Credit card issuers tune in to social media

By CreditCards.com

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 page (sign-up required). And Dell offers deals and customer support through its primary Twitter page, which has collected more than 1 million 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 about 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.

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, the director of design, customer experience and social media for Discover Financial Services, 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 it 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 cards. "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 more listening than talking. Torrey Lincoln, the 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 JPMorgan 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 their own terms. 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.

Continued: Serving the customer

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