feed is an invaluable resource for a business, but the challenge for most businesses is gaining access to the newsfeed in the fi rst place. While a marketing professional may be better suited to provide specifi c examples of tactics that a fi nancial fi rm can use to gain followers, there are a few general principles that should guide the process. Do Not Use
Social Media as a Direct Marketing Platform. People who use social media platforms are engaging these networks for a reason, whether it is to keep up with high school classmates, to network with potential employers, or to discover what Kim Kardashian had for breakfast. They are not using social media to be inundated by offers for credit cards or home loans.
These are the type of status updates or tweets that usually discourage potential or current followers. In contrast, people tend to follow, share, like, or retweet 23 posts that align with and/or help promote the individual social media user’s “brand.” People engage social media to share information about themselves with their networks, so the information must strike a
Chord with that user Therefore it is important
that fi nancial services companies make themselves useful to the individual, rather than attempting to force feed their information to current or potential followers. Give Your Followers What They Want, Not What the Company Needs to Push Out for Marketing Purposes. As discussed earlier, one goal of social media could be to satisfy social needs rather than economic ones. This means that companies should not clutter a user’s valuable newsfeed
space with promotions. Instead, tailor the company’s message to what the user needs. Example: If a community bank exists in a neighborhood with a lot of young families, the bank should consider sharing trade journal articles about saving for college with its followers. This will be more effective than trying to directly sell its 20-year certificates of deposit or high-yield
savings accounts to its followers. The sharing of helpful information is an approach that will put the bank on followers’ radars, while also allowing the bank to show its “human side” (rather than being seen as solely driven by turning a profit). If a follower enjoys the article and “likes” it or comments on it, then the bank has begun to foster a relationship that might lead to more business in the future or even recommendations to friends in the community. As a
Recent study has shown percent of U.S. Twitter
users are more likely to recommend brands that they follow and 67 percent are more likely to buy from brands that they follow. 24 Furthermore, most people place more trust in the recommendations of their own friends and family because they are familiar with their tastes and proclivities. It can be a powerful endorsement for a company if someone’s friend and/or family members choose to “like” a particular brand or write a positive review on Yelp. In the
social media age, a company’s most powerful advertisement might not be the creative or funny commercial that cost thousands of dollars to create; rather, it is the “word-of-mouth” endorsements that can spread quickly and cheaply through individual followers’ social networks. Regulatory Concerns. While the newsfeed is an invaluable resource for financial
services companies, there are also important regulations limiting what such companies can say on these platforms when they are used for branding or advertising purposes. Similar to any other communication from a financial firm, all social media communications must conform to the anti-fraud provisions of the securities laws and, potentially, those of the Federal Tfashion, fi nancial fi rms pursuing a private offering of securities must ensure that their social
Media use does not violate the ban on general
solicitations (at least as it exists currently pending rules pursuant to the recently-enacted employees engage in social media for business purposes, the most troublesome risk of using social media updates for branding or advertising purposes is that the fi nancial fi rm will violate applicable supervisory resocial media realm into “static” and “interactive electronic” forums for registered broker-dealers. If the communication is “static”—such as a Facebook or
a LinkedIn profi le—then it is considered an “advertisement” and requires principal approval prior to use. 30 If the posted content is non-static, reamost revolutionary aspects of the platforms. On Facebook, there are pages that “allow organizations, businesses, celebrities and brands to communicate broadly with people who ‘like’ them,” while groups provide a
closed space for small groups of people to communicate about shared interests.” 40 The group functionality on LinkedIn is very similar to Facebook’s model; however, it tends to revolve around the user’s industry or educational connections. For example, LinkedIn has a social media law group through which lawyers and financial professionals are able to share articles and discuss recent developments. Twitter groups are more informal; they are formed
Conclusion
by users who generate tweets and include a similar hashtag. 41 Perhaps the most dramatic display of the power of Twitter groups occurred during the “Arab Spring” as protesters across the Middle East used short tweets with an attached hashtag that were easily searchable by fellow protesters who wanted to join in or follow the growing movement. 42 Closer to home, the 2012 presidential election also inspired a number of social media groups that the candidates used to organize supporters, spread their policy agendas, share daily campaign
videos, and even to fundraise. 43 These types of communities existed online previously, in places like chat rooms and message boards. But the power of social media is that from one platform, a user can be a member of multiple communities at once, without having to go to multiple sites. Thus, social media groups or communities have enabled mass collaboration on a scale that has never before existed. With the click of a mouse, a person can be connected t
o multiple networks of like-minded individuals with whom that person can share ideas and get feedback in real time. Additionally, these communities of friends, or merely like-minded people, can become trusted sources for news, reviews, and recommendations for productsl-time communications such as a Facebook wall post 31 or a responsive tweet—then the information does not need prior principal approval but it should be supervised by the fi rm.
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