The social media real estate you put time into is as important as the suburb you invest in. The right place at the right price is what gives good returns.
For time-poor professionals looking to start out in social media the sheer number of platforms to choose from can feel overwhelming – LinkedIn, Twitter, Facebook, YouTube, Pinterest, Google Plus? It’s a bit like selecting the ‘all suburbs’ search when you are trying to find somewhere to live.
While I am loathe to suggest one platform to the exclusion of others (because together they create an amplification effect) if you’re a professional or need to reach high net worth individuals then research suggests that a great place to live is LinkedIn.
A recent Cogent Research report found that of the 90% of high net worth people who use social media, 73% spend it on LinkedIn (Facebook, Google+ and Twitter make up the rest).
They use social media to inform finance decisions and are considerably more involved in their investments than others.
Why are they using it?
Affluent investors use LinkedIn for a number of reasons:
- To do research
- To form connections
- To establish mutually beneficial business partnerships.
If that sounds pretty much like what you already do day to day, that’s because it is.
The difference is that while you currently move up and down your local equivalent of Wall Street and are introduced to people you want to know by those you do, LinkedIn creates a business network that is effectively borderless.
Algorithms bring people with shared interests together from around the world and so reveal sweet spots of mutual benefit that you would not have realised were there. That’s the magic.
Do these relationships count?
They really do.
The Edelman Trust Barometer, which is in its 14th year and in 2014 surveyed 33,000 people from 27 markets on trust, has recorded a decline in trust in institutions and leaders around the world over many years. At the same time, it shows high and growing levels of trust among peers.
The conversations we have with people influence what we think and, ultimately, how we behave and that is regardless of whether they are over coffee or through clicks.
For example, the Cogent data showed that over a third of affluent investors are using social media specifically for personal finance and investing purposes and that 70% changed relationships or reallocated investments as a result of content they’d found in the networks.
Advisors are getting onto this and it works. According to a joint Putnam-FTI Consulting Survey of Financial Advisors’ Use of Social Media nearly half of advisors using social media for business acquired new clients through social networking.
Understanding why and how investors use LinkedIn makes good business sense.
So let’s hone in a little more closely on what they are doing.
According to Cogent, the ultra-affluent are passionate about high quality investment research and are finding it on LinkedIn and Facebook more than anywhere else.
This research informs and influences their buying decisions, much as social media conversations do in other areas.
If it’s important for you to reach this group, then you need to consider how you are using LinkedIn:
- Is your product or service of interest to affluent investors?
- What high quality information do you already generate that may be of interest to them?
- Do you share it on LinkedIn?
- How do you form relationships with those who read it?
- Are you extending the connections you make through the network by bringing them offline?
- What is your strategy for generating future content?
- Do you have a LinkedIn Company Page?
Like traditional business, online business is about forming mutually beneficial relationships and here again LinkedIn is a great matchmaker.
While the Cogent report found that 46% of investors who used social media did not have a financial advisor, 52% said they would connect with an advisor through social media.
A further 28% of investors said they would see a financial company as “innovative” or a “leader in the industry” for offering social options.
In the US, most Fortune 100 companies use social media and, according to LinkedIn in 2013, all executives from Fortune 500 companies were members of LinkedIn.
The FTSE100 Social Media Index shows 86% of FTSE100 businesses using LinkedIn as part of their communications strategy.
Last year, research by Web Profits on the social media activity of Australia’s top publicly listed companies found almost half the top 100 companies don’t bother.
But many companies are already using LinkedIn to raise their profile and reach very specific targets.
- For example, derivatives exchange Eurex used a global social media communications strategy on LinkedIn to gain exposure to 800,000 finance decision makers.
- Zurich built a thought-leader campaign around its Head of Financial Institutions, which delivered a strong flow of high-value sales leads and a click-through rate three times the LinkedIn average.
- Oppenheimer Funds gained 3.3 million impressions and more than 11,000 clicks, raising its brand with Financial Advisors through association with the LinkedIn iPad app.
Investors are also turning to LinkedIn to find new ideas and synergies, to create business partnerships or even undertake equity capital raisings.
Equity-based crowdfunding is often discussed as an alternative to venture capital for small to mid-size firms which Deloitte believes will grow rapidly. While you can crowdfund in Australia you need to be aware of the limits around activities regulated by ASIC. Paul Niederer outlines changes he believes would better enable Australia to embrace equity crowdfunding in the future.
The rise in social media adoption among the affluent is expected to continue as investors from Gen X and Gen Y make up a growing portion of the affluent population.
Secure your digital real estate and learn how to build on it.
Five professional tips
1. A lot of people ask whether they should reciprocate endorsements. If you’re active on the platform you’ll learn quickly that random people you’ve never met are happy to give you a big tick. The simple answer is no.As social media lawyer Jamie White (Pod Legal) says, “displaying a false endorsement or testimonial on your website, or anywhere for that matter, could amount to misleading and deceptive conduct.”
2. Whenever you meet someone new immediately follow up with an invite to connect on LinkedIn. Forbes writer Ken Rogue says a typical sales cycle requires six contacts with a prospect and this extends the contact relationship immediately.
3. Use a professional headshot. Blurry snapshots are a no-no here.
4. Be aware of your regulatory environment but not afraid of it. Regulators around the world acknowledge the power of social media for business and have an important role in balancing innovation and protection. This space is evolving all the time. In Australia the ASX encourages companies to monitor investor blogs, chat-sites or other social media and the ACCC has developed social media guidelines.
5. Makes sure you work through the details of who owns your social media accounts with your employer. This is best done at the front end of the contract.
Dionne Kasian-Lew is the CEO of the Social Executive®, an advisor to boards and senior executives on digital and social media rated in the top 1% for global community influence by Kred. Her latest book The Social Executive – Why Leaders Need Social Media and How It’s Good For Business (Wiley) is available for pre-order.