How can social media help advisors' businesses? Over time, those not using it are at a competitive disadvantage.  

The following information is intended to be in a language that advisors understand, accompanied with examples of how to leverage the benefits.  Most importantly, it looks at how social media delivers a positive return on investment.

Here are ten ways advisors can benefit from social media and achieve a positive ROI.

1.    It is inexpensive.  With Facebook, LinkedIn, Twitter and YouTube all free to use, how could one not have a positive return on investment? The truth is, while they are free to use, it does take time to be active, which means a portion of salaries are going to these activities.  There's also a potential opportunity cost if time spent on social media takes advisors and their staff away from more profitable activities. On the other hand, social media might actually deliver a cost savings, replacing some other marketing tactics that are more expensive and less successful.

How to put this in practice:  Most advisors who have used advertising admit it is expensive and rarely delivers results.  In many ways, social media has the same purpose, but can drive more leads, at a much lower cost. (Keep reading for more details.)

2.    It is educational.  Social media helps advisors learn about their industry, their competitors and clients.  With social media, advisors do not have to look for the news, it comes to them.  Plus, it comes to their computer or smart phone in the blink of an eye.

How to put this in practice:  Many think Twitter is waste of time, that it is a world of 140-character messages that are virtually meaningless.  Images of college students tweeting, "I have nothing to wear" or "I'm so drunk at the bar" pop into advisors' heads.  But those kind of messages aren't the only ones on Twitter, as every major news outlet and industry leader likely has at least one account.  Twitter also provides an easy way to see what competitors are saying.

3.    It is viral.  Advisors often get referrals from clients and others who recommend them.  It's also a great way to facilitate discussions, which just so happens to be one of social media's best features.  

How to put this into practice: Social media allows people to spread their ideas faster, and this often results in viral marketing, when one person shares something with their contacts, then their networks shares it, and so on. Every social media tool allows for some type of forwarding.  For example, clients might share a link to an advisor's article to all their connections in their LinkedIn networks.  Other features for sharing are called socialable buttons.  Often one can find these icons at the bottom of an online article.  (Take a look at www.byrnesconsulting.com <http://www.byrnesconsulting.com> for examples.)  Yahoo! Buzz is one tool, where a reader might buzz something up.  As it gets more votes, it draws more attention, increasing its viral effect. Advisors may also want to consider leading discussions on sites such as LinkingIn to increase exposure and build credibility.

4.    It is searchable.  The more active advisors are in social media, the more words they use.  These relevant titles, sentences and phrases are likely what your prospects are looking for when they are searching for answers for a topic or even an advisor.

How to put this into practice: Almost everyone goes online to look things up now, including prospects searching for advisors. As a result, you need to have an online presence.

5.    It delivers credibility.  One important piece of social media jargon is "SEO," which stands for search engine optimization.  Wikipedia defines it as "the process of improving the visibility of a website or a web page in search engines via the 'natural' or un-paid search results."  In other words, social media activities help advisors' Web sites rank higher on Google, Yahoo! and Bing.  Studies show that when consumers are looking for something they rarely go past the first page of search results.  The studies also show, the higher up in the search rankings the more instant credibility a company attains.  In an era of distrust, this benefit can be extremely valuable to advisors.

How to put this into practice: Advisors should search their name or company name and see what comes up.  If one does not pop up at the top, that's a problem, as it can result in a lost lead--and there is no way to track a call that an advisor never gets. When a prospect searches for an advisor, the website does not have to be the only thing that will show up.  Search "Byrnes Consulting" to see how Facebook, LinkedIn and Twitter , among other things, can help a company dominate the search results.

6.    It increases awareness.  An advisor might have the best Web site, but if nobody visits it, does it really matter? Social media allows for advisors to become better known.  They call it the "web" for a reason.  A Web site is in the center, and an advisor's goals are to build as many other connecting webs to the Web site as possible.  The more Webs with activity, the more ways to build awareness.

How to put this into practice: The more places an advisor is online, the more opportunities for the public to become aware of an advisor's services.

7.    It demonstrates expertise. When prospects are shopping around for an advisor, they are looking for an individual who knows what he or she is talking about. Advisors actively using social media will have many more opportunities to illustrate expertise.

How to put this into practice:  Using social media gives an advisor the ability to be seen as an expert on different topics.  The likelihood of getting quoted by the media also increases. Just think about it. If a reporter is under a deadline, which they often are, do they bounce around making ten phone calls to find a source or do they do a quick  search for an expert online?

8.    It allows for interactions.  Social media activities allow an advisor to build relationships before an e-mail is ever sent or a phone call is ever made.

How to put this into practice: A Facebook page can let your brand's personality and core values shine. Pictures on Facebook can humanize an advisor. Posting videos can also be powerful.

9.    It generates more client communications.  Most advisors do not have a significant client retention problem, so the question becomes how to convert clients from loyalists to advocates.   Meetings, phone calls, newsletters and e-mails are  necessities.  Social media just adds another layer of communications that clients might appreciate.  

How to put this into practice: Trying using Facebook to post client pictures (with their permission) from appreciation events.  Keep tabs on what clients are doing, whether it is a son's college graduation or a birth of a granddaughter. Take those opportunities to send a "congrats" card or gift. Monitor clients' likes and, more importantly, their life changes.  A specific example is seeing a new job status on LinkedIn, which might trigger a rollover conversation.

10.  It increases business.  Social media can help advisors save on marketing expenses, create prospect awareness and increase client advocacy. All those efforts can help a business become more profitable.

(Remember that all advisors have different sets of policies based on different interpretations of FINRA and SEC rules, so work with your compliance contacts before using social media.)

© 2010 Byrnes Consulting, LLC All rights reserved. Mike Byrnes founded Byrnes Consulting to provide consulting services to help advisors become even more successful.  On top of social media, his expertise is in business planning, marketing strategy, business development, client service and management effectiveness, along with several other areas.  Learn more at www.byrnesconsulting.com.