why

The financial industry is intensely regulated and many of the players have procrastinated about their social media strategies. I guess part of what is going on is that many financial services firms are just buying time. The regulatory limitations may be nothing more than just an easy excuse for holding on to the status quo for now. Take a close look and you will see that these rules are quite reasonable. They essentially about protecting the man in the street from making mistakes with products he may not understand enough to make a rational decision.

What regulators are always trying to curb is misleading information. In the financial industry, much of that information is about investment returns and definitions of risk. In other words, it is mostly about the moving pieces of the overall value proposition.

But financial services firms are missing out on a very big opportunity!

Strip away all the things regulators don't want you to say and what is left with is the essence of what your business is all about. What people really want to hear about are the things a company stands for. Something they can relate to. They want a role model. Something they would be proud to share with others. A place where they will feel satisfaction when they spend money.

Let's face it, now that we all have access to the same information, customers increasingly behave like fans. They need a good reason to let you into their lives.

Of the millions of words written about social media every day, most of what is said is about the mechanics of tweeting, search engine optimization, whether the future is on Facebook, Google+ or Pinterest, etc, etc. This is all very important and interesting stuff but until you figure out what it is about you or business that makes people look twice, mastering these techniques will like being all dressed up with no place to go.

How about an example? Say you are a fund manager that invests in commodities. What the regulator doesn't want you to do is offer any form of investment advice to anyone anywhere. What you can do is put your purpose in a bigger perspective. For example, you could help people better understand the role that commodities play in our world. People casually talk about the price of oil or food so they probably want to hear more about it. This is also a good reason for the media to pick up on your stories. There is nothing like the media to build credibility, which in turn attracts more investors to you.

This kind of thinking can be applied to most activities in the services industry.

The main point I am trying to make here is that the effort of designing a good social media strategy forces you to get very close to your core "raison d'être". A traditional marketer would probably say that it has always been this way but what makes social media so unique is that it provides instant feedback and nowhere to hide if you get it wrong. The world has become much more complicated that just printing nice glossy brochures.

Maybe the reason why so many financial services companies have been procrastinating about social media is because they still trying to find out what their core purpose is...

Have a look at the video below, it is a very interesting presentation by Simon Sinek in which he explains how the 'why' of what we do trumps everything else.