Strictly speaking, no middle-market advisor must use social media. Traditional in-person networking has, and will continue to have, a fundamental role in middle market dealmaking. But in an age where the internet is increasingly becoming the means of communication (Twitter alone has 284 million active users) — if you’re not using social media to source deals and create and nurture relationships – you are likely missing out on some opportunity.
John Slater, a Partner with Washington, DC-based Focus Investment Banking and a regular mid-market focused blogger, outlined in a recent article that the “onrushing digital age” is dramatically changing business. And that the mid-market is not immune.
Here’s some background as to how this digitalization impacts a mid-market advisor:
The internet’s value as a connector to the C-Suite
As Rafi Arbel outlined late last year about the internet’s use as a successful connector: “78% of consumers claim that custom content (like the content you’d share in a blog) is a sign that a business or [an] organization is interested in building strong relationships. After reading custom content on a website, 60% of consumers say they feel more positive about a company.” This positivity-by-content can prove extremely valuable in the competitive middle market. If a few blog articles every month can make the difference between you or a competitor winning a client, it seems like a no-brainer.
Also of importance, C-Suite executives, in particular want to be contacted because they thrive on “fresh ideas from outside their companies.” They seek unique, actionable, and commercial information tailored to their business.
Yes, mid-market advisors can do this in person, but social networking provides another, more efficient means to connect with more mid-market executives and their advisors – in less time. Proper use of social media and online content can create a scalable and precise means by which investors and advisors can connect with transaction-ready CEOs. Connecting via the means Arbel outlines – custom content via the Internet – is one exceptional method by which to access the C-suite – beyond networking in person.
The pros and cons of in-person networking vs. social media networking
A 2011 article by James Perrin compares in-person networking to social media networking. As is expected, each strategy has its own pros and cons – and the two strategies seem to be complementary.
One key difference between the two is time. While you might need a few hours or more to cross town to attend a networking function, the internet affords you with the ability to connect from your desktop to others – with often remarkable precision (again – if social media is properly utilized). In terms of trust, face-to-face networking and relationship building is clearly superior and necessary. But trust can’t be built with those you don’t get a chance to know.
Another major dynamic Perrin discusses is the balance of quality and quantity. In this regard, social media networking permits you to know more than you would without it – hence favoring quantity – by being able to connect a CEO and a trusted advisor from 1,000 miles. But those relationships can and should be deepened offline.
Who’s the winner? Both. Given the amount of online networking that can be done — utilizing a tailored effort online can build more opportunity offline – and lead to more deal-flow than you would have had without networking via the internet. Combined and coordinated with your already existing in-person networking – and more deal-flow will result.
Decide which path is right for you – but keep in mind the trend toward online networking
As Neutral Magazine has outlined: “Social networking has transformed traditional relations by removing geographical limitations, allowing people from similar communities around the globe to communicate and join together without constraint.”
With this in mind, I’d argue we’ve now entered what I would regard as a second major phase of social networking for professional services providers. Industry leaders have moved beyond the initial phases and are now adopting increasingly more sophisticated means by which to identify, engage and secure remunerative relationships with clients via online engagement. Simply by reading this article on Axial’s Forum, you’re availing yourself of the very sort of platform I am referring to. Indeed, the University of California at San Diego is now offering a course on some of the more advanced forms of social networking that are currently being used by savvy mid-market advisors, including blogs, vlogs (video blogs), forums, podcasts, mobile computing, and even virtual reality.
So based on where trends are going I’d say: Pick your online means of engaging amid a variety of options to compliment your in-person networking – and enjoy the benefits of both.