What an an honor it was seeing our CEO Clara Shih take the stage at this week’s inaugural FortuneMost Powerful Women Next Gen conference, a meeting of esteemed women leaders across business, government, the arts and other sectors.
In a unique session focused on women board members, Pattie Sellers (Senior Editor at Large at Fortune and Co-founder of Fortune MPW, @pattiesellers) spoke with Gerri Elliott (board member of Whirlpool, Bed Bath and Beyond and Charlotte Russe, @gerri_elliott), Caterina Fake (Chairman of the Board of Etsy and board director of Creative Commons, @Caterina), and Clara Shih (board member of Starbucks and Hearsay Social, @clarashih).
Each shared her unique journey to the boardroom and the individual challenges they had to overcome to get there. Of course, earning a seat in the boardroom is not the end of the journey–it’s the beginning.
Celebrating innovation, technology and social business, Hearsay Social last week hosted its second annual Social Business Innovation Summit in San Francisco, bringing together executives and thought leaders from across the financial services and technology industries.
In attendance were CEOs, heads of sales and distribution, CMOs, and compliance officers, who packed Dogpatch Studios on Thursday morning to network, learn and understand the trends and themes that are guiding how people buy products and services as well as the opportunities and challenges driving financial firms to adapt.
Inspired by the rapid-fire, rousing talks given at TED conferences, the Summit provided those in attendance–and anyone following our Twitter hashtag #SBIS14–a front row seat into the future of technology and innovation and how businesses will survive and thrive.
See below for photos, tweets, and four key takeaways from the Summit.
Social media is about enhancing human capital, not replacing it
Kicking off the Summit, Hearsay Social CEO Clara Shih (@clarashih) shared how client expectations are changing, and technology is altering how consumers make buying decisions. Online sources today are key influencers in each purchase and consumers are conditioned to expect personalized service and an ability to communicate with brand on their own terms and with their own devices.
Faced with an aging advisor population, the firms of tomorrow need to prepare to serve the next generation of investors and provide the tools to recruit the talent that will serve them. Technology scales and offers the ability to serve those previously unreachable, as it challenges and redefines existing models.
Client expectations are changing, and technology is altering how consumers make buying decisions. Online sources today are key influencers in purchases. Additionally, consumers are conditioned to expect personalized service and an ability to communicate with brands on their own terms, with their own devices, through their own channels.
Chris Andrews (Managing Director, Northwestern Mutual) and Karen Kehr (Financial Advisor, Ameriprise Financial) shared how they are using social media to grow, maintain and serve their base of clients in this new climate. Key to their success was the realization that many of their clients were already using social media platforms to network and connect. A personal and professional presence was a natural extension of their existing platform use, allowing them to convert friends into clients and find new opportunities through organic referrals.
Establish a culture of innovation
Founded in 1847 in Philadelphia, Penn Mutual has seen its share of changes, and according to Eileen McDonnell (Chairman, President & CEO, Penn Mutual), the industry is in crisis. By the year 2020, over half of the workforce will be comprised of millennials, and financial institutions need to find a way to connect and add value to these consumers. The changing face of insurance means that firms need to broaden their reach to capture new talent, especially women and millennials.
This means firms need to employ tactical initiatives to address the change by choosing the right partners, embracing innovation, and stop making excuses.
“It’s not an either/or situation. People retreat to what is comfortable to them. It will tweak…but I do believe that there will be a next generation of advisor force that will operate very differently, and they will need to co-exist.” — Eileen McDonnell, Penn Mutual
Although Eileen admits that not everyone will be open to change, the next decade will show us new producers, as well as established ones co-existing to serve the market.
Set the vision, empower the team, and keep moving forward – solid advice from Eileen McDonnell on keeping up w/the times #SBIS14
On the advisor panel, Karen Kehr shared how she uses Facebook and LinkedIn to build brand awareness and connect with the multi-generational clients she serves. Through social media, she is able to connect on a personal basis with clients, getting to know their kids and grandkids, which makes the transition to new relationships and business easy.
Chris had a similar experience: recognizing that the financial services business is about high trust relationships, he understood that the ability to relate and share in similar circles makes it easier to grow a book of business based on commonality. Long gone are the days of using the phone to connect with new prospects and expect any kind of exchange, especially when people are avoiding their phones or not using them at all.
“The old models of calling people worked in the 1950s. The 40-calls-a-day model is now broken. There is a lot of power in social, lots of information, and we need to keep it personal.” — Chris Andrews, Northwestern Mutual
Social doesn’t just help grow new business, but it also helps retain existing business. People will continue to work with advisors they trust and can relate to, and social makes it easier for people to understand who you are on a personal and professional level. It reduces the intimidation that one may feel working with a financial professional and makes clients feel comfortable and connected.
The dial-and-smile mentality is broken and no longer addresses how clients are making buying decisions. Karen concluded: “If you don’t have a presence, you don’t count.”
Joe Fernandez (CEO and founder of Klout, @JoeFernandez), whose software measures social influence and explores how people buy products and services, expanded on this idea during his presentation.
People today don’t pay attention to ads or billboards like they used to, and consumers are using information from peers to differentiate and select products. We listen to our friends, not brands.
“84% of millennial say user-generated content influences what they buy.” — Joe Fernandez, Klout
The leverage and reach provided by social media has increased the power consumers have over brands to influence the perception of products and services. In the post-advertising world, we only care what our friends say, and the power shifts back to consumers. If you don’t recognize the power of the people, you are missing an opportunity.
As an example of one platform that empowers both individuals and brands, Ralf VonSosen (Head of Marketing for Sales Solutions from LinkedIn, @rvonsosen) shared how LinkedIn is helping professionals connect with current and prospective clients, making them more productive and successful.
In total, LinkedIn has over 300 million global members representing 300,000 jobs and billions of updates on a daily basis. They have built their platform to focus on three main areas:
Identity: The resume is not as important as it once was when you can now use a digital resume that brings to life your professional background and the ability to create an online brand.
Networks: LinkedIn continues to expand the growth of the network and talent pool available on a global basis.
Knowledge: LinkedIn is quickly expanding as the definitive professional publishing platform, as evidenced by its acquisition of SlideShare, the growth of Groups and Pulse, and the expansion of its Influencer program.
At a high level, LinkedIn continues to define the role it plays in providing value to its members and continues to develop the platform to serve as an Economic Graph–a digital representation of the economy by connecting talent with opportunity at a massive scale and creating a capital of talent.
“The vision is to digitize this and then leverage this capital to where it can be more productive.” — Ralf VonSosen, LinkedIn
For users, this can only increase the value that LinkedIn provides its members, whether they are looking for job, a connection or new talent.
Resist naysayers and embrace disruption
Tapping into its Silicon Valley network, Hearsay Social was proud to present a unique panel of entrepreneurs–Bill Ready (CEO, Braintree, @williamready), Aaron Vermut (CEO, Prosper, @vermooti), and Bo Lu (CEO and founder, FutureAdvisor, @bolu)–who joined the Summit to share their views on entrepreneurship, technology trends in financial services, and how to succeed in the digital era. The panel was moderated by Amir Efrati (Senior Reporter, The Information, @amir).
Although each business is focused on a unique value proposition, they each share a common theme: disruption.
Whether it’s addressing the underserved masses with financial advisory services, micro-lending opportunities or new payment options, each company is challenging existing business models with ones that are meant to improve efficiencies and client experiences.
This is not unlike what social media is doing in financial services. It would be easy for advisors and firms to ignore the benefits of social media and hide behind the excuse of regulatory or compliance concerns. As the panel of entrepreneurs pointed out, however, the changing consumer base is wired differently, and technology is making it easier to disrupt existing systems that have yet to evolve, echoing some of the same sentiments shared by Joe Fernandez of Klout and Chris Andrews from Northwestern Mutual.
John Taft (CEO of RBC Wealth Management — US) provided a different perspective on the disruptive challenge these new companies are creating. Like Eileen before him, John recognizes that the next generation investor’s mindset is different and that more established brick and mortar businesses need to adapt to serve this new consumer. But it won’t happen overnight. And not all consumers are the same.
Financial services continues to be a high trust, high touch business that demands a personal relationship. The average age of clients is in the mid-50s and their advisors are about the same. Businesses have been built around the trust that advisors gain through personal connections established at local golf clubs, associations and common interest groups. RBC Wealth Management – US, although progressive in its approach to social, is not looking to address the unseen client market. That being said, they are looking to explore the effect that digital technology is having on wealth management.
People want to support businesses whose principles align with their own. — John Taft of @RBC#SBIS14
John challenged the notion that younger generations don’t like or use the phone because it’s really a matter of where you are in your life cycle. Life gets more complicated as you age, as do your needs. Professional advice is a premium and, the more complicated your life gets, the greater the need to have someone help you navigate through the tough decisions.
To this end, technology is both part of the problem and the solution. Although consumers today have access to more information and are perhaps more confident to make decisions on their own, it’s still a relationship business. Social media provides the avenue for shared values and ideas that ultimately make it easier for people to select the financial professional who is right for them.
Bryan Schreier (General Partner at Sequoia Capital, @schreier) agrees with John that Generation Y is unlikely to abandon their phones once their lives get more complicated.
Sequoia Capital spends a lot of time listening to college-aged consumers. What they’ve discovered is that this generation has a “lean back” mentality and prefers to see things in their social streams. They are very willing to share — by taking photos, using Snapchat and sharing online. However, they also expect the brands and services to come to them–an important lesson in the high touch and high trust environment of financial services.
Today, in the age of information, strong relationship management matters, and those that embrace technology to scale both new opportunities and maintain existing relationships will have success. There is a premium in offering personal attention and nothing beats face-to-face; in fact, that’s why we hosted the Innovation Summit in San Francisco, not online via a Web connection.
We’d like to thank all of our clients, partners, speakers and panel members for joining us in San Francisco. And thank you to all of those who joined us on Twitter using hashtag #SBIS14, as well as the Hearsay Social team who made it happen.
Every year, more and more companies get smarter about avoiding the risks while tapping into the opportunities of social media.
This year’s Financial Services Roundtable (BITS) in Washington, DC took that conversation to the next level with participation from many financial firms, including Wells Fargo, RBC, and Bank of America and regulatory bodies FINRA and FDIC.
Hearsay Social CEO Clara Shih spoke alongside thought leaders like Mark Risoldi, Managing Director at JPMorgan Chase; John Anderson, Director of Platform Operations at Facebook; and Kathleen M. Higgins, Department of Homeland Security.
Specifically, she addressed the risks of not being on social media:
1. Customers can’t find you
Many people use the social Web today to answer whatever questions they might have. When it comes to their most important purchase decisions, for example, people tend to trust their personal networks more than any other sources. On average, buyers progress nearly 60% of the way through their purchase decision-making process before engaging with a sales representative, according to Corporate Executive Board. That’s why it’s so important for you and your business to be findable on the social networks.
2. Struggle to stay top of mind
As a natural progression from the above, you should know that people are researching companies and their sales reps before doing business with them. What are they finding? Having a solid, trustworthy presence on social networks–with relevant information available there–will allow you to boost your credibility and keep you top of mind.
3. Missing out on what customers are saying
People often share important events in their lives on social media, such as when they change jobs or move cities. Tapping into these “social signals” provides an unprecedented opportunity for you to stay current with your most important contacts, including customers and prospects.
4. Losing touch with valuable contacts
Rolodexes and address books have been obsolete for some time now, but even CRM databases today are often full of outdated contact information. Conveniently, everyone typically keeps their information up to date on their social profiles. As a result, social networks provide the most accurate information about where your contacts are and what they’re doing.
5. Lack of innovation
Would you do business with a bank that doesn’t have an online portal? With every technological innovation, from the telephone to email to social, customers will expect businesses to be forward-thinking in the level of service they provide. Today, that increasingly means adopting social media.
Other sessions at the event focused on how social media fits into financial services, specifically in regard to changing customer expectations, regulatory and legal rules, and lessons learned from past events.
We look forward to the next roundtable!
It’s great to be back in Laguna Niguel meeting friends old and new this week for Fortune’s Most Powerful Women Summit, which brings together some of the most remarkable women in business, government, the arts, and beyond. Pattie Sellers and Stephanie Mehta have outdone themselves once again!
Denise Morrison (President/CEO of Campbell Soup Company) kicked off the morning in her leadership session, underscoring the importance and yet challenge of risk-taking and innovation within Fortune 500 organizations. Beth Comstock (CMO/SVP, GE) and later Wendy Clark (SVP Marketing, Coca-Cola) both talked about the transformational nature and now necessity of embracing social business.
@fortunempw great panel on Boards – Anne Mulcahy, Carol Bartz, Clara Shih, proposing term limits on boards (10-12 years), great idea
Following this, I was delighted to speak on a panel alongside Carol Bartz (former CEO of Yahoo! and before that CEO of Autodesk, now director on several boards including Cisco) and Anne Mulcahy (former CEO of Xerox, now Chairman of the Board of Save the Children and board director at Johnson & Johnson, Target, Washington Post, etc.), moderated by the talented Carol Loomis. We had a great discussion about how the best public boards and companies operate. In a nutshell:
Directors have the courage and culture to constructively disagree with one another and with management without anyone taking it personally.
There is ample diversity of backgrounds and opinions on board to carefully consider all options and angles in the case of important decisions. The board is large and diverse enough to encompass the full breadth of the corporation’s businesses, market segments, and geographies, but not so large that it becomes unwieldy or clumsy.
Greater care and consideration should be given during both the director selection and onboarding process. Board members need to remain committed to continual learning, preparation, and relationship-building with other board members and management.
In the afternoon, Michelle Gass (President, Starbucks EMEA) and Ros Brewer (CEO, Sam’s Club) discussed what it takes to help build two of America’s most beloved companies and brands.
But perhaps my favorite part of the day was hearing the stories from three incredible entrepreneurs in developing countries for this year’s Fortune Global Women Leaders Award. Goldman Sachs CEO and Chairman Lloyd Blankfein honored Catherine Nyambala of STEMAfrica in Kenya, Precious Simba of Girls Development Initiative in Zimbabwe, and Madhu Uday of Earthen Symphony based in India. It’s exciting to see passion, innovation, and entrepreneurship in organizations both large and small changing the world, one man and one woman at a time.
Ed. note: Photos courtesy of Fortune Live Media on Flickr. To learn more about the Fortune Most Powerful Women Summit, read about Clara’s experience at last year’s event, where she chatted with Warren Buffett and many great women business leaders, here and here.
“Everybody must have a voice,” urged Starbucks CEO Howard Schultz to the Hearsay Social team during a surprise afternoon visit. No matter your age, seniority, or role—you play a crucial part in executing on the vision of your company. “Don’t let mediocrity become the standard.”
Mr. Schultz encouraged the Hearsay Social team to continue fighting for the absolute best at this critical stage in our company’s growth, which he likened to the time-sensitive “imprinting” stage of a child’s growth. In addition, he proclaimed that every business from Starbucks to Hearsay Social must heed three key points to be successful today:
Every business must provide a unique value proposition to the market. For Starbucks, that’s providing quality coffee and giving back to the community. For Hearsay Social, it’s empowering our customers to be highly successful social marketers.
Digital and social technologies represent a tidal wave of change utterly transforming the way companies do business. A clear innovator in the Fortune 500, Starbucks asserted its commitment to understanding and embracing these new technologies when it appointed Hearsay Social CEO Clara Shih to its board of directors this past December.
In the 21st century, customers only support those companies that share their values. At Starbucks, Mr. Schultz’s aim is to “manage through a lens of humanity.” Positive revenue growth at the corporation must go hand in hand with positive growth in local communities around the world to make it all worthwhile.
Thank you for all the great advice, Mr. Schultz, and we can’t wait to see you again!
A week has now passed since we hosted our Social Media Executive Roundtable in downtown San Francisco. The night was a huge success, as it provided a perfectly intimate environment where marketing executives from some of the best-known insurance, financial, and retail companies could talk candidly about how they plan to approach social media, if they haven’t done so already.
In this post, I’ve summarized many of the key points made by the presenters that night. On the panel sat representatives from Facebook, LinkedIn, and Farmers Insurance.
What’s my social media strategy?
After a few minutes of introductions, CEO Clara Shih kicked off the evening with a brief presentation on the history behind Hearsay Social. Then she dove straight into the evening’s key topic: social media for marketers.
“Last year was very much the year of social media prioritization,” she said. “Everyone started asking, ‘what’s my social media strategy?’ Chief marketing officers started hiring social media managers and directors—roles that didn’t exist previously.
“This year we’ve seen a shift from social media strategy to social media execution. Now, and over the next eighteen months, people will be acting and building out those local pages and starting to reap benefits, whether that means driving revenue or simply building engagement and loyalty that ultimately leads to sales and referrals.”
Clara then noted how incredible it is that three in four CMOs have cited social media as a top priority at their organizations.
“Even if they don’t really understand why,” chimed in Ryon Harms.
Everyone laughed at Ryon’s perfectly-timed interjection, but it’s less funny how true the statement is. Indeed, we just shared data from a recent IBM study says that while 82% of CMOs plan to increase social media usage over the next few years, over half of them admit to being underprepared to carry out that task. Local, social, and the new discovery revolution
Clara then gave the floor to Emily White, the Sr. Director of Local at Facebook. Emily began by highlighting the Web’s transition from a place where we hide behind anonymity to a place that’s merely a digital version of the real world.
Back in 2000, “it seemed totally unreasonable that I would ever show my true identity online,” she said, sharing with the room her original, convoluted AOL alias.
But that was over a decade ago. “Today, if you’re online and not you, you’re creepy. You’re the weird one.”
Easily the largest social network in the world, Facebook now boasts 800 million active users and 200 million mobile users, which is why major brands from Levi’s to Starbucks are becoming hyper-social and hyper-local in all their marketing campaigns. Emily herself is thrilled about the convergence of social, mobile, and local forces because it encourages spontaneous social discovery.
With new geo-tagging features, “we’re getting a ton of information about where users are, which is actually really good [for businesses]. If they’re outside a clothing store or a bank, all of a sudden you can start getting that user information [and drive engagement].”
She offered up the example of Sprinkles Cupcakes, a boutique bakery that publishes “whisper codes,” short phrases that you can repeat in-store to receive a free cupcake. In a similar vein, Emily continued, a local Jamba Juice could encourage its patrons through Facebook that they should come early to avoid traffic sure to be brought on by the football game later that day. Social media, professionally speaking
Next up was Scott Roberts, Head of Monetization Business Development at LinkedIn. While it may not be operating on the same scale as Facebook, the professional social network now has over 120 million members, with droves more added each month. Scott began with a question: “How many people think of LinkedIn as a jobs site?”
Most hands went up.
“We get that a lot, and that’s understandable,” he continued. “We do have a major investment in talent and enabling companies to hire the best talent. What’s interesting is that only 10% of the activity on our site is actually people engaging in jobs content.”
Though he wouldn’t explicitly break down the other 90%, Scott said a lot of users are also participating in groups and reading company news. (LinkedIn has a partnership in place with Twitter to bring in tweets to LinkedIn’s streams.)
The latest, most important update to the LinkedIn platform gives companies the ability to post status updates to their company pages on the site. This new feature makes LinkedIn a much more potent social media marketing tool, in line with what businesses and brands have already been doing on Facebook and Twitter. Farmers Insurance: A social media marketing success story
Following Scott was Ryon Harms, Director of Social Media at Farmers Insurance, who shared with attendees his positive experiences in socializing his company, from corporate to local, with the help of Hearsay Social.
Early on, Farmers Insurance managed to capture 100,000 fans thanks in large part to a successful FarmVille promotion. As any social media marketer knows, however, numbers like that mean nothing unless you’re engaging them.
“We started thinking about what to do with our agents,” Ryon said, “because, at our company, everything has to do with our agents. We live and die by our agents.”
So far, Farmers Insurance has 3,400 agents taking advantage of the social media program, which comes out to 30% of Farmers’ really active agents. (Ryon notes that Farmers has 15,000 agents, but only about 10,000 are “really active.”)
Everyone is always wondering how you measure social media ROI. Well, for Ryon, it’s simple. It comes down to revenue and number of policies sold. Since going social, things have been positive, with a 50% increase in policies coming in.
“We teach [agents] that it’s a soft sale, that it’s about the personal side of your business–all the things they already do in the real world that help them sell policies. When someone walks into their office, they don’t just start bombarding [the prospective customer] with insurance talk and try to sell them something. They ask how the wife’s doing, how the local football team did–all those conversations, we tell them to bring to Facebook. And it works really well.”
Ryon strongly believes that people on Facebook want to connect with faces, not logos and brands. With that in mind, his focus over the next year is to leverage all the fans and friends of fans his company’s agents by offering them that public face over social media.
Notes from the Q&A Q: How do you use social media when your target audience isn’t technically allowed on social networks? (Example: a clothing retailer targeting children under 13 years old.) Emily: “Every fan you get is a social influencer.” Target parents because they’re the ones really doing the buying. Q: How many people does a business need to manage its corporate-to-local social media strategy? Ryon: At Farmers Insurance, it’s “just me.” They also have three or four individuals on a support hotline. The biggest problem on the corporate Page is monitoring spam, but that’s not really a big deal. Ryon admits the ball would be rolling faster with two or three extra people helping him. Q: Should brands worry about the fragmentation of their audience when considering Facebook Pages for many local franchises or agents? Ryon: On the contrary, local is actually the big advantage as it allows for personalization of messages. There’s no need to worry about a misrepresented message because Hearsay Social lets corporate Farmers Insurance monitor local agents. Q: So how do you increase your rank on Facebook so as to increase engagement? Ryon: Pictures and videos get top priority, then links, then text. Get a little geeky. It actually makes a difference. Additionally, content needs to be about you on a daily basis. Take a picture and put it on your Facebook Page. Don’t overthink it; just be authentic, be yourself. Q: Is feeding content to local representatives the biggest help or does education make more sense? Ryon: “That’s a constant debate we’re having… between me and myself.” [That got a ton of laughs.] Does he fish for agents or teach them how to fish? The answer is both. By fishing for them, they learn how to think. The kind of content fed is the big corporate news, which is uploaded to Hearsay Social. Agents then log in and can personalize the message for themselves, schedule for later, etc.
As we mentioned before, last week’s Roundtable was just the first of many we’ll be hosting around the country, with upcoming events already slated in Chicago and New York. Stay tuned to hear more from this fantastic series!