Innovations and Payment Systems

Credit card issuers dip a toe into social media


Credit card companies have made only tentative steps into the social media fray. But while you’re talking on sites such as Twitter, LinkedIn, and Facebook, they’re listening in — and planning their next steps.

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Microsoft founder Bill Gates posed a question on LinkedIn and garnered 3,500 responses. Dunkin’ Donuts has attracted more than 800,000 fans to its Facebook Fan page. And Dell offers deals and customer support through its primary Twitter page, which has collected nearly 700,000 followers.

Many big corporations are looking to make a splash in social media, but credit card companies have been markedly slower to the party. MasterCard‘s official Facebook page, for example, has picked up only 2,000 fans and has offered no new content since July 2008. The four American Express Twitter accounts have amassed fewer than 350 followers among them. (See related story: 24 hours of credit card tweets.)

Rapleaf CEO Auren Hoffman, whose company has helped credit card companies analyze the social media usage of their customer base, acknowledges that it’s been slow going. “Participating in social media … is not the forte of credit card companies thus far,” he says. “But some of them starting to wade into it slowly.”

Listening in on the conversation
You may not see card companies’ status updates popping up on your Facebook feed anytime soon, but know this: They’re looking closely at what sites you’re using, the friends you’re making and the opinions you’re sharing about their companies online.

Steve Furman, director of design, customer experience and social media for Discover, says his company began paying serious attention to social media sites in April 2008. Nonetheless, he says that Discover has “a pretty good listening capability built up.” According to Furman, the company uses tools that allow them to monitor more than 100 million blogs and other online sites and forums. “It quickly shows us anything that’s going on out there,” he says.

Rapleaf’s Hoffman, meanwhile, says that card companies he’s worked with are using social media as one more tool in their arsenal to determine what kind of offers will resonate and get people to sign up for a card. “Before, companies might have used [data] like ZIP codes, gender and credit history to come up with an offer,” he says. “Now, with social media, we’ve learned that what your friends have done — or not done — is quite important” in determining what you will do. “Companies that don’t use the data are potentially doing a big disservice to themselves.”

Even companies that are starting to use some of the conversational tools available on social media are doing much more listening than talking. Torrey Lincoln, director of West Coast advertising sales at LinkedIn, says that MasterCard, which already does traditional advertising on the small business pages of the site, will be rolling out some polls on the site to find out consumers’ opinions on a range of issues. “It’s a great way for these companies to ask a question, get extensive feedback and then analyze the audience and review those results,” he says.

It’s a start, to be sure, but it’s hardly the kind of conversation that many other companies are having with their customers.

Controlling the discussion
Why are many card companies dragging their feet? Initially, it seemed that credit card companies might be among the first companies to take the plunge with social media. In 2006, for example, Facebook and J.P. Morgan Chase created an exclusive partnership to promote Chase‘s credit cards. But less than three years later, the company is mostly out of the social media game. “Chase currently does not have any social media efforts of any significance,” acknowledges Paul Hartwick, a spokesman for the company. “We may in the future,” he adds.

Other card companies have made efforts to connect as well — but on terms distinctly their own. Last June, Visa launched a $2 million campaign for its Visa Business Network on Facebook, and this past spring, Citi launched a MySpace credit card with rewards including music downloads and movie screenings that can be redeemed through the site.

But these efforts have been meticulously controlled — and to truly participate in social media, card companies must be willing to hand the reins over to others. “It’s a little bit risky to participate in social media, because you don’t control the message,” says Hoffman. “It can get out of hand, because someone could be saying something about you that is either untrue or unfavorable. It’s difficult for a traditional marketing person to deal with that.”

Lincoln acknowledges that it’s generally in a financial companies’ interest to go slow. “To me, they generally seem to be the most conservative when it comes to their approach to doing social and experimental things,” he says. “But that’s changing. Two years ago, it was almost impossible to get [these companies] to do anything that was really outside the box and conversational.” Polls, he says, may be an incremental move, but they’re a step in the right direction.

Serving the customer
One of the best opportunities for card companies to engage in social media is through customer service. For almost all major companies, customer service has been associated with interminable phone trees and endless hold times, but Twitter can often make the process less painful by quickly connecting customers to the experts who can fix their problems most efficiently. Comcast and Dell, for example, have offered much-hyped customer service options through Twitter. Credit card companies are slowly following suit.

Wells Fargo (@Ask_WellsFargo) and Bank of America (@BofA_Help) are two financial companies that have attracted Twitter followers and are tackling some of their customers’ credit card questions and concerns.

David Knapp, SVP process design manager for Bank of America, says the company has helped about 1,000 customers since it rolled out its Twitter presence in January 2009. Though it hasn’t done any marketing of the service, word of mouth and news media has helped the site attract more than 2,000 followers. Because the company doesn’t want card users to share sensitive financial information over the Internet, the discussion generally goes offline. But in such cases, customers still get the information they need to take their complaint or concern in the right direction.

While Knapp acknowledges that the company is just getting started with Twitter, it’s already proving valuable. Social media sites help us “learn in real time about [customers’] experiences and share feedback with senior leaders,” he says. “We see social spaces like Twitter as a potential channel of choice for customers to get the information they need.”

Though card companies may be wary of taking part in social media, there’s no question that it’s here to stay — and that the best companies will learn how to manage it effectively. Those who don’t will stay a step behind, says Hoffman. “I think it’s really important for companies” to participate in social media more,” says Hoffman. “I believe every single company will be doing it by next year, because boards are asking about it. Not every company should use it the same way, but they should use it because it will help them serve their customers better.”

See related: 24 hours of credit card tweets

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