Grow Your Business With Social Media

November 28, 2011 at 07:00 PM
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In my years of experience working with investment advisors, the No. 1 way new clients are acquired has consistently been through referrals. Referrals come through a variety of methods ranging from a passive recommendation from a happy client to actively asking clients for referrals.

Today, information is exchanged through ever-evolving and rapidly expanding social networks. As an avid Facebook user, I often find I know more about what is going on with a friend that lives 1,000 miles away than I know about my own next-door neighbor. As we are able to connect with each other using social media, we quickly find that a good percentage of our time spent online is in a social realm. In certain situations, social networks have become our preferred communication and stay-in-touch method. As a result, this has created a huge opportunity for advisors to connect with existing clients, seek out referral opportunities and grow their business.

For most advisory firms, social media is used by your target market. In the market segment of consumers age 55 and older, over 27.4 million individuals indicated they use social networking, according to comScore, a digital measurement company. Even more staggering, Pingdom.com studied data from Google Ad Planner and found the majority of social network users are individuals over 35 years old. For many advisors, professionals 35 years and older represent their target demographics. Instead of social media, think social marketing.

In fact, social media is on fire when it comes to client acquisition. Advisory firms using social media are growing faster than their counterparts not using social media—three times faster in terms of annual revenue, AUM and client base, according to Aite Group's Q4 2009 Advisor Survey.

What is driving this growth? Social network referrals. Hopefully, you are now asking yourself, "How can using social networks lead to more referrals? How are firms using social media growing three times faster?" The answers are easier than you might imagine:

Set up your profile on the social networks. Take the time to set up your profile on Facebook, LinkedIn, etc. Make sure that as you do, you hook in your compliance archiving tools and that what you are doing complies with your firm's social media policy.

Connect with your clients on social networks. Do a search for existing clients and extend an invitation for them to join your social network.

Review your extended social network connections. When your clients accept your invitations to be part of your social network, you will have the ability to review their connections as well as the groups to which they belong. In reviewing this list, you will be able to quickly see and determine which individuals you would like to meet via an introduction by your clients.

Ask for the introduction. Knowing your clients' connections allows you to be very specific when you ask for a referral. As an example, you could say, "I noticed on LinkedIn that you are connected to John Doe. I have been trying to figure out a way to introduce John to our services. Would you be willing to introduce me to him?" It is no longer a generic request of "Can you provide me with any referrals?" It is a targeted request that does not leave to chance whether or not the potential prospect is a fit for you and your firm.

Now that you see how easily social media can be used to gather referrals, it's even more exciting when you realize that most of your competitors are not using social media. Again, the proof is in the numbers: A survey by the Investment Adviser Association, ACA Compliance Group and Old Mutual Asset Management found that two out of three firms say they have a social media policy, however, 83% of those firms do not even maintain a corporate social networking site. In other words, their social media policy is most likely not to participate in social marketing at all. Therein lies the true opportunity.

As you take these steps to move your firm into using social media, you will find that asking for specific referrals becomes much easier, and your firm's growth will be rapid. In addition, it will allow you and your firm to communicate with clients in a format they are most likely participating in already. It's time to take the leap and jump on the social media bandwagon.

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