The Age of Social Media: The Imperative of Responding to Public Sentiment
There has never been any doubt about how rapidly our world has changed. Be that as it may, the advent of social media is arguably one of the most phenomenal breakthroughs in communication within the framework of a definitive virtual reality. So forceful are the effects of the virtual world that its reverberating impacts are felt on the real world, such as is the case of the role of social media sites in marshalling the popular protests that characterized the infamous Arab Spring. Same can be said about the “Occupy Movements” in the western world, whose professed target of rage is the financial industry1. Within this context, it will only be fair for financial institutions to curiously plug into the conversations parading the social networking waves, after all it has proven to be the most powerful weapon in the arsenal of grassroot mobilization around any cause. As an umbrella term, social media, often, used interchangeably with social networking, is used to loosely describe all forms of technologically enhanced content creation and interaction within a social platform. Podcasts, blogs, microblogs, wikis, video and photo sharing among others are the main featured supporting drivers of social media.
A starting point for financial firms considering plugging into the social media wave will be to clearly define and articulate what their motivations and indeed their expectations are. How financial firm interpret social media as a novel communication channel will ultimately determine how they can leverage its potential for achieving their corporate goals. Typical of all forms of service, financial service is intrinsically social at its core by dint of the fact that it essentially involves links and networks between institutional service providers and their customers on a wide array of levels. It therefore speaks of the salience of relationships in sustaining the exchanges between service provider and client. Financial institution’s most potent leverage is enhanced by the relationships they craft with their clients.
As stated earlier, social media platforms often reflect the prevailing public sentiments at any given time. Following the ravages of the Great Recession, social media platforms have become the rallying platforms for public agitation targeting financial institutions. Levitt posits that an indispensable determinant of the long term sustainability or otherwise of a firm is hinged on its ability to offer services and products that are consistently reflected in the dictates of the external environment that a firm operates. Therefore, to be able to map out an appropriate strategic response to external developments then policymakers must be able to decipher these integral elements in ways that are consistent with reality.
Beyond identifying the external features of a firm’s environment, there is the added challenge of how the features relate to the internal capacity of the firm. According to Goffee and Jones (1998), many great corporate shots have gone into oblivion as a consequence of their inability to re-invent themselves to reflect the changing external environment around them. Goffee and Jones, discovered to their dismay that contrary to the presumptive dominant rhetoric, almost all the established giant firms that lost significant grounds to new firms were otherwise perceived to be actively pursuing product-centered innovation ostensibly to remain competitive.
Goffee and Jones attribute it to an inefficient utilization of internal capacities to deal with downright external factors. Similarly, Levitt attributes the demise of corporate giants to the tendency to place emphasis on products and services whilst fatally downplaying the place of the customer in their strategic policy framework. In other words, rather than gauging their performance from the lens of the customers, they unwittingly reposed excessive trust in their product and service brands. Consequently, a common practice therefore is to engage in what Levitt famously described as needless “product provincialism” characterized by an inflexible product disposition with the result of "endangering their futures by improperly defining their purposes" (Levitt 1975, 27). Corporations therefore become experts within the limited periphery of their products.
Firms therefore need to enmesh themselves into the conversations taking place within the public discourse, then will they better understand the kind of sophisticated and savvy “facebook generation” customers that they have to serve2. Not the least, taking cognizance of the fact that the public agitations against financial institutions border around questions of ethics and morality3.
Going forward, financial institutions should be able to broadly define their mission in ways that facilitates their capacity to respond to their industry dynamics. Such a definition should incorporate public sentiments as an integral part of business. Doing so first of all leans credence to the vitality of the customer as an indispensable stakeholder. All indications point to beaming discontent and subtle distrust of the financial institutions amongst many people thus pointing to poisoned relationship with a section of the public. Thus said, the most salient part of the learning curve for financial institutions in this day and age is how to restore the fractured relationship with the masses of disillusioned protesters who represent potential market strength.
As irrefutable as this is, relationships and the sentiments that sustain them constitute an integral facet of business success. Whilst there is little to be done by way of reversing the social media ground swell, it has with the same magnitude inadvertently thrown wide the door on what can be done with it. The power of social media to galvanize, organize and coordinate several protest franchises against the existing financial orthodoxy is by itself testament to the power of social media but most importantly it offers a rare indicator into the future of how financial institutions should sustain themselves in business.
Firms that are able to translate the negative public sentiment into a clarion call to re-invent a new financial services philosophy that is in synergy with the times will ultimately emerge triumphal in pioneering an epochal dispensation of financial success. A comprehensive firewall of trust should be erected to articulate the timeless axiom that the customer is king, by reassuring customers and the public at large a humane face of the financial industry is not only possible but right. In its current state, the imbalanced relationship where the public tightens its belts but the financial industry does not, it is hard to conceive how the gains of the social media frenzy will impact financial institutions if policymakers overlook the resonance coming from the millions of aggrieved customers out there on the virtual world.
Finally, my essay’s rule of thumb on the social media frenzy is centered on the basic premise of the pertinence of communication in constructing the link between financial institutions and their customers. Quite frankly, financial institutions have social media to thank for creating the platform to reach out to customers but what counts at the end of the day will be the degree of dexterity to re-invent business strategies to reflect the times we live in. Because, ultimately, many out there are keen for socially enhanced alternatives to financial services and they are the new generational pool of unreached customers.
- “Occupy Wall Street, The Revolution Continues World Wide,” accessed from http://occupywallst.org/ Michiko Kakutani, Company on the Verge of Social Breakthrough, Accessed on May 22, 2012 from
- Executives of Banks have come up for criticism for been overpaid at times when the global economy is turmoil, but crucially the role played by banks and financial institutions in causing the financial crisis enrages aggrieved protesters the more.
- Levitt, Theodore, Marketing Myopia, Harvard Business Review (September/October 1975): 26-180.
- Goffee, R. and Jones, G. The Character of a Corporation: How Your Company's Culture Can Make or Break Your Business, Harper Business, London, 1998.
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