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.