News, Vision & Voice for the Advisory Community
Shocking but true: In a connected world, the number of Google hits your firm gets increases your credibility. Social media can help.
May 25, 2010 — 4:22 AM UTC by Mike Byrnes, Guest Columnist
Brooke’s note: If you’re like me, you feel like you’ve heard it all when it comes to social media but you wouldn’t want a pop quiz on the subject. Byrnes seems to sense that feeling in us readers and gives a primer that strengthens our hand. Once you digest this column, try reading Pat Allen’s Five changes to expect in social media in 2010, which is one of the all-time most-read columns at RIABiz.
Social media is not a fad
I am constantly asked if social media is worth the effort, and in 95% of the cases I say “yes.” What I have found is that most advisors know they are late to the party, and are hesitant to jump in head first, without a full understanding what they will be getting themselves into. That point of view is completely understandable and the overriding resistance to modify marketing strategies to include social media makes sense. It sets the stage for this article, which I hope will establish how social media builds credibility, trust and relationships between advisors and their clients.
(The background) Web 2.0 is the cornerstone of social media
When websites first were developed, they were created to give one-way messages to the page visitors. This form of communication is referred to as “Web 1.0.” Websites that have evolved to be able to share opinions and information from different sources are examples of “Web 2.0.” Case in point, an advisor that has a blog that has the ability to allow comments is an illustration of how online communications are starting to flow in multiple directions. Websites that have evolved are seeing more interactions, increased readership (ie. visits) and higher search engine rankings.
Social media isn’t for everybody – but many are using the basics
It is true that not all advisors’ ideal clients are using Twitter. However, many are using LinkedIn and Facebook. Plus, depending on an advisor’s niche, there are usually online communities formed around specific industries and professions (similar to what RIABiz does for advisors.)
Social media helps make referrals stick
Most advisors would agree that a majority of new business comes from client and strategic alliance referrals. But even with those introductions, prospects are going to advisor websites and other online sources to do their due diligence before requesting initial meetings. This online research is not unique to just financial services; it holds true for any sophisticated product or service. Realizing that trend, everyone can agree, the days of prospects going to a phone book to call an advisor are gone, and the importance of a strong online presence is ever more important.
Social media is one element of that strong online presence.
Here’s what a few advisors have to say about why:
Bruce Wiener, principal at Wiener Financial Management, uses Twitter. “It’s a quick and easy way to get your word out,” he says.
Phil Fragasso, president at I-Pension LLC, notes that he sees that Twitter and YouTube videos actually give a spike to his book’s website visits and sales. A free tool, delivering results? That’s a pretty good return on investment.
Social media helps establish brand credibility
Dan Danford, principal and chief executive officer at Family Investment Center, who is active in the social media space, said, “It’s a credibility thing… I can’t say for sure if Twitter or Facebook have directly resulted in new business, but I can say for sure that new clients have let us know that they have researched us on the Internet.”
He also notes that it is nice when his name is searched online that more than one search results show up for his prospects. A simple “Dan Danford” search on Google proved this to be true, showcasing his company website, LinkedIn page (in the directory) and his Facebook page.
Studies have shown that consumers now believe companies with high Google rankings are more likely organizations that they can trust… a nice benefit to have as a result of using free tools, especially during an era when the financial services industry will be dealing with trust issues for years to come.
Social media connects advisors to traditional media
Dan Danford, also shared that his social media efforts give him more credibility with the press, stating that “We are not in the media capital of the world, but we still have had luck getting positive press.” He went on to say, “and I know that the journalists did research online before talking to me.” It is interesting to see that traditional media outlets are influenced by newer social media channels.
There is a risk in being late to the party
It is clear there are benefits to using social media, so why aren’t more advisors taking advantage of these marketing tools? Unfortunately, at some firms, a 140-character Twitter message has to go through as many compliance hoops to get approved as a 4-page brochure. Even worse, some organizations restrict social media sites from being used, as they are worried they can’t control their advisors’ online “advertisements” and “testimonials”.
Even though these hurdles still exist, more and more advisors are discovering that they can work within the rules to use social media to make their practices more successful, retaining clients and bringing in new business.
My final thought is… The social media party has started, don’t be the last guest to show up!
Mike Byrnes founded Byrnes Consulting in April 2008 to provide business planning and marketing strategy consulting services to help advisors become even more successful. Read more at www.byrnesconsulting.com.
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