We make purchasing decisions every day. Whether we are considering small decisions like where to go for dinner or larger decisions like a home electronics purchase, we all have a process for making those decisions. And that process is highly influenced by the people around us.
The social aspect of commerce is the focus of a recent article by social media consultant Brian Solis entitled The 6 Pillars Of Social Commerce: Understanding the psychology of engagement. Referencing an infographic entitled Social Commerce Psychology, Solis highlights 6 highly social methods we use to make buying decisions:
- Social proof: In the absence of certainty, we seek out others who have faced similar decisions to see what they did.
- Authority: Along the decision-making path, certain well-informed people emerge as authorities and we look to them for guidance.
- Scarcity: People act with greater urgency when supply is deemed low and demand high (e.g., “limited time offer”).
- Like: We have a tendency to agree with people we like and admire, so we seek out our influencers and see what purchase they made in a similar situation.
- Consistency: When faced with uncertainty, we tend not to take actions perceived as socially risky (like changing brands or doing anything that goes against the wisdom of the crowd).
- Reciprocity: When we are the beneficiary of a good deed or see one done, we feel a strong sense of reciprocity to the doer.
So what does all this mean to financial advisors? Social networks are increasingly where your clients and prospects are turning for advice about their investments and who to use as an advisor.
Social media offers an abundance of opportunities for interacting with one’s social networks and tapping the wisdom of those networks to help us make important buying decisions. And that’s exactly what we do.
We Google people and products and do lots of research before buying anything. And Google’s socially filtered search results now tell us who in our network may have already been down this path.
We also reach out on Facebook and Twitter seeking input into our decision process—who do other people use for this or that service and what has been their experience?
For professional financial advisors, it’s becoming increasingly important to engage in social activities that position you and your business strongly within the social graph. Strategies to achieve this include:
- Building deeper engagement with your clients and developing among them brand ambassadors who recommend and refer you;
- Contributing to helping people understand the buying process for your product/service—without pitching them directly;
- Focusing on being knowable, likable and trustworthy by sharing your personality, not just your knowledge;
- Striving to always help and approach your online activity with a “pay it forward” attitude.
By focusing your strategy on strengthening the fabric of your social network, you will position yourself and your business strongly for reaping the benefits of an increasingly social world of commerce.