique. A new married
couple’s story of financing their first home, a student’s tale of
becoming the first college graduate in their family thanks to
a loan, a retiree’s account of his trip around the world made
possible by accrual of points and rewards – these stories
humanize a financial firm and its products, and associate
the brand with those emotional moments, both for the
customer writing the story, and for other consumers who
read them. American Express, Capital One, Nationwide,
and PNC Bank all invite these stories on their site, and some
amplify them on their site, social profiles, mobile apps,
and marketing.
 Customer input helps drive innovation
New technologies are disrupting financial services in every
area. Mobile banking reportedly shows a compound annual
growth rate of 28%, from five billion annual transactions in
2010 to 10.5 billion by the end of 2013.17 Mobile payment
options like Isis mobile wallet threaten other payment services.
Opportunities for financial institutions are everywhere –
the challenge for firms is knowing which to pursue.
Trends in customer input reveal exactly what customers
want from their financial service provider – seeding new
innovation. This is in part why ABN AMRO added reviews
in the first place, says Nubé:
“We want to become a part of people’s
financial lives, to both educate them
on financial matters and to learn from
them about what they need and want
from us.”
- Sander Nubé, Manager, ABN AMRO
Customers who’ve been with their financial service provider
for 20+ years contribute more feedback than any other group:
32% of all reviews. Contributors who have been customers
for 10+ years write about 30% more content than first-year
customers.18 The longer submissions may indicate that they
consider the financial firm a partner, and want to help
improve products and services.
Financial service providers that pull insights from feedback
5 Social meets financial: How customer conversations drive acquisition, retention, and innovation
data in real time can prove demand for a new innovation
(removing some risk pre-development) and drive innovation
as quickly as customers demand it. USAA’s Vaughn says the
firm added new services based on member feedback:
“Our financial services department saw [in reviews that]
there was desire for members to service their CDs online.
Based on the direct feedback from our members, a new
online functionality was put in place and members can
now change their renewal options online.” 6
Feedback also reveals ways to improve existing products
and thus increase customer satisfaction. Analyzing four-star
reviews, in particular, uncovers ideas for improvement, as
reviewers often reveal the one thing that keeps the product
from being five stars. Ninety-two percent of Discover reviews
are rated three stars or higher,16 but cardmembers still
provide the brand with constructive advice, says Sanjay
Gosalia, Director of Online Cardmember Acquisition:
“Cardmembers will write to say they love their card, and
it’d be even better if we’d add this feature or that benefit.”
Avanza Bank in Sweden goes one step further by literally
asking customers for their improvement suggestions in the
bank’s online crowdsourcing lab. Other customers vote for
their favorite ideas, and the most popular ideas reach the
C-suite to be considered for implementation.8
In short, financial institutions are using what works best for
top retailers to attract and retain clients. The main difference
for these types of establishments involves compliance.
 Partner with Bazaarvoice to assure compliance from the start
Fears around compliance and over-regulation have stagnated
the financial services industry’s forays into social. For the
first-moving firms that now have embraced customer
conversation, getting initial buy-in at the C-level was a major
challenge. Many finally realized that the trend toward
transparency and dialogue is a permanent change in the
industry; the evident risks to not participating outweigh
the potential risk of joining in, says Sue McManus, VP of
Direct and Customer Solutions Marketing for Nationwide:
“Our executives realized the time had
come to stop watching and start doing.”19
- Sue McManus, VP Direct and Customer Solutions
Marketing, Nationwide
Still, recognizing the need to become open and knowing
how to do it are different things. That’s where a vendor
with excellent moderation and grasp of industry regulations
can ease all fears, says USAA’s Vaughn: “For USAA, and
any financial services organization, the two main challenges
lie in letting go of brand and messaging control and ensuring
proper regulatory compliance. So convincing the early
stakeholders of the value of encouraging authentic
conversations – both positive and negative – is the first
step. No matter how excited we may get about the power
of social media and communities, we will not sustain any
program if we cannot figure out how to follow the regulations.
Bazaarvoice’s content moderation and reporting capabilities
helped us create a strategy that satisfies all the necessary
compliance and reporting requirements, as well as helping
key stakeholders understand the value. In fact, our legal
partners trust the processes in place with Bazaarvoice so
much, their first question – literally – for any proposed social
project is, ‘Is this using the Bazaarvoice platform?’ If the
answer is no, the project has a much harder time getting
6 Social meets financial: How customer conversations drive acquisition, retention, and innovation
started, and often goes back to the drawing board to figure
out how to take advantage of the existing compliance
procedures with Bazaarvoice.”
Bazaarvoice has a team of moderators specially trained
for highly-regulated industries. They undergo a focused
six-week training and audit process before being certified
to moderate content for financial services clients. Our team
identifies content with potential implications for compliance
and tags all such content for follow-up, routing it to the
appropriate team within the business – customer service
issues to the customer service department, legal issues to
the legal department, and potential compliance issues to
the compliance officer.
We work with some of the world’s largest brands, including
leading financial institutions in retail and online banking,
property and casualty insurance, life insurance, brokerages
and capital markets, and personal financial services firms,
including USAA, Charles Schwab, American Express,
Nationwide, Fidelity Investments, and more.
All of these institutions have exceedingly high compliance
standards as they must comply with a litany of federal and
state regulatory agencies including but not limited to:
FINRA, SEC, CFPB, OCC, Federal Reserve, FDIC, NCUA,
SLC, PRA, OMB, TILA/Reg Z, TISA/Reg DD, ECOA/Reg B,
EOL, Fair Housing Act, EHOA, RESPA, FDCPA, UDAAP, FTC,
EFTA, UCC, Reg CC, BSA/AML, CRA, GLBA, CAN-SPAM,
TCPA, COPPA, FCRA, and Reg E. All customer content
belongs to the financial institution, giving the firm complete
control over what is shared and how.
Contact Bazaarvoice today to find out how digital
word-of-mouth programs can help drive sales, grow
customer loyalty, and create a truly connected customer
experience while adhering to rigorous compliance standards.
 Sources

1. EXPO survey of US mom internet users. eMarketer. 2010.

http://nuancedmedia.com/how-important-are-online-customer-reviews/

2. Edelman. “Trust Barometer 2013.” http://www.edelman.com/trust-downloads/global-results-2/

3. Ernst & Young. “Global Consumer Banking Survey 2012.”

http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/Global-consumer-banking-
survey-2012--Foster-greater-loyalty-and-satisfaction

4. Nielsen. “Global Trust in Advertising Survey.” April 2012.

http://www.nielsen.com/us/en/press-room/2012/nielsen-global-consumers-trust-in-earned-advertising-grows.html

5. Edelman. “Trust Barometer 2012.”

http://www.slideshare.net/EdelmanInsights/2012-edelman-trust-barometer-global-deck

6. Meehan, Meghan. “Forrester features USAA as social media innovator.” Bazaarvoice. May 2010.
http://blog.bazaarvoice.com/2010/05/13/forrester-features-usaa-as-social-media-innovator/

7. Bazaarvoice. “ABN AMRO engages with customers to build transparency and trust.”
http://www.bazaarvoice.com/industries/abn-amro-case-study.html

8. Greenleigh, Ian. “How banks can place people at the center of the online experience.” Bazaarvoice. August 2011.
http://blog.bazaarvoice.com/2011/08/15/how-banks-can-place-people-at-the-center-of-the-online-experience/

9. Wasserman, Todd. “Intuit Program Combines Reviews, Social Networking.” Adweek. February 2010.
http://www.adweek.com/news/advertising-branding/intuit-program-combines-reviews-social-networking-107044

10. Think Finance and Google. “Valuable Connections: Reaching the Right Customer – Segment, Experiment, and Optimize.”
November 2011. http://services.google.com/fh/files/misc/ThinkFinance_ZMOT_111511.pdf

11. Bazaarvoice and Kelton Research. “Talking to Strangers: Millennials Trust People over Brands.” January 2012.
http://bazaarvoiceblog.com/2012/01/24/infographic-millennials-will-change-the-way-you-sell/

12. Bazaarvoice and Nationwide data.

13. Bazaarvoice. “LendingTree’s review-engaged visitors start the loan process 83% more often.”
http://www.bazaarvoice.com/industries/lendingtree-case-study.html

14. DeMarco, Tara. “Revisiting the cliché, ‘the customer is always right.’” Bazaarvoice. May 2011.
http://bazaarvoiceblog.com/2011/05/16/revisiting-the-cliche-the-customer-is-always-right/

15. Bazaarvoice and USAA data.

16. Meehan, Meghan. “Customer feedback helps Discover live their brand promise.” Bazaarvoice. August 2011.
http://blog.bazaarvoice.com/2011/08/03/customer-feedback-helps-discover-live-their-brand-promise/

17. Malo, Jason. “Mobile Devices Present an Opportunity for a More Secure Channel.” CEB TowerGroup Retail Banking. August 2012.
https://retailbanking.tg.executiveboard.com/Members/ResearchAndTools/Abstract.aspx (Link requires login)

18. Bazaarvoice. “The Conversation Index, Volume 2.” 2011.

http://media2.bazaarvoice.com/documents/Conversation_Index_Bazaarvoice_20111010_online2.pdf

19. Meehan, Meghan. “Nationwide’s strategy for facing the fear of UGC & overcoming internal objections to Social Commerce.”
Bazaarvoice. February 2010. http://bazaarvoiceblog.com/2010/02/15/nationwides-strategy-for-facing-the-fear-of-ugc-
overcoming-internal-objections-to-social-commerce/

© Bazaarvoice, 2013

7 Social meets financial: How customer conversations drive acquisition, retention, and innovation