Using Social Media in Regulated Industries

This post originally appeared on the oneforty blog. It’s being reposted here as part of my blogging portfolio.

Think selling social media to your boss is difficult? Try being a marketer in a regulated industry. You know what the benefits of social media are. Listening to customer conversations on Twitter and Facebook means engaging with and learning from current and potential customers, defining your brand and tapping into a major market research opportunity. However, there are significant restrictions with what you can communicate online.

What are some regulated industries?

• Publicly traded companies
• Finance
• Healthcare
• Insurance
• Pharmaceuticals
• Spirits

For those of you working in these regulated industries, the first step in your social media strategy should be to understand what restrictions apply to you. Here is a brief overview and some examples of how some other companies are still getting involved in the conversation while complying with these important guidelines.

Publicly Traded Companies

Is your company publicly traded? You need to keep these restrictions in mind, including anything that applies specifically to your industry. The Regulations Fair Disclosure policy states that publicly traded companies release material information to investors and the public at the same time. If you don’t comply, charges of insider trading or selective disclosure could result.  Publicly traded companies should be mindful about about providing forward-looking statements.

A clearly-communicated social media policy for employees is essential for these companies.

For a few examples of social media policies at companies, read:

• 4 Examples of Social Media Policies by Erin Everhart in SocialFresh
• 57 Social Media Policy Examples and Resources by Dave Fleet

Finance

Promotions on social media from financial institutions have to be fair, clear and not misleading. Most of the regulations have to do with full disclosure of terms and features or availability of products and services (including pricing, rates, rewards, eligibility). Financial companies have to follow advertising rules pertaining to truth-in-lending and truth-in-savings and overdraft protection. This could affect how their social media strategy works.

Financial organizations must be careful of how they handle confidential information. Because of the risk of identity theft or phishing, financial companies should not use social media to collect personal information from customers or prospects.

Bank of America takes on the challenge of participating on Twitter as part of a regulated industry. If you look at their customer service account, @BofA_help , you’ll see they respectfully request that their customers not share account information via Twitter.

Citizens Bank has a disclaimer in their Twitter background regarding this topic. Bank of America does as well.

The risk for identity theft or phishing is all the more reason for these types of companies to be responsibly involved. Claiming their brand names on social media sites and making sure that they – not the scammers – are engaging with customers and defining their brands with great customer service (and not a PR backlash from a scam) is important.

Financial institutions are also usually required to keep copies of customer conversations. If there was ever a case for social CRM – this is it. Being able to connect Twitter conversations to customer profiles in an offline database with account numbers would be especially beneficial for this industry.

An especially helpful tool for these professionals would be Backupify – a social media and cloud data archiving tool. This would keep record of customer conversations from Twitter and Facebook.

Pharmaceuticals

Pharmaceutical companies are in a tricky spot. The FDA requires that all reports of adverse effects communicated to a manufacturer are reported to the FDA.Comments made on social media accounts could count as adverse effects notifications that need to be reported.

You’ll notice that Pfizer’s Twitter account is mostly used for outbound news messages from the company. Communication of adverse effects could be a reason why.

Likewise, Pfizer uses its Facebook page to share news with its audience, but the public is not able to comment or post anything on the wall.

There are some very logical reasons why adverse effect reporting isn’t as big of a threat as it may first appear. However, that doesn’t mean that companies shouldn’t be prepared with a plan of how to handle it. If there ever was a need for social business maturity - all departments of an organization buying into social media, from marketing to safety to research and development to legal – this would be a situation that calls for collaboration.

Marketing directly to consumers is tricky, but some drug companies are choosing online and digital marketing to supplement or replace their face-to-face sales efforts when marketing directly to physicians. AstraZeneca uses AZ Touchpoints to engage physicians. Novo Nordisk, which sells insulin and diabetes products, offers medical professionals an insulin measurement app in the iTunes app store. Sanofi-Aventis, Merck, Pfizer, Glazxo Smith Cline and Novartis AG all offer medical-related iPhone and iPad apps to market to doctors.

Insurance Companies

Health insurance

Healthcare companies need to be sure they are not disclosing personal information through social media communications. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) ensures that medical information is kept confidential and protects the privacy of patients. According to Jason Fall’sarticle “Leveraging Social Media in Regulated Industries,” there is a strict, government-mandated approval system for communications with the public. In his post, he points to one social media professional for an insurance company who is taking on the challenge with an innovation approach: Anticipating common questions, she wrote Tweets to be pre-approved by compliance officials so she could still communicate with people in real-time on Twitter.

Insurance (non-health)

Each state has different laws for home, auto, life and other insurance policies. For this reason, insurance brokers can only give out advice to people in the state in which they are licensed.

GEICO and Statefarm Insurance are both very active on Twitter and Facebook engaging with customers. A lot of their Twitter communication focuses on thanking customers for becoming/being a customer or answering questions. With its customer service account, @GEICO_Service , GEICO appears to reply directly to people Tweeting about accidents or flat tires and asking if they should follow up about their claims. I noticed several times they ask for the customers state. They also try to take the conversation offline with an email or phone call.

Spirits

The most important rule that alcohol companies must follow is that they only market to customers of the legal purchasing age, which as we all know, is 21.This is particularly challenging in social media because Twitter, Facebook, YouTube etc. are global platforms. When marketing on your company’s own website, it’s a little easier: You can at least cover yourself on this rule by requiring that visitors fill in a birthdate form. Twitter and Facebook for these businesses are a little more challenging as there isn’t this kind of control.

Maker’s Mark navigates this rule in a way that is responsible and yet fun and consistent with its brand. The phrase: “We’ve never been much for following the rules, but this one’s a must! You must be of legal drinking age to peruse this page” is found on their Facebook page and Twitter.

“We’ve never been much for following the rules, but this one’s a must! You must be of legal drinking age to follow us on Twitter!”

Does this guarantee that all of their fans or followers are 21? Probably not. But just like the aforementioned industries, it’s their way of putting a disclaimer out there that complies with the market they are in.

How to Engage in Social Media as a Regulated Industry

Knowing these rules for your business or client before you establish a social media strategy is key. They aren’t reasons not to participate in social media, just all the more reason to have an experienced strategist guiding you. Some overaching takeaways for several industries seem to be:

1. Take conversations offline - For things like finance, healthcare or insurance, communicating with customers who have questions on Twitter is a great way to be helpful, especially if they are upset. Retaining a customer is, after all, less expensive than getting a new one, and social media is great for this. However, social media isn’t the best for having some public conversations that could involve private information like medical records or bank account numbers. When customer service representatives can take the conversation to another format like a phone call, that’s when they can best resolve any issues.

2. Have a clear-cut social media policy for employees - Zappos is well-known for it’s simple policy of “Be Smart!” Admittedly, that’s our policy at oneforty as well. When more intricate legal implications are involved, you may need something that covers more bases than that for your company. SHIFT Communications offers this PDF template for a social media policy guidelines builder to get you started.

What recommendations do you have for social media professionals in regulated industries? What companies do you see doing this well? Would love your ideas in the comments.