Many social media tools are either cheap or free (including blogging platforms like Wordpress and Blogger, DIY social networks like Ning, podcasting tools like Odeo, and online video like YouTube and Viddler).

But as anyone who’s jumped into the space can tell you, this doesn’t mean social media is a cost-free answer to a given strategy. The big costs are time and commitment. Creativity. Empathy. Enthusiasm. From a person or group of people. And it can almost become a double-edged sword, because the more successful your social media initiatives are – the more people are participating in your community and conversation – the more resources are required to manage it all.

From moderating comments, to creating content, to monitoring conversation elsewhere on the web – social media, a prospect that at first glance may look shiny, new, accessible, and cost-effective, can be extremely resource intensive.

So I want to ask some credit unions that are doing it, some of which I’ve called out specifically below: How do you approach resource management for your social media projects?

Do you hire a community manager? Do you clear room from an existing employee’s plate? Do you spread the work out among several employees? Do you close your eyes and hope for the best?

And beyond that, maybe the scariest thing of all, what if the initiative goes really, really well? What if your community becomes enormous and active? How do you plan to grow with them?

(I’d love to hear from: Carolina Postal CU’s Deb McLean, MidState Educator’s CU’s Danielle Chatfield, Members CU’s Matt Davis, UTFCU’s Brandon Ballentine, Premier CU, Whoever is overseeing America First CU’s Review System, Verity CU’s Shari Storm, Vancity’s William Azaroff & Kate Dugas, and anyone else who’s hands are dirty with social media.)

Gene rocks the Macs at Mt. Lehman. In today’s CUES Tech Port, Lisa writes:

While plenty of individuals go for Macs, we were interested to learn … that $40 million (U.S.) Mount Lehman Credit Union, Mount Lehman, British Columbia, is an all-Mac credit union.

“We have a few PCs out of necessity, not want,” wrote Gene Blishen, manager of the CU and chief blogger for Tinfoiling. “Every IT person working for us started as a PC guy and has ended up a Mac/Unix type.”

Blishen says when he joined the CU in 1992 that it was in need of some new computers. He already liked Macs and the Appletalk network allowed the credit union to do file sharing quite easily, without a server. Blishen says he worried a bit about staying on Macs until Apple incorporated Unix into its operating system, which made it really solid and usable. Now, with Vista and all of its reported problems on the horizon, Blishen is especially glad the CU uses Macs.

“We have a check printing program here and we bought a Vista machine to support it,” Blishen reports. But the staff had so many problems with Vista that “after a day and a half, we gave up and installed an earlier operating system on the machine.”

Gene isn’t stopping there. On his Twitter page last week, he announced:

Just ready to sign off on Mobile Banking Project with CUCBC. SMS only and iPhone prototype. How do you spell ‘excited’?

BTW, tomorrow is International Credit Union Day. Gene is spreading the word and would love to see other CUs doing the same.

Update 10/18: Mt. Lehman CU has started blogging at www.mlcublog.com.

Brent and I gave our “Building your relationship with Gen Y Members” presentation in Wisconsin a few weeks back.

One of the slices of feedback we got:

I was a little disappointed in the Gen Y presentation. They kept talking about social media, but saying not to do it.

That makes me feel good. Too many marketers are looking for a silver bullet, and social media isn’t it. I’ve never said, “Don’t do it.” But I have said, “Don’t do it without a strategy.” And I’ve said, “It’s not a fit for every business.”

During my co-presentation with Shari at Symposium, I showed the following slide:

My next point was:

I then called Tim McAlpine up to chat about Young & Free Alberta, which had just launched.

It’s immediately up there with Change Everything on my best FI social media campaign list. BTW, this outtake video from their CEO cracks me up:

Also gaining ground is what Diva Deb’s doing with the hoopty loan. As Charlie commented,

Talk about promoting thrift and building community. Nice work, CPCU.

So, back to the comment our WI presentation drew. I’d say that the keys to using social media successfully in your business are:

• You’ve got to have something compelling to talk about in the first place.
• It’s got to fit your culture. Thick skin is required.
• You’ve got to treat it as part of a larger marketing strategy.

Sure you can launch a blog or build a MySpace page or get that Jumbalooster account for your CU. But unless you know what you’re trying to accomplish, as Brent likes to say, all you’ll hear will be crickets chirping – or worse yet, criticism for not having it worked out in the first place.

Concerning financial institution websites, Ron says:

On some sites, the blog content might be the central focus of a product’s page, and on others, blog content might be sidebar material. On some sites, blog content will replace the lifestage content that appears on many sites, letting customers themselves dictate the content, tone, and direction of what appears.

Why will FIs do this? Because they’ll learn that engaging customers and prospects in conversations is the best way to sell their products. The trust they’ll build by doing this will outweigh the competitor down the street offering a CD with one-quarter of a percent better rate. That won’t be enough to get consumers to move and switch.

I agree.

The big players get this. Name a big bank – heck, name a billion-dollar CU – who’s not thinking social media right now.

I believe marketing will twist management’s arm to get this done across the board. That said, there will be resistance.

Just like there was resistance to having a website in the first place.

On an Unrelated Note:

Please come say hi to us in Mad-town or Spokane this week at the League events there. Brent and I will have Open Source CU schwag on us and we’re just itching to give it away.

Also, congrats to Team Little Guy for crossing the finish line and raising a small fortune. I had a blast in North Carolina with Jeff and crew last week – even got to meet Dan and Matt!

Dude, Where’s my money is just as stimulating as the movie to which it pays homage.

“Tired of getting those LAME credit card offers? Wonder what’s the big deal about a credit score? Wanna buy your first rideor pimp out the one you have?” [sic]

Stunning.

After the illumination that was BarCampBankSeattle (I’ll be gathering thoughts to post during flights all day), I don’t have the energy to tell you why this “blog” from Illinois State University CU represents everything you shouldn’t do with social media.

Update (6/6): Gabriel Garcia from Tech CU’s marketing department offers a good explanation in the comments here. I’m looking forward to seeing what they produce in the real campaign, as this one wasn’t intended for public consumption.

Tech CU invites you to View the TechCU Mortgage Commercial.

Enthralling.

Or how about their welcome post, where you can consume the following gem:

Social media is not a repository for your marketing leftovers.

The last post was made April 8th, so maybe I just stumbled on a site where they’re testing social media out. (It’s not linked off their website.)

When I first saw them come up in an iTunes Store search for “credit union” this morning, I just knew they’d be a shining example of a CU using social media – a big budget CU with a tech-savvy member base who’d love the medium. On the contrary, I’m very disappointed.

Just a kickin’ design wrapped around no strategy at all. No idea about the folks behind the blog. No personality. No real people to be found. No reason to subscribe.

Without compelling content, the crickets will chirp.

Please, Tech CU, prove me wrong. You already get RSS as your main site’s got it on rates, news, and events. I want to see you get social media, too.

What could Tech CU do instead?

A comment thread on another blog has made me realize that most credit unions don’t get social media. By now they’ve all at least heard of “blogs,” but few understand that social media can make business sense. I’ll get to the comment thread in question later in this post, but first I want to start with a story about one credit union exec who does see the value in social media. His CU was even a sponsor of Northern Voice 2007!

Gene Blishen writes the Tinfoiling blog. He’s the general manager of Mount Lehman Credit Union, which he describes as “a small credit union just outside of Vancouver B.C. We live among the giants (Vancity, Coast Capital, Envision, Prospera). We are small but nimble and have a purposeful strategy – Serve the member.” (BTW, I love their brand.)

On a recent post, he writes (emphasis and formatting added):

Someone once told me that small credit unions are a conscience for larger credit unions. We have this symbiotic relationship. As organizations grow larger it is apparent that their social conscience diminishes, not out of choice but because their size creates difficulties if not impossibilities on trying to maintain a focused and understood social conscience. That coupled with the new realization that marketing/PR is not appreciated when it is shoved in your face without any regard to who you are or what you think.

It’s like most advertising is in ‘black and white’, absolute, with the agenda to BUY. We have changed. Blogs and the internet have begun a very different dialogue between the buyer and the seller – there should be an eBay rating for all companies.

This difference produces marketing/PR that is in colour with every hue available. You have to now prove what you state and you don’t get a second chance. You could call it coloured no chance marketing. Because if you are wrong, or if an employee takes a stance that is at odds with what you are trying to idealize and that party that you offended understands blogging then watch out. From their small network someone has started pulling the thread and everything your business has done begins to unravel.

Does it mean much? Absolutely.

It is the lethal injection to the word of mouth buzz that is critical. It is permanent. What is posted on the internet is like something written on stone tablets. Pretty tough to erase and there for the world to see for a long time.

Brilliant. I wish the anonymous cowards commenters on this creditunions.com thread would see Gene’s post.

Note: I avoided getting involved in that conversation until someone tried to rip Verity for (a) blogging and (b) hiring Trabian. If you want to see what my writing looks like when I’m irate (and it takes a lot), comments # 17, 18, and 19 give a glimpse.

For the record, this isn’t at all against Callahan & Associates, it’s against the anonymous commenters. I love how Callahan is embracing social media with Scott’s work on his two blogs and I applaud yesterday’s launch of the CUSP blog. They understand social media.

But most financial institutions still don’t. Thank goodness for the ones who do, for the folks in that thread on the pro-social media side – the ones who are leading the charge.

P.S. I’m considering a move to Canada. Ok, just kidding – our landlord absolutely gets social media – but I do need to go visit Vancity, Social Signal, Currency Marketing, Gene C., Gene B., Darren, and Colin all on an extended road trip up north.

Darren Barefoot, a well-known Canadian blogger who’s even dropped a few comments on Open Source CU, hooked Vancity up with some constructive criticism on darrenbarefoot.com.

In case you’re wondering how things got started, Darren’s post is called I Wanted to Like Vancity, But Now I Loathe Them.

Darren writes:

You know, Vancity does a lot of great things. ChangeEverything is cool, as is their new climate change mortgage, and they have a ton of admirable local initiatives.

It was because of that good reputation, both as a bank and a community member, that we switched our business accounts from the Royal Bank to Vancity last year. The Royal Bank had given us incompetent, impersonal service, so it was a pleasure to take our money elsewhere (they likewise continue to treat us poorly for our personal accounts).

You know what? Vancity is no better. They’re possibly even worse.

I already described the serious error they made last August, as well as their confusing mail piece (a trivial complaint, but reflective of their customer service).

Since then, Vancity has made two more mistakes on basic activities within our account. I’m not manufacturing imaginary missteps. I have emails from my account manager admitting they made errors in issuing incorrect cheques and cashing cheques from the wrong account.

I don’t care how frickin’ green or community-oriented this credit union is. I don’t pay banking fees for ineptitude.

I’m out of patience and goodwill. That’s three errors in six months, in our first year with a new bank. If we performed like this at Capulet, all of our clients would fire us.

If I wasn’t leaving the country in four weeks, I’d put the immediate boot to Vancity. Instead, I’ll leave that onerous task for our return.

On a related matter, why aren’t these community-minded people monitoring the Web? This is my third post dissing their organization, and nobody from Vancity has responded, publicly or privately.

Yikes! Then the comments start:

• “I’ve been wanting to assuage my bleeding-heart side for a while and switch from TD Canada Trust to Vancity — but reading about your experiences has caused me to stay put for now.”
• “As I’ve mentioned before, I’ve never had any such problems with Vancity in our long years of dealing with them, so I have to wonder if your problems are specific to your branch”
• “Thanks, you saved me a bit of trouble. I’ve been looking at banks to open a business account and Vancity was high on my list to check out.”

Ahh, but here’s what Vancity did that Vystar didn’t.

Vancity responded.

From Sara Holland, Vancity Public Affairs and Corporate Communications:

Blogging is a real challenge for us folks over here in Banking World. On the one hand it’s really helpful to hear directly from our customers about their service challenges (and about their positive experiences — thanks for the testimonial, Derek!). On the other hand we’re really limited in how much we can respond to any specific experience in a public space like a blog, because government regulations and our own policies impose very strict limits on what we can say about anybody’s financial relationship with Vancity.

All for good reason, but it makes blogging about an issue like this one (which in some ways we’d love to do!) very tough. It’s the tension between the transparency and authenticity that lie at the heart of blogging, and the critical need to offer the level of privacy protection that members expect and deserve. Please bear with us; we’re still trying to figure out how to interact with our members in the blogging world. And that’s meant it’s taken us longer than it should have to figure out how to respond to comments like yours.

That said… we do want you (and other BC bloggers) to know that YES we are watching and listening. We’re big fans of Technorati and when Vancity pops up on someone’s blog, that blog post makes its way through to our internal communications team. But our policy is to respond behind-the-scenes, for example by asking the Branch Manager to follow up.

We take service issues very seriously. I know your Branch Manager dealt directly with you regarding the original service issue. The bottom line is we’ve made mistakes with your account and that’s not okay. And we really appreciate that our community values and investments have given you a reason to be patient while we worked on your concerns. We’re determined to improve our service to you and make you love us. We will be in touch.

So I asked Darren what the response meant. He wrote back,

To me, the most interesting thing was that they had read my previous complaints about their organization, but had failed to recognize that they’d done so. As I said, listening is one thing, but telling people you’re listening is another…. Did the comment make a difference? Not really, as I had to more or less demand that they respond publically. If they’d shown up uninvited and spontaneously left a comment, that would have been more effective.

Fair enough. I agree, the response should’ve come on his earlier posts. But I think their response is more significant than they’re getting credit for in the comment thread of his post.

Every time I speak to a credit union about blogosphere criticism (or praise for that matter), I say that I’m of the opinion they should respond. Isn’t that a social media rule?!

I think Vancity did the right thing to respond this time on Darren’s blog. Darren might not stay with Vancity, but they explained that (a) they listen to the blogosphere, (b) they didn’t know how to respond (blogging is tough) and they’re sorry for the delay, (c) his customer service complaints are valid, and (d) they want another chance to prove it by improving.

And when I say “they”, I love that a real person (Sara) at Vancity responded.

Taking your lumps on a blog and responding is better than not participating in the conversation, right?

Since we started Open Source CU, we’ve been extra careful not to use it as a platform to promote Trabian products or services. So before we tell you about this, we’re disclosing that it’s a product we’ll be launching very shortly.

We have a passion for credit unions, Rails development, and social media. Give With Us brings together all three.

It’s based on a 2006 Filene i3 project called My Community Connection. There’s a working prototype at selco.cugive.com.

Much of the direction we’re taking with Give With Us has been driven by the community on Open Source CU through the conversations we’ve had about social media here. So we owe a big “Thank You” both to Filene for providing a truly open source idea and to our readers and commenters for showing us a need for credit unions to move into social media on a larger scale.

We hope you’ll be willing to let us know what you think about the product, and if you’re interested in getting in on the launch, just send me an email.

The Board of Directors for UFirst Federal Credit Union began blogging this month with The Boardcast.

They’re using the site to communicate with members about new building sites (see their Flickr page), board meeting topics and more. One post even lists the names of the Directors and how to get in touch with them through email and comments on the blog.

Most recently they posted concerning a security issue they faced with their credit and debit cards.

You may have been notified that your UFirst credit or debit card might have been compromised. As a precaution the cards that are listed as being “at risk” have been canceled and new cards are being issued. Visa has been communicating with CEO Bourgeois on a regular basis and has been keeping her informed on the status of this security breach on the part of TJX Corp. and its subsidiaries.

This post tells me exactly what I need to hear. “Here’s what happened, this is what we’re doing about it and here’s how you can help protect yourself and your credit.”

Where else do credit union members have access to their directors daily? Where else can the credit union member ask questions of their directors as soon as they arise? I could be wrong, but I’m pretty sure they’re the first financial institution whose board is using social media this way.

Bravo to the directors at UFirst for seeing an opportunity to communicate with members and going for it. Keep this one in your feed reader as I have a feeling it’s only going to get better.

Two days after Shari blogged about how Verity means the state or quality of being true or real, they got a big chance to prove it. Their website got hacked.

From yesterday’s Spoofing Alert post:

It appears that our log-in button has been re-routed to an unauthorized website. We are in the process right now of trying break the link or pull down our site.

Please do not log in to home banking at this time.

If you did try to log on earlier today and were asked for your credit card numbers AND YOU GAVE THEM, please call this number immediately to notify us at 1-800-444-4589 option 2. Please leave us a message and we will return your call as soon as possible.

We will keep you updated on this blog site.

They’ve since pulled the main website down completely – and their blog is, from what I can tell, the primary point of online contact for their members. From an exchange in the comments:

Anonymous: I answered some screening questions the last time I logged in e.g mothers maiden name, etc. Were these authentic or spoofed?

Shari: It appears that the spoofing happened about 10 am this morning …. Unfortunately, those questions you answered were not from us. Without saying too much (because the perpetrators can read this site as well as we can) we have done a few things to shore up the problem but are not ready just yet to announce that everything is fixed.

Anonymous: It was actually already happening this morning at 6:30… long before 10.

Shari: Thank you for letting us know that. I had logged on at 5 am yesterday morning and everything was fine. The next confirmed log-in that we received was 10:00 am. So we now know it happened sometime between 5:00 am and 6:30 am.

Jim Bruene picked up on this first, and he points out there’s a “silver lining.”

As bad as this is, Verity should be applauded for the rapid response, using both its website and blog to get the word out.

Shari, this drama will pass. The last two posts you’ve made have probably been the toughest ones you’ve ever had to write, knowing that all of your online members’ eyes are now being directed to your blog. Keep your chin up; you’re making Verity’s name match the definition.

To everyone else, this should long serve as a case study of a blog’s potential as much more than a corporate marketing tool.

We’ve been looking for a credit union CEO to blog with members in a setting that allows comments and offers RSS. Thanks to The Better Banking Blog, we’ve found one.

From the post:

Online Banking Review first wrote about blogging and banking in 2004, but I think it’s fair to say blogging has now gone mainstream. In the current issue’s feature on Web 2.0, Hothouse founding partner Simon van Wyk says “Anyone who runs a business needs to run a blog.”

.... Google the words “bank blog” and you’re more likely to find a hardened blogger complaining about poor customer service from a bank rather than a contribution from the industry.

But while the banks may be silent on the blog front, a credit union chief executive in South Australia has taken up the challenge. Greg Connor, who runs Savings & Loans Credit Union, uses his blog to communicate to the credit union’s 170,000 members and even takes the time to respond to their posts.

Connor is making some great posts, and his members are responding. There’s a community in his comment threads. It’s a great example of how CU executive teams should be conversing with their members.

It has, however, been a couple of weeks since his last post, but a lot of C-level blogs in other industries follow this pattern. Hey, in that position, your readers understand: you’re a busy guy. The infrequency does make a good argument for using a group blog approach, but even we’ve been known to push two weeks between posts on Open Source CU (we still have that problem on the Trabian blog).

Is it just me or has there been a recent spike in financial institutions participating in the social web?

Congrats to Vancity, Social Signal, and the rest of the ChangeEverything team for a stellar review on Techcrunch. From Marshall Kirkpatrick’s post:

I think this is a great example of a company making use of Web 2.0 tools to promote themselves in a way that places the ballance of the impact on providing value to users and incurs promotional benefits for themselves as a consequence of that. Though this model may seem less immediately lucrative, it’s also much less likely to face the kind of anti-corporate backlash bubbling up in MySpace and YouTube.

Read the full post, leave a comment, and spread some cooperative love.

Verity Credit Union blog contributer Tina K. brings it with her latest post Who cares about credit unions? And I quote:

I recently returned from a conference where I learned that 2 out 3 consumers believe credit unions should be taxed. Another statistic: more than 50% of credit union members do not know the difference between a bank and a credit union.

I’d love to know the source of the stats – they’re entirely believable. And if accurate they’re scary for credit unions. Any idea where they’re from? Any skeptics out there?

Last week one of Vancity’s Change Everything participants asked a tough question, and I was itching for a response to appear. The user wrote in a post titled Why am I here:

I just discovered this Vancity blog site…. Hmmmm…. very nice but why would a financial institution put up a web site for bloggers….

Change – interesting theme considering people do not want to change, hate change and try to avoid change at all costs. Why does the credit union want me to change?

Vancity’s golden response (called Why we did it):

You’re right: banks don’t have a stake in social networking. But Vancity isn’t a bank; it’s a community-based financial institution that is as interested in making our community work as it is in making money. And these days, community is more and more about what happens online, which is why we thought we could play a role in helping use the Net as a tool to support community development in the Lower Mainland and Victoria.

.... At the end of the day, however, what matters is not our vision for the site—it’s what people make of it. So if the site isn’t working for you as is, let us know what would make it useful to you. Because among the things we’re changing are the features offered here, and we’re hoping the site will continue to evolve to meet the community’s interests and expectations.

By the way, in the interest of full disclosure, I work at Vancity and was one of the people who helped bring this site to life. I look forward to hearing more comments…

How easy it would’ve been for William and the rest of Vancity’s Change Everything team to say, “Let’s delete that thread now!” After all, it brought forth some comments calling it “time wasted” and a “pretty odd marketing attempt.”

Transparency is a powerful thing, friends. Now those of us following this project have an example of a credit union responding to direct criticism on a blog. Thank you again, Vancity, because you’re doing everything right with this site.

Vancity, don’t sweat the negativity. Your community will flourish and you’ll have a ton of users eager to respond on your behalf.