I recently heard an NPR story on my morning drive about an increasing number of customers switching from large national banks to small community banks because of the recent bailouts and bonuses. As people make decisions on where to keep their money, financial institutions everywhere are utilizing social media as a new way to reach out to their existing customers and gather new ones.

The Financial Brand, an interesting Web site that offers information about just that – financial brands – offers an extensive 80-page report about how financial institutions can “harness the power of Twitter.” Granted, you may not have the time to review such an extensive report, but it’s interesting to know that the research is out there. Highlights include:

  • Promote new products and offers
  • Share personal finance tips
  • Express their brand and reveal their personalities
  • Build community outreach programs
  • Provide information about community events and activities
  • Increase exposure for their charitable and philanthropic efforts

Thankfully, the very helpful Mashable Web site offers five ways that banks can use social media to return real value for their institutions, with the top five being:

  • Community building
  • Product research
  • Customer service
  • Marketing and promotion
  • Transparency

Financial institutions (and all other organizations using social media to connect with customers) need to remember that the number one reason to participate in social media is to build relationships.

Organizations who want to ultimately gain customers need to listen and engage at the point of need. For example, if you use Twitter to SPAM followers with your message or service (even if they are likely to use your services), they will most likely ignore and possibly resent your brand or organization.

Preferably, an organization should listen, engage and be involved in its follower’s posts only to suggest specific products or services if someone specifically asks for the information. For example, if there is a discussion about who has free checking, it would be appropriate to provide specific information. The goal is to be helpful and share without expectations.

The organization should establish that its investment in the community is for the long term, not just when there’s a transaction on the line. When the organization is engaged in the daily conversation and an opportunity arises to which the organization has expertise or interest, there is now the occasion and the invitation to connect.