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Investors are influenced by research they find in social media—and companies that reach out can create relationships and a competitive advantage.
Moreover, this strategy is likely to become more, not less, important as younger digital natives become wealthier, because they rely on and are influenced by social media more.
Having said that, it’s a myth that social media is a young person’s game.
According to Cogent Research, 90 percent of high net worth investor groups use social media to inform personal investment decisions, and up to 70 percent have changed relationships or reallocated investments as a result.
If that sounds like an opportunity, it is. Yet many businesses have not integrated social media into business strategy.
This is unfortunate because a company that has direct access to the community can tell its own stories.
Right now, companies that rely on others (like brokers and financial advisors) to share their stories have no control over how it changes through various layers. This increases the risk that key information drops out or is distorted. A direct relationship with the community overcomes that barrier.
Companies need to consider:
One reason businesses don’t leverage social media is because many senior decision-makers in regulated industries still believe it’s entertainment for kids—a fad, destined to pass.
Instead, these are some of the facts:
Unfortunately, the myths have become entrenched, meaning many businesses have failed to adequately invest in social channels.
Do the relationships formed in social media matter? Absolutely.
The Edelman Trust Barometer, which in 2014 surveyed 33,000 people from 27 markets, has recorded a decline in trust over many years in institutions and leaders; at the same time it shows high and growing levels of trust among peers.
Personal recommendations are important whether they are face-to-face or virtual. Already 72 percent of consumers trust online reviews; but if the buying preferences of millennials are something to go by, this will grow.
New research by Bazaarvoice and Kelton Research shows millennials trust the expertise of strangers even more than that of family and friends. What expertise is that? User-generated content.
That business is you.
Those professionals who diminish social media because they say they and their peers are doing well without it need to consider what is coming over the hill.
The billions of new consumers about to enter the market have never lived in a world without it. They are social-first and will expect to find you on these platforms as a default.
Do you really want to risk not being there or giving a competitor that advantage?
In the US nearly 10 percent of all affluent investors are under 30 and yet lack even basic awareness of financial institutions such as mutual fund companies. Investor Brandscape found investors over the age of 30 were 9X more likely to develop relationships with asset managers via social media than the over-30 group.
Additionally, they were twice as likely to depend on advisors for recommendations because of their lack of experience.
Industries will need to rethink the relationship with social media and how it can be used strategically throughout the business to:
It matters now, but it will matter even more in the years to come.
Visit our website to learn more about using social to sell, or download the free e-book.
