Social media can drive customer loyalty, claims Mintel

Consumers are increasingly using social networking sites to make purchase decisions and influence life in general, according to new research from Mintel Comperemedia.

Its survey found 22% of consumers think social media sites help them make good decisions about purchases, and an equal number say that social networking sites help them make good decisions about their life in general.

Conversely, less than half of respondents said they believe their bank is a company they can trust, and 50% stated they have less trust in banks than they did two years ago.

“The percentage of consumers with positive perceptions of bank brands has dropped substantially in the last year,” said Susan Menke, VP of financial services with Mintel Comperemedia. “Obviously there is a crisis of confidence in the banking industry.”

Mintel’s research found 43% of social networkers are using social networking sites for purposes other than connecting with friends and family. The diverse number of ways people use such sites leaves a window open for financial institutions to make meaningful connections with unlikely customers and build loyalty with current ones, it says.

“Nearly one in three social network users value the opinions and recommendations of family and friends over industry experts, or any other source of information,” said Menke. “Banks can take advantage of that established trust to promote confidence in their brands.”

Ideally, banks can create social networking sites that allow established customers to recommend their bank and its services to friends and family, effectively building relationships with consumers they might not otherwise reach. Mintel’s research also suggests that the most effective ways for financial companies to engage consumers on social networking sites is to offer incentives – such as coupons to local businesses or donations to social causes.

“Social media is a relatively new channel for many financial companies, but indications are that it can be a very effective way to reach consumers,” said Menke.