case study

management communication

MNG8

001 Session 3 2017 MARKING RUBRIC: ASSESSMENT 3

MNG81001 MANAGEMENT COMMUNICATION

Assessment 3

ANALYSIS (CASE STUDY)

Document design

Memo format

Due Date

Friday

th January 2018 9.00am (QLD time)

Length

1000 words (+/- 10%)

Weight

25%

The purpose of Assessment 3 is to understand the concept of ‘analysis’ and how to learn to analyse information efficiently and effectively.

According to Rosenwaser and Stephen (2009, p. 4), analysis is:

More than just a set of skills, analysis is a frame of mind, an attitude

toward experience. It is a form of detective work that typically

pursues something puzzling, something you are seeking to

understand rather than something you are already sure you have

the answers to. Analysis finds questions where there seemed not

to be any, and it makes connections that might not have been

evident at first.

Assessment Task

Companies around the globe are embracing and adapting social media for many different reasons, including: customer service, marketing, internal communications, public relations, and corporate social responsibility. It is now a reality that social media is changing the way stakeholders and companies communicate daily, providing opportunities for collaboration, participation, interactivity, and engagement.

Your task is to analyse a business case study that chronicles the management of a social media strategy by First National Bank (FNB), one of South Africa’s ‘Big Four’ banks.

A business case study ‘is a description of an actual situation, commonly involving a decision, a challenge, an opportunity, a problem or an issue faced by a person (or persons) in an organization’ (Erskine, J.A. and Leenders, M.R., Learning with Cases, © 1997, Richard Ivey School of Business). Cases contain relevant data about the issue available to the key person in the case, plus background information about the organisation.

Please follow these guidelines to complete the assessment:

1. Carefully read the Ivey Business School case: ‘Banking on Social Media’. Note: you will need to go onto the Ivey Business School website https://www.iveycases.com/ and purchase a copy of this case (Product Number: 9B14A070) (approximately $AUD5.00).

2. Read the case several times and answer the following questions in your analysis:

· How has First National Bank (FNB) used digital and social media to engage with its customers?

· What benefits does FNB obtain from investing in a social media strategy?

· What lessons can FNB learn about developing and implementing a social media strategy?

· Identify important factors for an organisation to consider when using social media to communicate with customers and improve their experience. Use 3-5 secondary sources to support your analysis.

3. You are encouraged to write a first draft of this memo at least one week prior to the due date to ensure adequate time for revision. Please be aware that the writing quality and appropriate referencing will be marked as well as the content.

4. Submit Assessment 3 to Turnitin via the Blackboard site no later than the due date: Monday 9th October, 9.00AM (QLD time).

5. Refer to the Marking Guide located under on the Blackboard.

The weighting for Assessment 3 is (25%).

PRIOS/CDT brief for Assessment 3:

a. Purpose: Analyse the management of a social media strategy.

b. Reader: Lana Strydon, Head Digital Marketing and Media, FNB.

c. Information: Based on primary and secondary sources.

d. Organisation: Direct order approach.

e. Style: Formal. Be sure to proofread carefully to ensure that there are no sentence-level errors such as spelling mistakes, wrong word choice, incorrect punctuation, etc.

f. Channel choice: written document.

g. Document design: memo format.

h. Length: 1000 words.

Please note:

1. All applications for Special Consideration need to be submitted before the due date of the assessment item. For more information see

http://scu.edu.au/students/index.php/30

and Rule 3 – Coursework Awards – Student Assessment and Examinations

http://policies.scu.edu.au/view.current.php?id=0014

Computer failure will not be accepted as a reason for missing an assessment deadline: you are strongly advised to backup all of your work, for example on a USB flash drive, to ensure that you are still able to submit to a deadline in the event of a computer related failure.

2. In cases where there are no accepted mitigating circumstances as determined through Special Consideration procedures, late submission of assessment tasks will lead automatically to the imposition of a penalty. Penalties will be applied for late submissions as soon as the deadline is reached.

3. Students are reminded of the extremely serious view the University takes with regard to plagiarism and are strongly advised to read the university’s policies on academic integrity and the penalties associated with academic misconduct (see: https://policies.scu.edu.au/ view.current.php?id=00142, as well as information in the UIG).

Marking criteria/weighting

30%

Evaluation criteria	Task	Weighting
1.Purpose & Audience Understanding and addressing the question	Has the student understood the task and covered the key points? Does the response adequately address the topic and task? Does this document take into account the needs of the audience? Does this document provide adequate information for the reader? Does the writer thoroughly address any potential questions from the reader?	40%
2. Structure & Organisation Thesis/argument, introduction, conclusion, paragraphs. Using referencing in your writing (paraphrasing, synthesising and quotations).	Is there a clear structure to the response? Does the introduction, body and conclusion contain all the identifying features ? Do the paragraphs contain one main idea that is explored using relevant evidence?		30%
3.Research & Language Integrating evidence (paraphrasing, synthesising and quotations) Referencing – in-text (citing) and reference list. Sentences – spelling, punctuation, grammar.	Is there evidence of research? Is it properly referenced? Are source materials properly integrated and referenced in-text? Is there a range of vocabulary? Are sentences grammatically correct? Are sentences accurate and complete? Has a spell check been used? Is spelling accurate?

Fail	Pass	Credit	Distinction	High Distinction
0 – 49	50 – 64	65 – 74	75 – 84	85 – 100
<12.5	12.5 – 15.5	16 – 18	18.5 – 20.5	21+
Multiple parts of the assignment are missing or incomplete. Student fails to answer the question.	Essential elements are imprecise or absent. Work at a level that would be considered basic.	Key elements are presented but could be further developed and given ore depth.	Most aspects included in a final, well-developed form.	The assignment contains all required elements and is of the highest order.

MNG81001 Session 3 2017 Assessment 3

Distinction (22.5 – 25)

1. Purpose and Audience (40%)	2. Structure and Organisation (30%)	3. Research and Language Use (30%)
High Distinction (34 – 40)	High Distinction (25.5 – 30)	Distinction 22.5 – 25)
All aspects of the assessment are comprehensively and appropriately explored, supported and covered. The writer’s position and/or purpose is clear and fully developed throughout the assessment. All ideas are relevant and appropriate for the audience. Reference to required number of relevant sources. The specified word length is met (1000 words +/– 10%). Writing communicates meaning clearly and achieves purpose of the task.	The introduction is solid and thorough and includes all identifying features. Strong and relevant thesis statement with controlling idea(s) linked to topic sentences. Conclusion clearly relates back to the title, thesis statement and main points. Presents a well-defined summary of the whole paper. Well-defined argument. Information and ideas are logically organised and easily followed. Cohesion between sentences and paragraphs is highly effective, and all internal headings are used effectively and sufficiently. Paragraphing is used appropriately and skillfully. Format enhances readability of the paper.	Paraphrases and synthesises information in own words; cites the originating author(s) and provides the corresponding reference. Quotes (where appropriate) used sparingly and cited correctly. Information is correctly referenced following the SCU Harvard style for both in-text and end-of-text referencing. A wide range of vocabulary is used accurately and appropriately (for audience); spelling is correct. A wide range of grammatical structures are used accurately and appropriately throughout with no errors (incl. punctuation errors. Reference to required number of three (3) to five (5) relevant sources.
Distinction (30 – 33.5)		Distinction (22.5 – 25)
All aspects of the assessment are addressed and supported sufficiently and appropriately. The writer’s position and/or purpose is clear and well-developed. The specified word length is met (1000 words +/– 10%). Information and ideas are relevant and appropriate for the audience (minor lapses may occur). Writing communicates meaning to a satisfactory level and achieves purpose of the task.	The introduction is clear and appropriate and includes all identifying features. Appropriate and relevant thesis statement with controlling idea(s) linked to topic sentences. Conclusion clearly relates back to the title, thesis statement and main points. Presents a good summary of the whole paper. The organisation of information and ideas is logical (only minor lapses/loss of coherence occur). Cohesion between sentences and paragraphs is often very effective, and internal headings are often effective and sufficient. Paragraphing is appropriate. Each paragraph has one clear main idea (lapses are rare).	Paraphrases and synthesises information in own words; cites the originating author(s) and provides the corresponding reference. Quotes (where appropriate) used sparingly and cited correctly In-text and end-of-text referencing is mostly accurate (some minor inconsistencies/inaccuracies) A range of vocabulary is used accurately and appropriately (for audience); minor spelling errors. A range of grammatical structures are appropriately used; some minor errors, (incl. punctuation errors). Reference to required number of three (3) to five (5) relevant sources.

Credit (19.5 – 22)

Pass (15 – 19)

Credit (26 – 29)		Credit (19.5 – 22)
Nearly all aspects of the assessment are addressed with appropriate support (although more support may be needed in some areas). The writer’s position and/or purpose are generally developed and clear. The specified word length is met (1000 words +/– 10%). Most information and ideas are extended sufficiently, but there may be a minor lack of clarity or focus and/or relevance in some supporting ideas/material. Writing generally communicates effectively but logic and meaning not always clear.	The introduction is adequate; outlines identifying features but greater clarity required. The thesis statement makes an overly broad claim and is somewhat ambiguous in meaning. Conclusion addresses most main areas adequately. Information and ideas are generally organised logically (lapses/loss of coherence may occur). Cohesion between sentences and paragraphs is helpful (although errors, repetitive use, or underuse occur), and some internal headings are well-managed. Paragraphing is generally effective and appropriate but may not always be logical, and/or the main idea of the paragraph may not always be clear.	Most attempts at paraphrasing and synthesising are sufficient, accurate, and appropriate; cites the originating author(s) and provides the corresponding reference. Quotes (where appropriate) used sparingly and mostly cited correctly. Some errors in the SCU Harvard reference style – in-text and end-of-text referencing. Vocabulary is generally used adequately, accurately and appropriately (for audience), some spelling errors. Grammatical structures are generally used accurately and appropriately, although errors (incl. punctuation errors) occur, and these may impede communication. Reference to required number of three (3) to five (5) relevant sources.
Pass (20 – 25.5)		Pass (15 – 19)
Most major aspects of the assessment are addressed (minor aspects may be missing), but some parts lack appropriate support and/or extension. The format of the assessment may not be appropriate and/or the specified word length (1000 words +/-10%) is not met. The writer’s position and/or purpose lacks clarity. Information and ideas may be insufficiently extended for the audience, and there may be a lack of clarity and/or relevance. There may be some repetition. Writing generally communicates adequately but logic and meaning not always clear.	Some aspects of the introduction are sufficient; although at times overly vague with broad generalisations; greater clarity and direction needed. Thesis statement makes an overly general claim and is somewhat ambiguous in meaning. Conclusion attempted but does not appropriately sum up findings or link back to the Information and ideas may not always have a clear progression, and there may be a lack of coherence in some areas. Cohesion between sentences and paragraphs is sometimes helpful (although errors, repetitive use, or underuse occur), but internal headings may be missing and/or inappropriate. Paragraphing is evident but may not always be logical and/or the main idea of some paragraphs is unclear.	Most attempts at paraphrasing and synthesising are insufficient, inaccurate, and/or inappropriate; not all originating author(s) cited with corresponding reference. Overreliance on quotes (where appropriate); some errors in citation. In-text and end-of-text referencing lacks accuracy and/or consistency. Vocabulary is adequate but is sometimes used inaccurately and/or inappropriately (for audience), and spelling errors may occur. Grammatical structures lack accuracy, and errors (incl. punctuation errors) impede communication. Reference to required number of three (3) to five (5) relevant sources.

Fail (0 – 14.5)

Fail (0 – 19.5)

Fail (0 – 14.5)

The requirements of assessment are not sufficiently covered and/or supported.

The format of the assessment is not appropriate.

The specified word length exceeds 1100 words/is less than 900 words.

The writer’s position and purpose often lacks clarity.

Information and ideas are insufficiently extended and/or supported for the audience. Those presented are often irrelevant, repetitive and/or inadequate.

Logic and meaning not clear.

The introduction is poorly written; does not address the main identifying features (purpose, thesis statement and blueprint).

No thesis statement provided.

No logical conclusion. Fails to summarise the main ideas which have been discussed or make a final comment about the paper’s main idea.

Information and ideas lack a clear progression and coherence.

Cohesion between sentences and paragraphs is often erroneous or missing, and internal headings are missing and/or inappropriate.

Paragraphing may be missing, and the main idea of paragraphs is often unclear.

Evidence of paraphrasing plagiarism; original author’s words moved around, while summarising the main ideas; fails to cite the original author(s) and to provide the corresponding bibliographic reference.

Overreliance on (>10%) or no quotes.

Fails to follow Harvard referencing style for both in-text and end-of-text referencing.

Vocabulary is often inadequate, inappropriate (for audience) and inaccurate; words often incorrect or incorrectly used; substantial spelling errors.

Grammatical structures lack accuracy, and errors (incl. punctuation errors) strain communication.

Attempts at paraphrasing are insufficient, inaccurate, and/or inappropriate.

Reference to five (5) relevant sources.

9B14A070

BANKING ON SOCIAL MEDIA (A)

Luisa Mazinter, Nicola Kleyn, Michael M. Goldman and Jennifer Lindsey-Renton wrote this case solely to provide material for class
discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may
have disguised certain names and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

Lana Strydom ended another productive team meeting on the third floor of First National Bank’s
Johannesburg headquarters on February 23, 2012, and headed back to her office to finish an e-mail she
had been hoping to send upstairs before the end of the day. As head of digital marketing and media in the
brand management unit at South Africa’s First National Bank (FNB), Strydom had been responsible for
the bank’s social media marketing strategy since 2011. She was delighted that FNB had been
acknowledged just a few days before as the top bank in terms of consumer attitude and perception in the
2012 BMI-TechKnowledge Digital Lifestyle predictor survey, perhaps partly due to the bank’s well-
publicized transactional banking app, which within 12 months had seen more than R5.2 billion (US$675
million)1 in transactions. Strydom was excited about FNB’s recent announcement offering banking via
Facebook and numerous other innovations being worked on, but was also conscious of how rapidly the
other major retail banks in South Africa were catching up.

As Strydom returned to her e-mail, which was outlining the major challenges and opportunities facing
FNB’s social media heading into 2013, a tweet from @StandardBankGrp caught her attention. The
Twitter handle for Standard Bank, one of the three major retail banks that FNB competed against, stated
that it had just instructed its attorneys to lodge a complaint against what it alleged to be FNB’s misleading
advertising that laid claim to a number of innovations. Strydom wondered whether Standard Bank’s use
of Twitter to communicate this competitive action was related to FNB’s extensive and well-publicized use
of the micro-blogging service. She also knew that the debate on Twitter over the next few hours would be
a significant indicator of whether her social media strategy had really been successful.

ORIGINS OF FIRST NATIONAL BANK

Claiming to be the oldest bank in South Africa, FNB traced its origins back to the Eastern Province Bank,
which was formed in Grahamstown in 1838. In 1891, the government decided to create a local
commercial bank, which it did through a concession agreement.

The task of The Nationale Bank der Zuid-Afrikaansche Republiek Beperk (National Bank of the South
African Republic Limited) was to focus primarily on financing agricultural development. After the end of

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the Second Anglo-Boer War, the name was changed to the National Bank of South Africa, which grew to
one of the largest local banks by 1914.2

However, by the early 1920s the National Bank was suffering from bad debt and heavy losses. It
consequently merged with the Anglo-Egyptian Bank and the Colonial Bank in 1925 to form Barclays
Bank (Dominion, Colonial and Overseas). In 1971, Barclays restructured its operations and its South
African operation was renamed Barclays National Bank Limited.3 Due to a disinvestment campaign
against South Africa because of its apartheid policies, Barclays sold its shareholding in the bank in 1986
and the bank was renamed First National Bank of Southern Africa Limited in 1987, becoming a wholly
South African owned and controlled entity.4

A LANDMARK DEVELOPMENT

FNB began a new chapter in 1998 when the financial services interests of Rand Merchant Bank Holdings
and Anglo American were merged to form FirstRand Limited.5 In the process, FNB was delisted from the
Johannesburg Stock Exchange (JSE) on May 22, 1998, to become a wholly owned subsidiary of
FirstRand, which was listed on the JSE on May 25, 1998. On June 30, 1999, the banking interests of
FirstRand formally merged into a single entity to form FirstRand Bank.6 The other divisions comprised
WesBank, a self-proclaimed leader in asset-based finance solutions, and Rand Merchant Bank, which was
created in 1977 by entrepreneurs Paul Harris, Laurie Dippenaar and GT Ferreira as a niche structured
finance house.7

Almost two centuries after its humble beginnings in Grahamstown, FNB had become one of South
Africa’s “Big Four” banks, with Nedbank, Standard Bank and Absa making up the remaining three. As
advances in technology pushed the banking sector into unchartered territory, it remained to be seen which
of the banks would take the lead in the race to the top.

FINANCIAL PERFORMANCE

The interim results for the six months ending December 2011 seemed positive for FNB, with pre-tax
profits growing 30 per cent and producing a normalized return on equity (ROE) of 38 per cent. The credit
for achieving the strategy to grow customers (over 5 per cent) and transactional volumes (over 10 per
cent) was given to the staff and its ability to create and implement innovative products as well as grow
diverse channels to market. Costs, however, had grown 10 per cent over the period. (See Exhibit 1.)

The advertising costs to drive the growth of the FNB brand had come with a price tag of R370 million in
2011, of which 10 per cent had been used for digital marketing and to build and manage its online social
networks.

In commenting to the media on the costs for the period, FNB’s CEO, Michael Jordaan, claimed that the
ongoing investment in the business, such as the rollout of the EasyPlan infrastructure, innovative mobile
platforms and customer acquisition strategies, had been a worthwhile investment. While cost reduction
was considered an area for focus, investment was forecast to continue in areas of the business where
growth opportunities existed, particularly through the use of innovative products and reward programs
which had driven good growth in customer and transactional volumes in the consumer segment.8 It was
also expected that a bigger percentage of total advertising spending would go to digital marketing in
2012.

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With professional services firm PricewaterhouseCoopers predicting a less-than-rosy revenue outlook for
the banking industry in South Africa in its Major Banks Analysis Survey of 2011, the leadership team at
FNB realized that there would be at least six separate sources of pressure on revenue in the near term:

 Margin pressures as historically low interest rates were maintained.
 Low growth in credit, given the strength of economic activity in general.
 An increased cost of funding, as banks’ funding profiles were lengthened, with no reprieve on the

cost of retail funding through deposits.
 Subdued trading income.
 Pressure on fee income.9
 Competitive activity and pressure from major players, as well as new entrants to the market.

One of the areas that the team decided to place an increased focus on was pushing the mobile handset
revolution, which it still saw as a potentially high-growth area that would not require significant
infrastructure investment and would provide access to digital banking services at a more affordable cost
to the consumer.

By June 2012, the most recent : All Media & Products Survey (AMPS) 2011A/2012A showed that the
bank’s focus on online banking was paying off, with nearly 30 per cent of all online banking customers in
South Africa using FNB’s online product. In addition, mobile banking was also proving to be a high-
volume transactional channel, with AMPS 2011A/2012A highlighting that FNB had captured the largest
market share in the country at 33 per cent.10

RETAIL BANKING IN SOUTH AFRICA

Out of an estimated population of 50.59 million South Africans,11 the “Big Four” claimed to have 34.5
million accounts open between them, with an estimated 40 million open across all the banks
countrywide.12

By early 2012, however, FNB found itself in an increasingly competitive sector. Apart from FNB’s rivals
in the “Big Four” category, young upstarts in the form of Capitec Bank and African Bank were making
their presence felt — particularly in the previously unbanked market. A 2011 peer review amongst 20
banks in South Africa found that Standard Bank was leading the race in corporate banking, foreign
exchange trading, fixed income, money markets and trade finance, amongst others, while Absa had yet
again positioned itself as the leader in retail lending and deposits, and home loans. FNB had, however,
outdone Standard Bank to take the lead in Internet banking, which was a testament to the bank’s focus on
the digital arena.13

EXPANSION INTO AFRICA AND OTHER EMERGING MARKETS

Priding itself on innovation and a willingness to venture further afield, First National Bank maintained
banking subsidiaries which it owned wholly or in part, in Botswana, Mozambique, Namibia, South
Africa, Swaziland, Tanzania, Zambia and India. Despite the ongoing recession, FNB continued to explore
alternative options for expansion. Of the “Big Four,” Standard Bank had the largest footprint in Africa
covering 18 countries, with plans for further expansion into sub-Saharan Africa through the creation of an
additional 30 branches in 2012.14 Nedbank and Absa, in the meantime, relied on alliances and
partnerships to take advantage of growth opportunities on the continent.15

Page 4 9B14A070

THE REGULATORY ENVIRONMENT

Although the International Monetary Fund stated that South African regulators had shielded the banking
sector from the Global Financial Crisis, there was still concern amongst some in the banking sector
regarding the heavy regulatory environment in the country.16 Legislation that affected the banking
industry included, amongst others, the Banks Act, the National Payment System Act, the Financial
Intelligence Centre Act, the Financial Intermediary and Advisory Services Act, the National Credit Act,
the Consumer Protection Act, the Home Loan and Mortgage Disclosure Act and the Competition Act.17

Banks also had to comply with the King Report on Corporate Governance, Basel II and the Financial
Sector Charter, a transformation charter in line with Broad-Based Black Economic Empowerment Act,
which was signed in 2003 for implementation in 2004. The participants (financial institutions) committed
to “actively promoting a transformed, vibrant, and globally competitive financial sector that reflects the
demographics of South Africa, and contributing to the establishment of an equitable society by effectively
providing accessible financial services to black people and by directing investment into targeted sectors of
the economy.”18

Other key issues for the retail banks included expansion plans into Africa, technological challenges,
profitability and revenue growth, risk management, skills shortages, an evolving competitive landscape,
market dynamics and, most importantly for Michael Jordaan and his leadership team, keeping abreast of
innovation.19

THE COOL REVOLUTION

In 2004, 48-year-old Michael Jordaan took over as CEO of FNB, after spending a number of years in
different leadership positions within the FirstRand Group. Jordaan believed that the key to its success was
in attracting the right type of people to the organization.

As CEO,

I actually have very little to do. It’s completely over-estimated what I do. I create an environment
where people can come up with these ideas and do well. We’re blessed with people who can do
that. The thing about being good with tech is that we can’t be a staid old bank. Very few people
want to work for those. They like cool, hi-tech kind of companies to work for and so all I can do
is create the environment and trust in the people to innovate.20

As a major investor in South African soccer, it did not come as a surprise to many when FNB announced
its sponsorship of the 2010 FIFA World Cup to the tune of about R216 million (US$30 million). FNB
was the first South African corporation to sign up officially as a national supporter of the tournament.21

Many corporations believed that innovation was the key, yet on becoming CEO, Jordaan took this mantra
one step further. Speaking at the South African Innovation Summit in 2010, Jordaan explained FNB’s
attitude to innovation to the audience. “We take innovation very seriously in FNB — none of these
innovations simply happen by chance. The leadership of FNB believes that innovation is a key business
attitude that enables South African businesses to compete effectively in the global environment.”22

As part of his drive for innovation, Jordaan decided to build and manage FNB’s reputation by enabling
everyone in the business to consistently deliver on its promise of “How can we help you?”23 Jordaan was
extremely comfortable and active on social networks — particularly Twitter — on which he discussed

Page 5 9B14A070

topics ranging from wine farming to the state of the economy and cricket. He was also known for
occasionally responding directly to customer complaints or compliments. Research undertaken by
BRANDfog had shown the importance of this, with 78 per cent of survey respondents saying that CEO
participation in social media leads to better communication, while 71 per cent said it leads to improved
brand image and 64 per cent said it provides more transparency.24

In addition, FNB created an Innovators’ Initiative Award, rewarding up to R15 million (US$2 million)
per annum to employees for unique and trend-setting ideas that really had a business benefit. In particular,
one area Jordaan focused on was using digital innovation to grow the bank’s market, whether by enabling
customers to do some transactions on Facebook, launching an educational series on YouTube, opening a
dotFNB store or creating the first banking app in South Africa.25

FNB’S SOCIAL MEDIA STRATEGY

Between FNB’s first foray into the social media space in 2004 and Strydom’s move to FNB in mid-2011,
the number of Twitter users in South Africa had grown to 1.5 million, LinkedIn users had grown to 1.8
million and Facebook users had grown to 5.3 million (more than10 per cent of the population26). For this
reason, the digital team at FNB identified this as an area to extend its already dominant digital footprint
over its competitors and the team grew from one to eight people in 18 months. Once the decision had
been made to explore the social media space further, the next step was to establish what role this
particular channel would play in its overall business and channel mix.

Strydom believed that social media offered the FNB brand the ability to build ongoing relationships with
customers and potential customers that were not bound by the inherent restrictions of most other
communication methods and channels.

At a team meeting, Strydom explained that,

The medium allows for high levels of engagement across various areas including marketing
(awareness, information and discovery), sales (acquiring), support (education, feedback, advice
and complaints) and transacting (social commerce and loyalty). Our program will aim to build
sustainable relationships with our customers, which in turn will give us the ability to further tap
into the social graph that connects people to each other.

This would then allow FNB to actively express its core brand value of “How can we help you?” with the
intention to have the bank be represented as approachable, trustworthy, likable and technology-savvy. The
additional benefit, thought Strydom, would be that it would be able to develop a deep understanding of its
customers’ needs and social behaviours, including lifestyle choices and interests.

The competitive pressure around retail banking in South Africa in particular had increased significantly in
the previous year. Ernst & Young’s Global Consumer Banking Survey for 201227 highlighted that bank
customers globally were becoming less loyal to their banks. In South Africa, customer attrition had
increased from 24 per cent to 39 per cent in one year (a 62.5 per cent increase) and 70 per cent of
customers who had switched banks were citing high fees or charges as the main factor, followed by poor
branch experiences and a lack of personalized contact. In the context of extreme competition between the
South African banks for customers and a share of non-interest revenue, the survey also found that going
forward, 13 per cent of customers were planning to switch banks.

Page 6 9B14A070

As banks had also been placed under severe pressure to cut operational costs, of which the majority were
situated in formal, physical infrastructure, most had begun to implement strategies to migrate those
customers performing low-value, simple transactions to digital channels. One way in which Strydom had
managed to drive consumers to an FNB product using a low-cost solution was with the creation of the
eWallet Facebook game. In explaining her strategy, Strydom had explained that, “Although eWallet is a
great product, our research is showing that there is a lack of understanding around how the product
actually works. To that end, we would like to design a game with two objectives in mind: 1) create further
market awareness around the benefits of the product, and 2) educate customers on how the product
works.”

Upon being given the go-ahead, the team created a game that allowed users to interact with the actual
product features to move from level to level, thus learning about the product in a fun and interactive
way. More than 50,000 people visited the game and over 30,000 people actually played the game, many
of whom came back repeatedly. The game contributed more than 100,000 new fans to the FNB Facebook
page. More importantly, the game contributed 8,300 new senders and 30,000 new transactions to the
eWallet product. Based purely on revenue, the net contribution to the business on a R1.4 million
investment was R6.1 million.

However, as more banks started to embrace technology, there were fewer differentiators between the
major players, with the result that Strydom realized the need for FNB to “conceptualize and implement
strategies to mitigate the downward pressure on non-interest revenue.”

Strydom reminded her team that it needed to have “clever and effective strategies to replace lost fees, as
well as to protect their remaining non-interest revenue.” This, she explained, could involve a number of
factors such as “innovative marketing campaigns to both attract new customers and retain existing
customers, reducing service and transactional fees while increasing service levels, introducing loyalty
schemes that reward customers who stay with the same provider, as well as a certain level of business
diversification.”

She knew that applying strategic thought to how the bank engaged with stakeholders through social media
was critical — both on an operational level and in achieving its long-term aims. As the team applied
itself, however, it soon realized that it had created positive brand ambassadors who were recruiting
customers on its behalf. In addition, it came to understand that many potential customers were using
social media to research their choice of bank.

Fortunately for Strydom, the innovative culture that Jordaan had been cultivating meant that buy-in from
the wider organization was achieved relatively easily. This meant that latitude was given when it came to
implementing the social media strategy, giving the digital marketing team the opportunity to change
things that did not work or expand things that did. In addition, formal service-level agreements were put
in place with strategic business unit heads with regards to response times on social media complaints —
regardless of what time of day or night they came through. Strydom encouraged her team to approach
social media as a holistic channel rather than just as a marketing tool. One way in which she suggested
this be done was to build value-added services such as Facebook banking onto the various platforms in an
attempt to extend customer utility further than just marketing and customer support.

The decision was made to create a singular social media presence, with the exception of specific
sponsorship properties because they were managed in a very specific way. When discussing this strategy
to her team, Strydom explained that, “We believe that a consolidated presence in the social media space
allows us to build reach (which is important for all media), although we are aware that it comes at a loss

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of some relevance. This is a strategic decision we have made, as we believe it is more effective to create
and deliver content across fewer platforms and will allow us to focus on quality.” Strydom decided to
focus on Facebook and Twitter initially, later adding LinkedIn, as her research showed that these
platforms were where the majority of the South African population was engaging.

As FNB was a mass brand, she knew that the wider its reach the better, although the bank did target some
of its communication at certain segments; for example, it used LinkedIn for professional communication
around business banking rather than Facebook.

The endeavour to humanize the brand led to the creation of RB Jacobs, a persona that could represent the
bank in the social media environment on all its platforms. Going so far as to create a tone of voice and a
visual representation for the persona, the name “RB Jacobs” was first used as a generic name on bank
cards and cheque books, before being used by the digital team to become the name of the social media
persona (see Exhibit 2).

With every platform having its own plan, the team included elements such as when and how to activate
the platform, identification of the capabilities provided by the platform, identification of how these
capabilities supported the bank’s business objectives, analysis of competitive activity, identification and
creation of the visual branding elements required, building a communications plan that included
marketing messages, and identifying and putting in place people and processes to support business
objectives. These plans could then be adapted as feedback became available. Strydom’s strategy also
included the intention to extend customer interaction beyond information, marketing and customer
service, into areas such as education, where video content could effectively be used for financial
education and literacy.

Some of these adaptations came about from the fact that FNB underestimated how quickly its
communities would grow, meaning that amongst other things, a constant revision of staff allocation
became necessary. This was in part due to the expectation being set that the bank would respond to
customers whenever they requested assistance, including weekends and public holidays.

Strydom and Jordaan already knew that every social media platform was different, which meant that FNB
had to align its interaction on each channel with its intent and mood. In addition, the social media team
had to be aware of and in tune with all developments taking place within the company, including
marketing campaigns, public relations launches, new product releases, product enhancements and system
performance (uptime), and processes had to be in place to disseminate information in a timely fashion
from all areas of the business.

This required a mind-shift across the organization, as the bank had to become more agile on various
operational levels if it was to respond to the continuous flow of social media queries and complaints. As
Strydom saw it, the only way to keep up with the volume was to constantly build systems and processes
to provide better customer service through social media. Employing a team of social media writers from
public relations, copywriting and similar backgrounds in a shift system from 6 a.m. until 10 p.m. seven
days a week, including public holidays, meant that FNB was able to maintain an active voice in the
community. One of the great benefits to the business was the ability to provide real-time feedback from
customers, which was constantly shared with business units. Business units were provided with in-depth
reporting on a monthly, as well as an ad hoc, basis. In addition, it was decided that these reports would be
shared at an executive level in an effort to ensure that insights were turned into action.

Page 8 9B14A070

At the most recent executive committee meeting, Strydom had reported that on Facebook the organization
was reaching between 50,000 and 100,000 active page engagements per month and that with a single post
it was able to reach up to 1.4 million users. From a Twitter perspective, she added, FNB was reaching
approximately 700,000 individual users per month. (See Exhibit 3)

In an effort to extend its lead in social media, FNB was also starting to pull social media into other online
content channels, by using platform-specific application programming interfaces (APIs) for integration,
then building whatever business rules it required on top of the APIs.

Strydom explained to the team that visual and audio brand recognition (reminders) would always remain
important, and in fact they could become even more important in the future. “Brand stories that lead to
trust and differentiation will most likely become even more important over time, as it will be almost
impossible to differentiate on elements such as price, product and service. It is very difficult to tell a story
using search only…”

In line with this, FNB also ran an advertising campaign that was driven by the character “Steve.” The
advertisements were used to personalize customers’ commonly felt pain points in the category and
positioned FNB as the solution, generating a substantial return on investment overall. According to
FNB’s Barrett Whiteford, “Within two months, this no-holds-barred approach to radio advertising
resulted in more than 10,999 accounts opened (and cards swiped), resulting in increased uptake of other
banking products on offer.”28 As a personalization of the customer experience, Steve (who in effect
represented competitive banking brands) was kept separate from the RB Jacobs persona, which
represented FNB.

Given the warning shot from Standard Bank, Strydom knew that it was time to reflect on their approach
thus far. Strydom wondered what additional ideas were needed to allow FNB to not only continue
differentiating itself, but also alleviate the pressure on non-interest revenues.

Luisa Mazinter is Adjunct Faculty at the University of Pretoria’s Gordon Institute of Business Science. Nicola Kleyn is an
Associate Professor at the University of Pretoria’s Gordon Institute of Business Science. Michael M. Goldman is an
Assistant Professor at the University of San Francisco and Adjunct Faculty at the University of Pretoria’s Gordon Institute
of Business Science. Jennifer Lindsey-Renton is a freelance case writer for the University of Pretoria’s Gordon Institute of
Business Science.

Page 9 9B14A070

EXHIBIT 1: FINANCIAL PERFORMANCE

FNB South Africa
Year Ended June 30, 2011

2011 (R million) 2010 (R million)

Normalized earnings 5,022 4,276
Profit before tax 6,944 5,806
Total assets 223,174 204,309
Total liabilities 215,901 199,115
Credit loss ratio (%) 0.93 1.39
ROE (%) 35.7 31.8

Source: FirstRand Limited Audited Financial Results, http://firstrand.onlinereport.co.za/firstrand_circular_june_2011/wp-
content/themes/firstrand-2011/downloads/pdfs/firstrand_group , accessed August 16, 2012.

Standard Bank Group
Year Ended December 31,
2011

2011 (R million) 2010 (R million)

Headline earnings 13,599 11,283
Profit before tax 20,856 17,370
Total assets 1,492,829 1,332,409
Total liabilities 1,375,296 1,229,211
Credit loss ratio (%) 0.87 1.04
ROE (%) 14.3 12.5

Source: Standard Bank Group Annual Integrated Report, http://annualreport2011.standardbank.com/downloads/Book-II-
Risk-and-Capital-Management-Report-and-AFS , accessed August 16, 2012.

Absa Group Limited
Year Ended December 31,
2011

2011 (R million) 2010 (R million)

Headline earnings 9,719 8,041
Profit before tax 14,210 11,851
Total assets 786,719 725,957
Total liabilities 718,314 663,808
Credit loss ratio (%) 1.01 1.18
ROE (%) 16.4 15.1

Source: Absa Group Financial Results,
www.barclaysafrica.com/deployedfiles/Assets/Richmedia/PDF/Results/Annual/2011_full_year_results_booklet , accessed
August 16, 2012.

Nedbank Group
Year Ended December 31,
2011

2011 (R million) 2010 (R million)

Headline earnings 6,184 4,900
Profit before tax 8,677 6,500
Total assets 648,127 608,718
Total liabilities 595,442 560,904
Credit loss ratio (%) 1.14 1.36
ROE (%) 13.6 11.8

Source: Nedbank Group Audited Summarised Financial Results,
www.nedbankgroup.co.za/financial/2011AnnualResults/default.asp, accessed August 16, 2012.

Page 10 9B14A070

EXHIBIT 2: SOCIAL MEDIA PRESENCE OF FNB

Source: Publicly available FNB Twitter and Facebook websites, retrieved August 16, 2012.

EXHIBIT 3: SOCIAL MEDIA COMMUNITY SIZES ACROSS THE BIG FOUR BANKS
(AS AT END OF FEBRUARY 2012)

Bank Facebook Twitter YouTube LinkedIn
FNB 53,545 6,250 (@RBJacobs) 125,315 4,603
Absa 53,331 – 23,220 13,299
Standard Bank 28,710 6,534 29,775 18,666
Nedbank 1,935 577 12,127 9,477

Source: E-mail from Suzanne Myburgh, Head: Digital Marketing & Media, FNB Brand Management, October 27, 2014.

Page 11 9B14A070

ENDNOTES

1 US$1= R 7.7, as of February 23, 2012.
2 “FNB – First National Bank,” South African Travel Online, www.southafrica.to/Banks/FNB/FNB.php5, accessed August 18,
2012.
3 Ibid.
4 FirstRand Group, https://www.fnbzambia.co.zm/about-fnb/firstRand-group.html, accessed December 16, 2014.
5 P. Cairns, “The Investment Case – FirstRand Ltd,” Moneyweb, July 15, 2011,
www.moneyweb.co.za/mw/content/en/moneyweb-101-for-beginners?oid=547520&sn=2009+Detail, accessed August 19,
2012.
6 “The World of FNB,” First National Bank, https://www.fnb.co.za/about-fnb/about-us/our-roots.html, accessed August 19,
2012.
7 “RMB at a Glance,” Rand Merchant Bank, www.rmb.co.za/aboutGlance.asp, accessed August 19, 2012.
8 “Financial Results,” First Rand Bank, www.firstrand.co.za/InvestorCentre/Pages/FrbAnnualReports.aspx, accessed August
18, 2012.
9 “Reinforcing Collective Strength And Stability: South Africa – Major Banks Analysis,” PricewaterhouseCoopers,
http://www.pwc.co.za/en/assets/pdf/major-banks-analysis-march-2011 , accessed December 16, 2014.
10 “Latest News,” First National Bank, https://www.fnb.co.za/news/index.html, accessed August 19, 2012.
11 “Mid-Year Population Estimates,” Statistics South Africa, www.statssa.gov.za/publications/P0302/P03022011 ,
accessed August 20, 2012.
12 “Publications and Industry Insights,” PricewaterhouseCoopers, www.pwc.co.za/en/publications/index.jhtml, accessed
August 20, 2012.
13 Ibid.
14 H. Nyambura-Mwaura “Standard Bank’s Africa Costs Weigh on Profit,” Reuters, August 16, 2012,
http://af.reuters.com/article/investingNews/idAFJOE87F07220120816, accessed August 18, 2012.
15 A. Ntingi, “Big Four Banks Trek into Africa,” fin24, July 24, 2011, http://m.news24.com/fin24/Companies/Financial-
Services/Big-four-banks-trek-into-Africa-20110724, accessed August 18, 2012.
16 “Financial System Regulation, Legislation and Reform,” SA Financial Sector Forum,
www.finforum.co.za/financial_regulation.htm, accessed August 20, 2012.
17 South African Banking Sector Overview, The Banking Association South Africa, www.banking.org.za/index.php/our-
industry/2012-south-african-banking-sector-overview, accessed August 20, 2012.
18 Ibid.
19 PricewaterhouseCoopers, op. cit.
20 S. Hlongwane, “The Cool Banker, Michael Jordaan,” Daily Maverick, September 8, 2011,
http://dailymaverick.co.za/article/2011-09-08-the-cool-banker-michael-jordaan, accessed August 19, 2012.
21 R. Faure, “FNB Announces $30m Sponsorship For 2010 Cup,” Mail & Guardian, July 7, 2006, www.mg.co.za/article/2006-
07-06-fnb-announces-30m-sponsorship-for-2010-cup, accessed August 19, 2012.
22 “Michael Jordaan,” SA Innovation Summit, www.innovationsummit.co.za/2011/2010/jordaan.php, accessed August 20,
2012.
23 A. Hadfield, “How Can We Help You — FNB’s Financial Community,” thought leader,
www.techleader.co.za/andyhadfield/2009/03/18/how-can-we-help-you-fnbs-financial-community, accessed September 5,
2012.
24 “CEOs Who Tweet Held in High Regard,” eMarketer, March 27, 2012, www.emarketer.com/Article/CEOs-Who-Tweet-
Held-High-Regard/1008929#ir6K39t8e2ctKA0F.99, accessed June 18, 2013.
25 “Latest News,” First National Bank, op. cit.
26 Statistics South Africa, op. cit.
27 “The Voice of Today’s Banking Customer,” Ernst & Young, www.ey.com/GL/en/Industries/Financial-Services/Banking—
Capital-Markets/Global-consumer-banking-survey-2012–The-voice-of-todays-banking-customer, accessed June 18, 2013.
28 RAB, www.rab.co.za/other/item/525-case-study-fnb-steve-campaign.html#sthash.mkoBJqjj.dpbs, accessed December 16,
2014.

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