The rationale was that the young MBA kiddies think that social media will fix all problems and the older senior managers are scratching their heads and scared because they understand the word media, but are confused by the word social. That at least was my own interpretation of the article.
"They need to put on their Usain Bolt tights and start running"
Because this is my blog and in my blog I am all knowing, I can emphatically state that both the MBA kiddies and the older senior managers are wrong.
There are two things social media has going for it from a business perspective that sets it head and shoulders above anything else we've had to date.
1. Ease of contact
2. Ease of due diligence (Yes, yes, yes I do sound like a consultant)
Ease of Contact
Let’s take that first. For anything to happen in any business relationship (particularly in financial services) somehow contact must be initiated with a prospective client. Sounds obvious, but all of us who have been in front line sales or managerial positions know how darn difficult that is. Prospects are often guarded and defensive against sales approaches, they can also be outright aggressive. They can duck, they can weave and be very difficult to pin down.
So how do businesses initiate that all important first contact? When it comes to financial services these are all the traditional ways: Advertising, direct marketing, cold calling and employing sales people with an existing “network” of prospects.
I will really sound like a consultant now, but only for a bit and I’ll only charge you £5 000 for the next paragraph. You can pay by clicking here.
In any sales process you move prospective clients down a funnel, which is designed to end up with a sale (told you I'd sound like a consultant). Basically in that funnel you take the prospect from initial contact to a closer and closer relationship, creating enough trust to come to a deal. Make sense right?
(Disclaimer: You do know that I mean a metaphorical funnel don't you? What with this being the internet I never know if you readers are drunk, high or otherwise disturbed. So please do not place your prospective clients inside a real proper funnel... unless they play rugby, which means they might actually enjoy it).
On a cost basis comparison social media is hundreds of thousands of Dollars, Euros, Swiss Francs, whatever cheaper than hiring an expensive individual with a great existing contact network.
It’s also a lot less riskier, because it’s the company who controls and owns the prospect list on social media. A salesperson can’t exactly just walk off with several thousand prospects who are following a company on social media.
As for the legal argument? I will blow a raspberry the size of Wales at anyone who says that it is problematic from a legal and compliance perspective. It is not. If anything the corporation has control and oversight of all interaction AND it is all on record.
Will there be mistakes? Of course there will, because cockups happen in any business. It’s part of doing business, just ask Jamie Dimon of JP Morgan Chase. He and his minions didn’t need social media to rack up $9 billion in legal fees and a further $13 billion in settlements.
Ease of due diligence
Clients and prospects do their homework these days. They really do. It’s not just enough that you turn up clean shaven grinning with a smile on your face. The likely hood is that your prospect has already checked up on your company and your employees on the web, before the first meeting. When you step through that door to shake hands you aren’t making a first impression, you’ve already made it, online. If you’re a senior manager, you might want to ponder a bit on that last sentence.
Social media allows the prospect, in their own time, to form an opinion of the company and the person(s) representing that company. As for the company, social media gives an excellent opportunity for it to craft exactly the kind of public image it wants.
Back to the prospect
So let’s get back to the prospect. Those companies that are on social media and know what they are doing are at a huge advantage when it comes to new prospects. They can initiate contact quicker than their competitors. They can get the conversation going before any of their competitors (provided they have a believable presence on social media)
I already know their interests, what type of person they are and the clear mutual interests we have. What’s more they are people I genuinely want to sit down with and discuss business.
This brings me back to the beginning about both the MBA kiddies and senior managers being wrong.
Nothing will ever beat face-to-face contact, but how do you get to the face-to-face? Social media allows all parties to scope each other out without stress and form a first impression. That's powerful stuff indeed.
I guess my point is this: Andrew Hill stated that “leaders need trust more than Twitter” which is absolutely true, but building a path to trust is a long process. In today’s world that path begins on a super highway known as social media.