By John C. Drachman

With an open mind, a sense of experimentation, and a relatively small budget when compared to traditional marketing, smaller firms are finding themselves rewarded by fresh attention to their ideas and products through social media initiatives.

New strategies link small businesses to clients

For managers between $25 million and $1 billion in assets under management (AUM), social media marketing and networking offers the prospect of heightened media bandwidth for a lower cost than more traditional advertising programs.

The University of Maryland’s Smith School of Business looked at the relationship between social media and small businesses and found that the technology adoption rates in the U.S. have doubled in the past year from 12% to 24%.

Small is still beautiful

The data, undertaken by the University, is based on a December 2009 telephone survey of 500 small business owners. Adoption rate calculations are compared against a baseline report conducted in December 2008.

The study concludes that nearly one in five small business owners are integrating social media into their business processes — Facebook and LinkedIn were the most popular sites. In fact, 45% of surveyed respondents even believe their social media initiatives will pay off financially in 12 months or less.

Deploy more with less

If you have a small financial services firm, perhaps you have made decisions about adjusting your staffing and business model to the challenges of the current environment. Social media programs provide a way to deploy more resources and effort toward your distribution and marketing efforts without heavy additional costs

Even in uncertain recovery, many smaller businesses like yours are committed to expanding their presence, yet have little appetite for going back to business as usual.

The pattern that characterized the emergence from similar market environments in the past is not being repeated. The cycle of downsizing and staffing up has been altered as executives look to more efficient ways to motivate purchasing behavior through new combinations of technology and communications.

This article is a summary of an excerpt from “An Introduction to Social Media: A Guide for Smaller Money Managers.” Authored by R. Jeffrey Young, Huntington Asset Service, and D. Bruce Johnston, Advisolocity, downloadable copies of this report are available at http://www.advisolocity.com/huntington/

By John C. Drachman

From Sugar Land, Texas to Atlanta, Georgia, financial advisors like Curtis A. Smith and Russ Thornton are finding that attracting new business in cyberspace can be as carefree and neighborly as Facebooking friends about the local sports team.

FAs Are Making a Bigger Splash with Social Media

Advisolocity President and CEO, D. Bruce Johnston interviewed the two professionals recently for a BrightTalk webinar on “Linking Twitter, Facebook and LinkedIn to Maximize Business Growth.”

The two said they have attracted new business to their firms by successfully building out their local presence with social media over the past two years.

For Curtis, the stated goal in the beginning was to achieve a #1 Google page presence for his products and services in the Sugar Land Texas region. “I found that Facebook friending in my community was very important,” he said. By knowing more about a prospect’s background, interests and hobbies, he has been able to achieve more relationship depth faster, he added.

Russ Thornton said, “Social media helps you better identify the people you should be talking to. It also provides you with more information about them to better prepare for a meeting.”

“However,” he added, “It’s important to remember you can’t just stay online. I believe strongly in getting out in the community and meeting people.”

Making client contacts outside of a community is possible, Russ noted, “as long as your client has some flexibility as to how much of their business can be conducted over the phone and online.”

To Bruce’s question about how important maintaining a structured marketing plan was to their efforts, Curtis said, “I don’t need a big, elaborate marketing plan. Social media levels the playing field and creates your presence just by you using it.”

Russ added, “It’s hard to know where to spend your time and money. Social media is proving to be the low cost dynamic way to put yourself out there and raise your profile.”

What about industry colleagues who are not ready to try social media? “They are making a big mistake,” Curtis said.

By John Drachman

“I don’t understand  about contact capture — I just need client acquisition.” (Overheard from a discussion between two financial advisors.)

An important part of any growth strategy is having the capability to reach out and attract new interest.

To promote products and services through traditional marketing venues, marketers face a task that can be time-consuming, expensive and perhaps annoying for recipients of a message. Think of paper-based direct mail.

Client acquisition's new best friend: Social media

On the other hand, social networking, participation in blogs and discussions groups are easy for prospects to engage in without having to make a commitment — until they are ready. Meanwhile, the link between a prospect and a product has a chance to strengthen over time. The decision to receive a message is elective; the prospect has a choice to engage in the communications — or opt out.

Simply put, low cost social media efforts act like a 24/7 business development machine for financial advisors and money managers on a budget.

If you are thinking about setting the stage for undertaking your own social media initiative, Advisolocity’s latest webinar, “Where Social Media Meets Client Acquisition,” can help. It aims to answer questions like these:

• What’s the minimum effort required to undertake a social media effort?
• What is the single best social media thing  you can do to improve client acquisition?
• What are the steps that lead from capturing contacts to actually acquiring clients?

To see  how easy-to-use, low-cost social media programs are helping asset managers and advisors stand out in a crowded market, view “Where Social Media Meets Client Acquisition.”

Distribution media consultant D. Bruce Johnston announced this week the March 1 launch of a new strategic, creative service dedicated to thought leadership messaging strategies for advisors in transition.

“First: It’s about each advisor, their vision and the clients they serve. It’s about building conviction and consensus around their story,” Mr. Johnston noted.

Where social media meets breakaway brokers

“Second: It’s about speed to market when nothing less will do. Advisors will find they can actualize their vision with Advisolocity faster and more cost-effectively than with conventional agencies.”

Third: It’s coming to the RIA world March 1.

Zach Hedges, project developer, added that his prospects and clients were increasingly demanding a more intense focus on blending low-cost solutions into the messaging mix. “Social media is like free air time,” Mr. Hedges said. “No entrepreneur can afford to ignore free exposure. Thoughtful decision-makers are finding that social media strategies quickly reward them with low-cost, creative strategies that make it easier to attract and retain clients and assets.”

In the meantime, advisors are invited to contact the Advisolocity team at this link to discuss their current situation.

Being a thought leader may be easier than you think when you identify your unique characteristics and articulate them to your constituency.

In preparing an investment policy statement or proposal, how much would it be worth to you to have access to a reliable record of a prospective client’s likes, dislikes and goals?

It only takes minutes to sign up for social networking

In a similar vein, when an advisor knows a prospective client’s social networking interests, they will likely uncover a rich source of voluntary, accurate and timely information at their fingertips — market intelligence that may well have a place in a closing presentation.

Advisors who wish to untap the market intelligence in their prospect’s social networking habits should consider trying four steps to testing the social media marketing waters for themselves.

1. Engaging your audience It takes only a few minutes to sign up and gain access to most social networking sites. Whether you are preparing for a family office meeting or an institutional presentation, knowing more about the influencers and decision-makers in your proposal approval process can prove invaluable.

2. Identify and articulate your areas of thought leadership What are the particular challenges your prospect is confronting that can be met by your professional expertise? Establishing thought leadership expands an advisor’s presence, while accelerating client qualification. After drafting an article about the refundable AMT credit that was mostly overlooked in last year’s stimulus bill, one advisor we know posted the article through a number of blogs dedicated to financial social media marketing. The effort resulted in many repeat visits to his web site, requests for more information and increased business.”

3. Expand your presence Many financial advisors are turning to public domain blogging tools like WordPress.com and BlogSpot.com to establish their own thought leadership networks. Here, an advisor can post articles, as well as third-party information feeds. We’re also hearing from advisors who are keeping their thought leadership expertise separate from their product and services. This facilitates the compliance review process as well.

4. Distinguish yourself By taking the time to learn more about your clients through their social media preferences, you show them a new type of earned respect for their interests, challenges and communications preferences.

While many of your competitors rush to catch up with the promise of financial social media marketing, you can solidify your advantages now with the occasional tweet that suggests ‘FYI, I thought you would like to see this recent article… I would welcome a comment from you on my blog.’

John Drachman is a creative social media professional, who specializes in investment marketing, social media, writing, web design and development.