The Social Risks for Co-operatives

Slide1As I have discussed, social media presents great opportunity for Co-operatives.  The International Co-operative Alliance has set forth an ambitious plan that “envisions co-operatives to be the fastest growing form of enterprise by 2020”.  It is likely that social media will be the harbinger of this message and is thus vital to the cause.  With great opportunity though, often comes great risks; namely, for co-operatives, in the form of compliance and regulatory risks.

Many co-operatives operate in industries, financial services, insurance, and even agriculture, that are heavily regulated.  I have discussed how credit unions, financial co-operatives, have been early adopters of social media.  They are thus the first co-operatives to deal with the risks.  It seems that many have found the risk too daunting to overcome.  A Financial Brand article found that “Credit unions on Twitter struggle to attract followers even after being active over two years, and 1 in 5 just give up entirely”.  The article found that “the vast majority of tweets sent are one-directional, often with links back to a press release or similar credit union web page.”  Such dry, safe content is indicative of an industry constrained by compliance and regulatory concerns.

There is hope for co-operatives, though, as according to Nichole Kelly in Social Media Explorer, compliance and regulatory risks can be managed.  PR risks, which fortunately co-operatives rarely face, are much harder to manage due to their unpredictable nature.  Compliance and regulatory risks are known; a credit union knows that it must take care in tweeting current loan rates, for example, as any inaccuracies would be published inaccuracies and thus open to fines and censure if incorrect.

Quitting Twitter and abandoning social media are not the answer to regulatory risk.  Creating a plan that includes active engagement and risk management is the solution. Suncoast Schools Federal Credit Union were recently caught over-thinking their social media strategy, likely due to fear over compliance and regulatory risk presented by Twitter.  After a year and a half of inactivity they jumped into Twitter to respond to an odd and unsavory tweet about one of their locations two days after it appeared.  The delay and their strange response turned into a PR risk once the Financial Brand picked it up for this article.

Co-operatives need to be active and engaged with social media if this decade is to see the growth the ICA predicts.  There is no need to shy away from engagement due to regulatory concerns, as these are risks that can be managed.

Where Can I Find a Co-operative?

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2012 was the International Year of the Co-operative, and its success in creating awareness of co-operatives worldwide has prompted the International Co-operative Alliance (ICA) to call for a Co-op decade.  By 2020, the goal is for co-operatives to become leaders in economic, social and environmental sustainability, a preferred business model, and the fastest growing form of enterprise.  But, the ICA acknowledges that this is a strategy that they cannot move forward with alone.  They state that in order for the Co-op decade “to be meaningful and effective, it needs to be taken up and endorsed by national bodies, by individual societies, and by all people who believe in the co-operative way of doing business”.

The next decade will require “bold initiatives and clear implementation plans”.  I believe the answer will be social media.  But let’s here consider what role a mobile social media application could play in these implementation plans.

The first step in creating awareness of co-operatives will be first to alert consumers of where they can find co-operatives.  Geolocation apps will be vital to this phase of the plan.  Naturally, Foursquare, being the leading location-based social network would be the mobile social media application of choice.  With Foursquare, users can check into locations they have visited using their phones and when they do check in, they can alert their Facebook friends and Twitter followers of where they have been.  According to Brian Honigman in SocialMedia Examiner, “Foursquare is the ideal platform to bridge the gap between your offline and online audience in an affordable and scalable way”.  The opportunity for co-operatives on Foursquare is huge, but at the present it seems to be an opportunity that is largely being missed.

In my last post, I discussed how credit unions, financial co-operatives, were successfully using Facebook to spread brand awareness.  They have been early adopters of social media and as such have been out in front of other co-ops.  Many are on Foursquare, but check-ins are limited and engagement relatively low.  That extends too to food co-ops.  When I searched Foursaquare for co-operatives in NH, the only one that came up was the Concord Co-Op.  They had limited company info and only 40 check-ins from 30 people.

There are two reasons why I see co-ops as not being successful with location based services such as Foursquare.  First, they are not properly categorizing themselves.  One of the key tenets of the co-operative movement is “Co-operation among co-operatives”.  Credit Unions should categorize themselves as co-operatives, so should the Concord co-op, currently listed as Uncategorized.  This would enable interested consumers to better see how the movement is represented in their area.  The second reason, is that check-ins are not being rewarded.  Co-operatives could take a page from this successful user Bright Eyes Family Vision Care.  Despite being a non-traditional venue for check-ins (as co-operatives certainly are), the owner increased engagement and awareness by offering odd and exciting promos, such as homemade hot sauce.

If Co-operatives are to truly emerge as the fastest growing form of enterprise in this decade, they will need, first, to let people know where they are.  Foursquare, a mobile social media application, is currently the best tool for them use.

Co-operatives unite and let the check-ins begin!

Social Media Lessons to be Learned from Financial Cooperatives

To consider how cooperatives should best use social media to connect with members and potential members, I will look at the state of the social media within the financial cooperative, or Credit Union, industry.  According to the Financial Brand, “retail banking has consistently ranked among the earliest and most aggressive industries to adopt social channels”.  Never to be outdone by their shareholder-owned competitors, Credit Unions have also been aggressive adopters of social channels.  As early adopters, financial cooperatives can teach the cooperative movement many lessons from what works, Facebook pages, to what does not work (at least not yet), Pinterest boards.

A quick survey of financial cooperatives in NH shows an active and engaged industry. Bellwether Community Credit Union , Granite State Credit Union, Service Credit Union, St. Mary’s Bank, and my own, Triangle Credit Union, all actively manage a Facebook page.  Posts on Facebook range from the community minded, to inform members of local events and sponsorships, to financial advice, often done through the resharing of fin lit blogs, and general Credit Union announcements, during the recent snowstorm, Nemo, all took to Facebook to inform members of branch closings.

Facebook is a great member-facing tool as it is where many of a cooperatives’ members and potential members are located.  A cooperative benefits greatly when they create shareable content on Facebook. For example, Bellwether’s branches and offices recently participated in the Go Red for Women campaign to create awareness of heart disease.  A photo collage of the event was posted on Facebook.  The post received 26 likes and 3 comments, placing Bellwether positively in the news feeds of each of those who took the time to engage.  Here cooperatives can see an example of how social media can be used to share the message of community, which is tantamount to the success of any cooperative.

Beyond Facebook, Bellwether use Linkedin, St. Mary’s, Triangle, and Service use YouTube, and Service and Triangle use Twitter.  Triangle also maintain a blog, to which I am a contributor.  There is no doubt that the adoption of these different tools create additional platforms for listening but are they truly capable of engaging?  A look at Pinterest boards shows how aggressive early adoption can force a cooperative down a narrow and unfocused path.

A Financial Brand study of Pinterest reveals that a great deal of time and effort may be misguided when it comes to social media use.  They cite the example of Fireman Community’s use of Pinterest.   As I mentioned earlier, the banking industry and by extension the financial cooperative industry, are quick adopters of new social media tools.  In 2012, Pinterest was all the rage, with Banks and Credit Unions alike directing efforts toward the image-sharing site.  But can their be any value for a financial cooperative with only intangibles to sell to engage in a tool that makes sense for restaurants and clothiers that have a need to display visualizations of their products?  Financial Brand’s analysis of Fireman’s determined that approximately 67 hours were spent maintaining the page to net 274 followers of which many are other Credit Unions, marketing professionals, and not in fact members.  Making the answer a resounding “no”.

In the comments of the article an articulate and fascinating argument plays out.  Fireman’s defend their use of Pinterest, stating, “Pinterest is part of our holistic multi-channel content strategy, not just another social network…That means we’re not just wasting time on Pinterest; we’re integrating it into our overall communication strategy.”   A worthy and admirable response, but the resources of a cooperative are generally limited.  Consideration should always be given to utilizing only those tools that have been proven to be successful.

Financial Cooperatives, and other coops by extension, must use caution when proceeding with social media channel adoption.  According to the Financial Brand, “65% of consumers surveyed say that they would stop using a brand that upset or irritated them as a result of their social media behavior.”  Coops run the risk of pushing themselves unfavorably on potential members and of publishing irrelevant and unnecessary content because they feel the need to communicate or participate in new channels; the more channels, the thinner and less relevant the content will be.  Social Media is as much about listening as it is about connecting.  Cooperatives will be successful and reap the rewards of social media as long as they focus on creating great content, and limiting themselves to participating in proven channels.

Ian – Southern New Hampshire University Grad Student