Getting Started on Twitter for Investment Marketers: Why?
Sit down for this, but Twitter is a Very Big Thing.
Worldwide, the 140-character social media site has more than 270 million active users. Every single day, Tweeters send out some 500 million tweets. It’s played a part in countless breaking news stories and even national uprisings. For the latest musings from world leaders, business titans or Nobel-winning thought leaders, it is the soapbox of record.
For all that, though, it remains an object of suspicion, even fear, among much of the financial community.
The reasons for this aren’t hard to fathom.
With the possible exception of medicine, no industry is as regulated as finance. Compliance issues hang over every element of communications, with the default setting being extreme caution. Indeed, one financial firm apparently requires eight separate approvals for every single tweet, a process that sits rather uncomfortably with a platform powered by speed and spontaneity.
Despite this, the regulatory environment is fumbling toward greater clarity. Also, a growing number of advisors and asset managers aren’t just adapting to the challenges Twitter poses, they are harnessing its tremendous power to give themselves an edge in marketing, staying abreast of the competition, and engaging with journalists, institutions and customers.
In this post, we’ll provide an overview on why and how investment marketers should consider establishing a presence on Twitter, and, crucially, what’s in it for them.
For those not conversant with Twitter, the first, overriding question will almost certainly be, simply, Why? Why get involved with such a trivial platform, whose very structure precludes in-depth writing? Why risk having your words misconstrued and scattered worldwide in the blink of an eye? Why waste time sharing what you had for breakfast??
Though Twitter is not an end in itself, and should always serve wider marketing objectives, these figures help illustrate its power:
– In a survey from BrandFog.com, fully 82% of respondents said they were “more likely or much more likely to trust a company whose CEO and leadership team engage with social media”.
– A study by Cogent Research found that one in four adults in the US uses social media to help with finance decisions, a figure that rises to one in three for affluent investors.
– The same study revealed that 70% of investors have modified their investment decisions based on information found on social media.
– According to research by financial-software firm Iress, financial advisers using social media for business purposes have seen their client numbers increase by 11% over the last year.
Thus, the data suggests, people aren’t just increasingly turning to social media for financial advice, they are actually forming or altering their decisions based on what they find there.
And while each social media platform has its own strengths and weaknesses, Twitter answers many of the shortcomings of traditional marketing techniques, and provides prospective clients with a platform that, if used properly, can be conducive to building trust:
– Transparent: As a completely public forum, Twitter by its nature makes participants seem more open. Statements there are accessible to all, meaning they must be able to stand up to instant public scrutiny. This imbues tweets, rightly or sometimes wrongly, with added credibility.
– Interactive: In stark contrast to conventional marketing techniques, Twitter allows for, and indeed encourages, conversation. With a field as crucial but frequently confusing as investment, this responsiveness is tremendously powerful in building trust.
– Quick and simple: Consumers have never been more demanding of good service, and are less inclined than ever to unquestioningly accept advice or wisdom issued from on high. Because of its quick-fire, ephemeral nature, Twitter is especially well-suited to providing rapid responses to inquiries and real-time events. And as a means to cut through vast brochures or endless encounters with call centres, Twitter can be enormously attractive to prospective customers.
Perhaps counterintuitively, another big reason for using Twitter is actually risk management. Despite the cold shivers induced in some compliance teams by the mere mention of “social media”, the fact is, as a recent Schroders report put it, that “one of the risks of not being present on social media is not being there to monitor what happens, and thus putting your brand at risk.” Put another way, if you are absent from social media, you’ll be denying yourself access to perhaps the biggest and fastest market research tool the world has ever known. Yes, that will involve plenty of critical feedback, but this is frequently where the most valuable gems of information can be unearthed.
Despite these compelling reasons to use Twitter, the Cerulli Associates’ Social Media Survey from last year found that just 10% of European fund managers say that social media is a “key element” of their marketing strategy (the figure rises to 50% in the US). And even of those asset managers using social media, just 15% actually interact with other users, with the remainder using their social accounts only to churn out content.
Thus, to return to the question “why”, perhaps the most compelling reason is this: For the financial marketer willing to embrace Twitter as part of a broader marketing strategy, a real competitive edge could await. Should you want to find out more about how we can help you tap into that edge, please feel free to drop us a line.