Get Them While They Are Young Social Media and Customer Service at Retail Banks

Social media has become a pervasive channel of communication for sharing information and services. In this study, we explore a novel dataset of bank-customer interactions via Facebook and Twitter from a large retail bank in Brazil. The data show that social media customers are on average younger and have a lower income, but they contact the bank more often over time and display a sharper increase in product use than traditional communication customers. We also use a stylized model of relationship banking and regression estimates to illustrate how banks lock customers into sequential interactions through social media.