Social media is rapidly changing the way people communicate and the way consumers buy products and services. Sites like Facebook, LinkedIn and Twitter are drawing in millions of users, but what does that mean for your practice? In this white paper Mark Cohen and Victor Gaxiola explore the impact that social media can have on and advisor's practice to engage with customers to increase productivity and drive success.

1. Advisor Success in Social Media
Return on Influence and Managing Client
Relationships with Social Networking

2. Advisor Success in Social Media
Return on Influence and Managing Client
Relationships with Social Networking
By: Mark Cohen – Assistant Vice President, Digital
Media, Cambridge Investment Research, Inc. and
Victor Gaxiola – Social Media Strategist, Gaxiola
Financial Group
As an advisor, it’s impossible not to get caught
up in the hype and promise surrounding
social media. “Ignore it at your peril” proclaim the
pundits. “Don’t do it” is the response from many
compliance officers. Where are you along this
continuum? Are you working in a broker-dealer
environment that has enabled exploration through
use of a regulatory compliant social media solution,
or are you forced to sit on the sidelines?
Even with a compliant solution in place,
many advisors are searching for answers prior to
getting started with social media. Questions abound
regarding social media, ranging from assessing the
value of the medium to determining how to best
achieve results. And the current attention to social
media is reminiscent of the early days of websites
that trace back to the early digital media of the
mid-1990s.
In those early days of digital media, we grappled
with a very similar environment. The value of
websites was questioned and regulatory treatment
applied existing rules to the new media – much like
the experience we see today with social media. We
think we can take pointers from the past experience
with websites and develop a practical, compliant
approach to use of social media. We think a practical
approach is not only based on the classic ROI
(Return On Investment) but includes a view on
Return On Influence, or ROinf1
.
The concept of influence as a governor of
business is as old as business itself. Before the advent
of “big brands” and marketing focused on engaging
people with the brand, people were generally
compelled to do business with the people they knew.
People were brands. Personal brands were built
on trust, value, and reciprocity and these personal
brands were based on the strength of relationships
and were highly referable. Sound familiar? Our
assertion here is that the traditional relationship
approach is the way you, the trusted advisor,
conduct business today and reflects the manner in
which you have become influential with your clients.
But we believe social media offers options to be
more efficient and effective in engaging directly with
your clients.
The concept of ROinf is not new either;
however, the application to social media in
connection with an advisor’s business and client
engagement is new. In order to properly consider
1 The notion of Return On Influence has been around for
some time and numerous views are publicly available.
The authors of this thought paper are also students on
the topic and have formulated their own ideas regarding
Return on Influence and its application to social media.

3. influence we must first define it. It is our contention that influence
is based on five factors:
• Trust
• Value
• Engagement
• Reciprocity
• Advocacy
Simply put, the more an advisor has of each of these five
factors, the greater the odds of achieving a positive ROinf. Let’s
consider each factor more fully as to what it means for you and your
business:
Trust – an advisor's personal brand is crucial to gaining
influence. If you are reading this whitepaper, chances are that
you have a strong personal brand based on trust established after
numerous personal interactions. These interactions and the trust
garnered from them have paved the path to influence. Today
advisors also have to engender trust online as a requirement
to build a viable social network. This trust stems from offline
influence and will need additional care to extend it to the creation
of online influence. Being genuine, establishing your credibility,
and respecting the attentiveness of your audience are just some of
the aspects of online trust you’ll need to consider. You also need
to recognize that regardless of how long you’ve had your practice
or how influential you may be, it will take time before you gain
a similar level of influence in social networking mediums. We
encourage you to accept social media as a “slow burn” at best.
Value – your trusted brand adds value to your relationships and
this is a concept that is not foreign to financial advisors. Your clients
stay with you because of the value you add – you bring them your
unique perspective and overall value proposition – your competitive
differentiators. And although “value” may be gained differently in
social media, you’ll find value goes hand in hand with trust in social
networking, and perhaps is expected to an even greater degree. It
is important to note the more value you are perceived to deliver
in social networking, the greater the odds of increasing your social
media network and expanding your competitive reach.
Engagement – this is a term often discussed in social
media circles. As you know, the more engaged your clients are, the
more inclined they are to deepen their relationship with you. This
is true in social mediums too, although in this case more care and
focus is required. Why?
Technology makes frequent and higher levels of engagement
possible which drives higher expectations from users of social
media. Social media users demand that you engage with your social
network in a relevant manner that delivers value – to them. It
is important this be perceived to come from an authentic voice
– your voice – not a canned or corporate voice. Done well, your
interactions will encourage dialogue and feedback with you from
your social network connection.
This level of engagement implies a meaningful time
commitment, but we believe the fruits of labor for online
engagement are worth the time.
Reciprocity – in social psychology this often means
responding to a positive action with another positive action, and
likewise, a negative action draws negative responses. In terms of
social media, once trust is forged then added value follows and
levels of engagement expand. Your social network connections will
then begin to reciprocate by making others aware of the value they
find in your interactions. They won’t just read the commentary you
posted on your website; they point others to it via their own social
media interactions. In turn, this interest will create new connections
for you and offer prospecting opportunities. Social media
dramatically increases the effectiveness of your efforts as it offers a
unique means for easily and quickly sharing your value proposition.
This element of reciprocity does present a challenge to those of
us engaged in a heavily regulated industry such as financial services.
While we believe solutions are coming, we urge caution in terms of
the typical application of reciprocity outside our industry – which
is sharing of content by your connections to others without your
engagement. Content must be considered in terms of applying
existing regulatory guidelines to this new social medium.
Reciprocity is also a double-edged sword. You must fully
recognize the power of reciprocity in social media because negative
views and bad feelings can spread like wildfire. Negative sentiment
often spreads more quickly in social media than positive views, so it
is critical to keep those interactions as positive as possible.

4. Speaking of positive, you’ve no doubt realized the higher the
level of engagement you have with your network, the more apt it
will be to serve as your advocate – which brings us to advocacy.
Advocacy - with an engaged audience and reciprocity in
play, your advocates will step forward. Think of these advocates
as your biggest fans. Some of them will be your clients, but
others may be part of your network through your clients and the
positive interactions they’ve had with you in social media. In other
words, prospects can also be social media advocates and help raise
awareness of your business and added value – increasing the number
of meaningful interactions within your social network.
Together, the five factors referenced above establish an advisor’s
influence. So how can you quantify ROinf and leverage it for
conversion in terms of your business?
In broad terms, the more meaningful your influence is on your
social networking connections, the greater the size of your social
network. This leads to positive ROinf but it is not the complete
end game. The more positive the ROinf becomes, the greater the
odds of achieving your goals for customer retention, advocacy, and
ultimately, new customer acquisition.
Let’s face it, just as it took several years to prove positive ROI
for websites back in the 1990s, it will take time to prove returns
regarding social media. There is no one size fits all ROI model for
business. We like to say that “ROI is in the eyes of the beholder” in
that the truest measure of ROI is that which makes sense for your
business and your circumstances. Could that be straight cost of
effort divided by the revenue derived from that effort? Absolutely,
but if you can’t necessarily track or measure that in your practice, we
believe it makes more sense to utilize metrics that you can track and
measure. With these thoughts in mind, let’s again consider ROinf.
The true beauty of ROinf is that it is flexible enough to consider
both hard (cost) and soft (engagement) attributes to paint a picture
of return. We think this will be equally relevant to the solo office
with few analytical tools, as well as the super-branch that has staff
dedicated to measurement. In essence, before an advisor considers
measuring ROinf, we recommend defining just how you would
define your influence. It may be in a detailed format relying on the
model proposed here, or it could simply be broad brush strokes that
compare retention and prospecting in a before and after sense with
respect to social media.
With all of this in mind, our suggested ROinf model follows:
Trust and Value
This could be tough to track, right? Since we’ve made the case that
trust and value are crucial to building a social network, it stands to
reason that this is where numbers of fans and followers come in.
We think you could translate this into meaning the more fans and
followers, then the greater levels of trust and value. So, we would
propose that a net gain in fans and followers is an indication of an
increase in trust and value.
Engagement
This may be even tougher to track than trust, particularly because
engagement based on social media may occur in other channels.
Regardless, we need to start somewhere, so in this case we’d propose
measurement of conversions and website traffic. A conversion is
an action we want our audience to take. The theory being that
the more engaged the audience is, the more apt they are to take a
desired action. In this case, it could be clicking a link in a post,
commenting on a post, or visiting your website.
Website traffic is more straightforward. You can measure
increases in website traffic and know that they are coming from
social media channels. Further, you can then measure the amount
of time these visitors spend on your website and compare that to
non-social media visitors. Additional measurements include similar
comparisons regarding website paths and actions taken on your
website – which may result in that person becoming a new business
lead or some other conversion event.
Reciprocity
As indicated earlier, we’ve defined reciprocity as the sharing of
content; however, this level of engagement appears to present
regulatory challenges, and we look forward to software solutions
that alleviate these concerns. Once this type of solution is in place
metrics will be fairly straightforward in that we would then want to
track the frequency of content sharing.

5. Advocacy
Advocacy is the next step from reciprocity in that advocates believe in
your influence and value proposition and are likely to share that belief
with their social network connections.
Advocacy may be the most valuable metric of all in measuring
effectiveness of your social media efforts, but it may be the hardest
to track. To keep things simple, we’d suggest analyzing your network
to determine who the most highly engaged individuals are and then
track the number of times they take some action on your behalf and
multiply that by the number of connections in their network.
Influence
The value and trust you build forms the basis for your influence
– which is likely the ultimate tool that enables you to grow your
network, deepen relationships, and generate new business. Through
social media you create capital in the form of meaningful interactions
and in turn, these interactions increase your ROinf.
About Mark H. Cohen
Assistant Vice President – Digital Media, Cambridge Investment
Research, Inc.
Mark H. Cohen offers over 20 years experience in digital
media. His career highlights begin with a decade in traditional
advertising, including a role as Executive Vice President for CCM,
Inc. In those early years he was active in the industry trade group,
the PMA, where he was a founding member of the New York
Chapter. He also taught promotion marketing, and later, the first
web marketing class at NYU’s School of Continuing Education.
In 1994, after co-producing the first concert broadcast on the web
– The Rolling Stones live from Dallas, Texas – he co-founded one
of the first interactive marketing agencies in New York, Premiere
Interactive Media – which he later sold to his partner when he was
recruited to become Janus Capital’s first Webmaster. Mark joined
Cambridge in January 2011 following a year of engagement with
the firm as a digital media consultant on behalf of the firm he
founded, Colloquy Digital.
About Victor Gaxiola
Social Media Strategist, Gaxiola Financial Group
In addition to Victor Gaxiola’s role as a Social Media Strategist
for the Gaxiola Financial Group, he is the owner/Social Media
Coach and spokesperson for Red 7 Marketing. He frequently
participates as a commentator on social media in the financial
services industry, and was recently selected to serve as an advisory
board member of linkedFA, a social network for financial and
insurance professionals. Victor has over 17 years of experience in
sales, marketing, and project management with various companies
such as Westin Hotels, United Airlines, and Wells Fargo Advisors.
He is a graduate from the University of California, Los Angeles
(UCLA) with a degree in interpersonal communication studies. As
a financial advisor, he co-founded Gaxiola Financial Group with
his wife, Kim, and increased engagement, retention, and dialogue
with clients through the successful use of social media tools.
Securities offered through Cambridge Investment Research, Cambridge
Investment Research, Inc., a broker-dealer, member FINRA/SIPC, to residents
of AZ, CA, FL, IL, NJ, NV, OR, VA, WI. Investment Adviser Representative,
Cambridge Investment Research Advisors, Inc. a Registered Investment
Advisor. Cambridge and the Gaxiola Financial Group are not affiliated.

6. Getting Started in Social Media
Cambridge offers advisors compliant access to social media
supported by in-house coaching and guidance for integrating
social media into marketing strategies. Cambridge’s broad scope
of solutions includes social media boot camps and one-on-one
consultation for getting started, content and resource strategy,
engagement tactics, and integrating social media into advisor
marketing plans. Following are highlights from Cambridge’s
24-page Companion Guide “Getting Started in Social Media”
which focuses on building presence, engaging others, and nurturing
relationships.
Audience, objectives, and resources – although more fully
detailed in the Cambridge Companion Guide, Cambridge’s primer
on evaluating social media platforms, begins by asking these
questions:
1. Who is your audience and what social media do they use?
It is important to understand which form of social media your
audience uses as different social mediums appeal to different
audiences based on generational preferences or other factors.
2. What are your business and marketing objectives?
Each form of social media has a sweet spot and understanding
that can give you insight as how you can best meet your goals.
3. What resources do you have to manage your social media efforts?
Engaging your audience will take time and effort. It’s critical
you fully understand the time commitment prior to making a
final determination on which social media platform you intend
to us.
We believe these questions form the basis for a social media
evaluation system that will enable you to objectively determine
whether LinkedIn®, Twitter, and/or Facebook are suited to your
business objectives.
Define Content Strategy
Another important step is to define your content strategy. Before
you set up a profile, you need to understand how you are going to
use the social medium, what you intend to “say” and how you are
going to interact – all of which result in a content strategy.
You can start to create a content strategy by addressing the following
questions:
• What message do I want to share?
• How does my message correspond to other forms of
communication (my website, marketing collateral, etc.)?
• Who is going to create the content for my social media
messages?
• How often is my social media content going to be updated?
• Does the content I intend to use require pre-approval on a
compliance basis?
• Has my content been approved according to regulatory
guidelines?
We encourage you to research the various social media
platforms, such as LinkedIn, Twitter, and Facebook, and develop
a foundation of knowledge so that you can best evaluate each by
recognizing their distinct attributes regarding audience, objectives,
and resources. We are pleased to add that Cambridge has done the
heavy lifting here for its advisors and offers relevant summaries in its
boot camp guide and personalized consultations.
Best Practice Tips for Social Media
We leave you with final thoughts on best practice tips for leveraging
social media:
• Develop a strategy based on:
◦◦Audience
◦◦Objectives
◦◦Resources
• Focus on one social network to start
• Tap into resources such as college interns
• Regarding LinkedIn
◦◦Create robust profile
◦◦Actively expand connections
◦◦“Mine” the network
• Regarding Twitter:
◦◦Listen, learn, and research
◦◦Connect to LinkedIn or Facebook
• Regarding Facebook:
◦◦Humanize your brand
◦◦Tap into resources
◦◦Frequent postings
◦◦Timely responses
◦◦Theme reinforces value
proposition
◦◦Consistently refresh content

7. About Cambridge
Cambridge Investment Research, Inc, member FINRA/SIPC, is
an independent, privately owned broker-dealer with about 2,000
independent registered representatives and nearly $45 billion assets
under management.
Cambridge offers advisors compliant access to social media
supported by in-house coaching and guidance for integrating social
media into marketing strategies.
Recognized in the industry as The Fee Experts®2
, Cambridge
provides innovative fee programs and a full menu of commission
offerings to advisors across the nation. Cambridge has been ranked
the fee leader among independent broker-dealers for 10 consecutive
years3
and is a four-time winner in the Broker-Dealer of the Year
annual poll4
. www.joincambridge.com.
2 THE FEE EXPERTS® is a registered mark of Cambridge Investment
Research, Inc. for its investment advisory service for investment managers.
3 Financial Planning magazine, June “FP50”, Top 50 Independent Broker/
Dealer Issue, 2001-2010.
4 Investment Advisor Magazine, 2010, 2009, 2007, 2003
CONNECT WITH CAMBRIDGE
Securities offered through Cambridge Investment Research, Inc., a
broker-dealer, member FINRA/SIPC, and investment advisory services
offered through Cambridge Investment Research Advisors, Inc., a
Registered Investment Adviser. Both are wholly-owned subsidiaries of
Cambridge Investment Group, Inc.
The information discussed herein is general in nature and provided for
informational purposes only. There is no guarantee as to its accuracy or
completeness. Reprinted by permission for use by Cambridge. All rights
reserved.

8. Selective advisors choose Cambridge. Contact us at (TheFeeExperts@cir2.com) at 877-688-BDOY (877-688-2369).
www.joincambridge.com 877-688-BDOY (877-688-2369)
Cambridge Investment Research, Inc.
www.joincambridge.com
1776 Pleasant Plain Road
Fairfield, Iowa 52556