30 Apr Should Financial Planners bother with Social Media?
Two weeks ago a heated debate kicked off on a LinkedIn group for financial planners. The argument centered on whether social media is an effective and efficient way to generate leads and acquire new clients. This is what one member said…
“I must have spent hundreds of hours on social media and maybe one or two clients came to us who wouldn’t have otherwise but that’s a rubbish return on my investment.” Steve Laird – Carrington Wealth, Belfast
Is Steve’s experience representative? Is he right that social media is a poor investment. Before Pocket Risk I spent four years working at Facebook convincing companies why they should invest in social media but its rewards are not the same for everybody. Below I investigate whether social media is a good investment for financial planners.
Getting down to business
From a business perspective you should see social media as just another channel to acquire customers. Just like direct mail, running seminars or radio ads. Each channel has its unique advantages and it’s your job to work out what it most effective given your business circumstances.
The first principle of marketing is to go to where your customers spend their time. Why do you think financial planners across the country spend so much time at commerce chambers or building relationships with solicitors? That is where they find new clients (at least offline).
The beauty of Facebook is its size. It has over 1 billion monthly users (27 million in the UK). There are a number of tools (ads and pages), which you can use to target small niches.
However, Facebook is not really a place where people think about or seek advice about their financial situation (at least not the people I assume you are looking for).
Facebook is best used to share and disseminate information. If you have created some useful content that you believe people would like to consume then Facebook is a good place to share it.
Just like Facebook, Twitter is huge but it doesn’t have the targeting capability of Facebook. Finding your ideal client is a challenge.
That being said it is easier to build relationships with new people on Twitter. I’ve seen previously unknown individuals become Twitter famous by connecting with influencers and adding value to the network (typically through content).
Even though LinkedIn is not as big as Facebook or Twitter, it is a professional environment. There are many LinkedIn groups, which you can join that will fit your target demographic. There are groups for solicitors, dentists, entrepreneurs and many more.
One of the ways I generate leads for Pocket Risk is joining these groups and helping people. I’ve built spreadsheets to help people complete complex calculations and shared my opinion on ISAs vs pensions. Eventually, people wonder who you are, look at your profile and some become leads. In your head is information that people crave. Share it with the world and I guarantee good will come from it.
What about ROI?
Measuring the value of social media contrary to popular belief is not difficult (I will show you how in a future post). What is difficult for people to stomach is that work today may not see a return for weeks, months or even years. If you are short minded about your business then social media will not work for you. The returns to be had will take a considerable amount of time and effort.
Steve who I quoted above invested hundreds of hours and saw little return. Was he consistently doing the right thing and measuring it correctly? Did he quit too soon?
It’s important to remember that social media is a channel. You must have something interesting to share. You wouldn’t expect a seminar with potential clients to be successful just because you held a seminar. Nor should you expect social media to be successful just because you sent a few tweets and commented on a post.
So should financial planners bother with social media? My answer would be no unless you are willing to create interesting content worth sharing and are comfortable not seeing a return for weeks, months or even years.