As social media usage continues to grow amongst financial advisors and their prospective clients, advisors are growing increasingly interested in whether spending money on social media advertising can provide a good return on investment to amplify their digital marketing results. Because, as I’ve learned myself through many years of testing and experimenting with social media, while it can be a powerful tool, it can also be easy to waste money if not done properly.
In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we explore how financial advisors can use digital marketing and social media to grow their business, and particularly why it’s important to have a clear understanding of what you are trying to accomplish in the first place (e.g., awareness, engagement, or acquisition) in order to get a good ROI on social media and other digital advertising!
When it comes to potentially spending on social media advertising, the first question to consider is what, exactly, you’re trying to accomplish. Because the reality is that digital marketing, like any kind of marketing, is actually a multi-step three-phase process: Awareness, Engagement, and Acquisition. The Awareness phase is simply about making people aware that your business exists in the first place. The people you reach are not necessarily ready to do business with you, but you want to make them aware that you exist. The Engagement phase is where you try to actually help a prospective client begin to know, like, and trust you… because as the famous saying in the marketing world goes, people need to engage with your brand 7 to 9 times before they’ll be ready to do business with you! The Acquisition phase is where you actually try and acquire a client, where you transition from marketing into the sales process, because the prospect is ready to do business, is interested in doing business with you… and now you just have to convince them to actually take that action.
These phases (Awareness, Engagement, and Acquisition) matter in a social media context, because they influence what you are trying to do through social media in the first place. For instance, if you broadcast useful content on Twitter or via Facebook, its very effective for building awareness, so it may make sense to spend some dollars to try to further build your audience. Particularly on Facebook – with their ad tools specifically built to help you target people who are not already following your page but would likely be interested in learning more about you with.
However, building awareness alone isn’t enough to actually get new clients, and no one will ask you to manage their life savings based on even the wittiest of 280-character tweets. You actually have to engage prospects in order to get them to know, like, and trust you enough to want to do business with you. On social media, engagement means doing something that prompts people to take a further action, from running a TweetChat on Twitter or asking a provocative question to stir conversation on Facebook… but the key is that you have to get them to do something. Which you might then pay to promote (e.g., a particularly popular tweet, a Facebook article or survey that you pay to boost), though these still aren’t necessarily big ad spends, because you may only be spending to promote to the audience you’ve already built.
The third part of the funnel is acquisition, where a different set of strategies are relevant. This is the domain where very targeted ads, that really invite people to actually hire you and do business with you, can work. But this still doesn’t mean just plastering ads out for the whole world to see. Your targeted messages should go to the people who are already engaged with you… such as paying to target a particular offer or invitation to do business with you sent to the already-engaged audience that has ‘Liked’ your Facebook page. But it’s not about asking people to ‘Like’ your Facebook page at this stage; you’re paying to an offer in front of them to take a next step towards actually becoming a client of yours!
Ultimately, though, the key point is to recognize that any digital marketing advertising you do has to align with what you’re trying to accomplish. There are lots of strategies which may or may not be effective – from keywords and organic search, to SEO and retargeting (all discussed in greater depth in today’s Office Hours below) – but the key is that you need to do more than just throw ads out into social media. Digital advertising can work great, but it’s almost never about sending out a magic ad or Tweet. You need to build awareness, find ways to engage your audience, and then prompt them to take action that allows you to acquire them as a client. If you don’t have a well thought out process, digital advertising will likely not provide the return on investment that you want!