Social Media is NOT like the yellow pages: a counterpoint for financial services

A recent post on everdaytenacity.com contended that social media is like the yellow pages. It also implied FINRA regulations and a lack of ROI will turn social media into a fad. The piece advocated going “back to events” and concluded by stating that “moving the relationships beyond just investment advise will beat those firms that focus their efforts solely on social media.”

I have a growing sense too many people in the investment and wealth management communities agree with statements like these and I think they’re absolutely dead wrong virtually right down to the last bullet.  Let me say this about events before I move on: I do agree events can be a powerful marketing tool. The problem, though, is too many events are far too generic (e.g., ” Golf Classic.”) and too many pretend to be about education or client recognition when they’re primarily prospecting tools. Being a prospecting tool is perfectly fine—when it’s “sold” as such and done without high-pressure tactics. Even brand-building events like golf events broadcast on TV can be powerful when they’re combined with cause marketing in an area the company actually cares about (e.g., more than 40% of American Century Investments’ profits support the Stowers Institute for Medical Research and their golf tournament raises money for LIVESTRONG, the Lance Armstrong foundation which also raises money for cancer research).

Here’s the missing key: social media marketing is about a conversation designed to build relationships without an immediate expectation of financial return. Yes, ROI matters, but social media marketing success is not measured the way quarterly investment performance is measured. In addition (and as I’ve said before) the world is increasingly online. The word “Crackberry,” for example, wasn’t created out of thin air. The savvy firms of today who truly know their clients will know their interests, their needs, and their unspoken wants. Meeting them out where they’re at online is part of where we’re headed. Much like the way luxury cars meld into a world of sameness, events, TV ads, and websites for most financial firms do the same.

There is such an opportunity for savvy, talented financial advisors and financial services firms to stand out from the pack. Doing so starts with solid product performance, of course. Social media usage will make a difference when it’s done as a genuine commitment to make a tangible difference with a targeted clientele. People are hungry for firms they can trust and for usable information they can trust. Social media can help satiate that hunger in a powerful way—if it’s done the right way. If not, the team at everydaytenacity is absolutely right: it’s hype that takes an undue amount of time. I think we can do better.

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