Executive Summary
As the visibility of social media continues to grow, many advisors have become skeptical about whether it represents a new trend for growing a business that's here to stay, or simply a fad that will soon be gone. Yet the reality is that when done best, social media isn't really a new strategy for growing a business at all, it's simply a new medium to facilitate the same strategy advisors have always engaged in: to become someone that people know and trust, to whom they would be comfortable to refer, and cultivating a network of prospective referrers. The difference is that with social media, the potential exists to reach both a larger and more focused network of potential target clientele, allowing the growth strategy to be implemented even more effectively.
The inspiration for today's blog post is a recent discussion I had with another financial planner, who expressed some skepticism about the relevance of social media for advisors. "People do business with people they know and they trust," he said, "who come to them as referrals or through networking. Not with all this social media technology stuff."
"Actually," I replied, "social media is just another tool to accomplish the exact same thing!"
People Do Business With People They Know And Trust
While it is true that being someone people know and trust is an excellent way to grow a business, the reality is that there are many ways to build trust and rapport. And while in-person meetings and one-to-one relationship building is certainly an option, it is not the only one.
For instance, news anchor legend Walter Cronkite was known for years as "the most trusted man in America" for his steady delivery of news through the difficult years of the 1960s and 1970s. Notably, he retained the image of being trusted and personable, despite the fact that millions and millions of his supporters had never actually met him. In fact, the rise of television has helped to create many trusted experts in various niches, from trusted pet expert Warren Eckstein to personal finance expert Suze Orman - all of whom provide advice that thousands or even millions act upon, even though that trust dynamic was developed without ever having a face to face meeting!
The key point is that broadcasting a one-way message can still be a means to build trust in an audience that listens regularly to the message. Cronkite, Eckstein, and Orman aren't necessarily trusted because they have a two-way relationship with the people who follow them. They are trusted because they open themselves up to the world delivering credible and relevant information and give other people the opportunity to know them.
Fortunately, with social media, there is a platform for any financial advisor to begin building trust with people who may become clients in the future, without the costly investment of a public television show. It's not even necessary to have a reach of millions of people, because unlike Walter Cronkite, the goal is not necessarily to become a trusted and known person amongst the entire American public; it's just to become known and trusted amongst a group of target clientele. By engaging regularly on social media to deliver useful and relevant information, anyone can become a known and trusted expert amongst a group of people with whom they wish to do business.
Networking And Referrals In The Digital Age
Just as social media allows anyone to build a relationship with an audience over time to become known and trusted, so too does social media help to facilitate networking and referrals in the digital age.
In the past, networking meant going out to social events or association meetings that created an opportunity to interact with other professionals with whom business relationships might be developed. In the world of social media, though, the channels of social media themselves provide an opportunity to interact with other professionals and develop relationships, whether it is connecting with someone through LinkedIn or following them on Twitter for some back-and-forth conversation.
Similarly, the world of social media is incredibly supportive of referrals - as anyone who reads content on your website has the opportunity to "refer" it by sharing it on Facebook, Twitter, LinkedIn, Pinterest, or some other social media website. In fact, when a friend asks for a referral, they are often referred to someone's website and social media profiles first - a way to get to know the person to whom they are being referred (and begin building trust) before a first contact occurs.
Social Media As A New Means For An Old Strategy
The bottom line is that what occurs through social media for growing a business is actually the exact same thing that financial advisors already do to develop new clients, it's just by a different means. In the social media world...
- Drip marketing isnt' done through a newsletter, but a blog that is shared through Twitter, LinkedIn, and Facebook
- Referrals happen not by having a referrer hand out your phone number or business card, but by having them direct people to your website and LinkedIn page
- Networking occurs not by driving across town to introduce yourself at a meeting, but by sharing what you do in a virtual LinkedIn group
- People develop a trust relationship with you not by regularly seeing you at social events, but by regularly reading your content on social media
In the end, all this really means is that social media isn't a completely new way to try to grow a business. It's simply another medium for being social, to develop business the same way advisors always have: by becoming someone known and trusted, to whom people can refer, and cultivating a network of prospective referrers. It's just that in the digital age, social media channels create the opportunity to reach far more people, and grow far more!
So what do you think? Is social media a new way to grow a business, or simply a new medium to engage in the same strategies that financial advisors already use? Do you engage in any of these tactics in social media in your business? How does it compare?
I agree 100% with your sentiments. What makes social media so exciting for financial advisors is that they are ‘Ready Made’ for it.
Good advisers have always been excellent at listening, showing empathy and in short, just really good communicators. Social media allows them to communicate on a scale that can bring great rewards.
I believe social media can help to grow the business even in these difficult times. There is enough evidence to show that advisors are now creating new opportunities. The investment opportunity pie is unlikely to get much bigger, however, it won’t be sliced up evenly. As usual, the last to move forward will be the ones with the smallest slices.
Michael,
I agree with your sentiments. However, most advisors I know are not willing to put in the consistent effort to develop an online presence.
It’s sort of like doing a seminar once and declaring that seminars don’t work. Or making 20 cold calls and deciding that cold calling is dead. Social networking is about establishing a presence, not announcing your arrival and going away.
Sometimes we as advisors forget that not everyone is ready or needs an advisor today. It might be 6 months from now or 3 years from now. And when that day comes, you want to be the person that has been in their inbox or RSS feed for the past several years.