When I started my career in business and finance, I never thought I would be writing about social media, but it's truly amazing how much of an impact it is has on businesses of all shapes and sizes. We saw the power of Facebook when a single Bank of America customer fostered a movement last fall which led the financial powerhouse to drop its controversial debit card fee. Social media is powerful, particularly when we are discussing money.
Given this, it is bit surprising that financial services companies have been slow to embrace social networks. Looking at a couple examples on Facebook: New York Life has about 250,000 followers while Bank of America has about 475,000. ESPN, by comparison, has 7 million.
Another group that was slow out of the gate with social media includes companies that cater to an audience which my company is very familiar: seniors. Seniors and boomers remain one of the fastest growing audiences on social media sites, and they embraced sites like Facebook for much more than just looking at pictures of their grandchildren. They have built online communities which will only get stronger over time.
However, many organizations with a senior focus haven't done as well with this audience as you might imagine. AARP (which, by the way, doesn't call itself the American Association of Retired Persons anymore) boasts more than 40 million members but only has about 170,000 followers on Facebook. And while there are more than 22 million veterans in the United States, the Department of Veteran's Affairs only has about 196,000 followers on Facebook.
What this means is that the senior market remains largely untapped online. If AARP, which has more than 10 percent of the U.S. population on its rolls, hasn't yet figured out how to capture seniors on the most pervasive social media site, then we all have a long way to go.
Facebook has become a key way for companies to reach seniors and inform them about new products and new options -- lifestyle, medical or financial. It offers a way to unobtrusively engage with customers and relate to them. Companies that cater to seniors must begin to embrace social media because the seniors are coming on fast and furious.
Even Facebook itself, which brought more seniors into the social media world than any other social network, has had its share of slip-ups. Recently, the site made a major change to a new format called Timeline. Facebook essentially forced companies to change their pages to this new format -- characterized by a dominant "cover photo" image on the top of the page and a two-column timetable. It's a big change, and our senior customers hated it. The situation was heightened because we had just launched a contest for one fan of our page to win a trip to meet our promotional spokesperson Betty White. The result was not just "run of-the-mill" hate: We are talking spitting nails and raging expletive kinds of hate. It got so bad that we had to ban some seniors from our site because they weren't behaving. Things have calmed down and the contest is moving along nicely (you can still enter at Facebook.com/LifelineProgram), but the uproar was a major surprise. Reporter Mike Swift of the San Jose Mercury News chronicled part of the story last week in an article that was picked up widely online.
We find that the senior market is particularly sensitive to change. While the switch to Timeline might seem inconsequential to some, we found that seniors were extremely resistant. In a survey, we learned that 90 percent of our fans didn't like Timeline.
It turns out that not only have seniors embraced sites like Facebook, but they also have used it to transform the way they communicate. Social media has become a way to remain relevant in today's fast-moving society.
The lesson learned from both the Bank of America situation last fall and our recent brush with angry retirees raging against Facebook Timeline is that we have to pay extremely close attention to social media. Companies in financial services seem extremely vulnerable, and while it may still seem to some that social media is the playground of the young, seniors are demanding to be heard.
Wm. Scott Page is president and CEO of The Lifeline Program, a life settlement provider based in Atlanta, Ga. Page helped found the life settlement industry more than 20 years ago. Today, The Lifeline Program is leading the development of the U.S. life insurance secondary market by offering life settlements to seniors and fund services to a wide range of institutions. For more information, call 770-724-7300 or visit www.thelifeline.com.