Professsional services firms face mounting opportunity cost if not active on social media

Social Media Influence (SMI) recently underscored the rapid acceleration of new business generated by engagement on social media, citing a “study conducted by Austin-based PulsePoint Group and the Economist Intelligence Unit, which indicates companies that fully embrace social media are seeing ‘four times greater business impact’ than their less socially engaged peers.”

And as Kevin McKeown, President of LexBlog, noted recently:  ”Lee Frederiksen, Ph.D. and managing partner of Hinge Marketing has published research based on 500 professional services firms which “…demonstrates that firms with a higher proportion of online new business leads grow faster and are more profitable.”

Of vital importance, “Social media is emerging from its adolescent phase and is rapidly maturing”, reports social media analyst and advisor Jeff Bullas.  And Search Engine Journal recently reported a ”steep curve of the user growth rate in all age ranges and demographics, and the continuing pervasiveness of social networking into every facet of work, play and life in general.”

“Companies are also embracing social tools–including internal networks, wikis, and real-time chat — for functions that go far beyond marketing and community building” as Ryan Holmes, CEO of Hootsuite, outlined recently on Fastcompany.com.  “According to an analysis of 4,200 companies by the McKinsey Global Institute, social technologies stand to unlock from $900 billion to $1.3 trillion in value. At the high end, that approaches Australia’s annual GDP”, reported Holmes.

Global Implications

Global revenue derived by the social media sector also reflect a growing acceptance of the medium by individuals and businesses worldwide. As the Economic Times recently reported, citing a study by Gartner: “global social media revenue [will] reach $16.9 billion in 2012″.  Clearly, companies are voting with their wallets and moving to social platforms to reach global audiences.

Dramatic expansion in the ability to connect globally

As OpenView Venture Partners, a venture capital firm focused on helping technology companies has outlined:  “Social media lowers many geographical barriers that would previously have hindered expansion.  Social media profiles and content can now be seen and shared from anywhere on the planet, thereby offering businesses significant opportunities to increase brand awareness and engagement.”

Markets expanding, diversifying

For US professional services providers in particular, looking overseas must now be done to not only secure new inbound work, but also to secure work to be performed overseas.  Why? Because  “more than 70 percent of the world’s purchasing power is [now] located outside of the United States”, as the International Trade Administration reported recently in an article entitled Exporting is Good for your Bottom Line.   US professional services providers now need to be actively following US companies overseas to secure work.  Custom social media engagement is one way to do this more efficiently.

Skepticism remains, however

As Matt Tonner, Online Community Manager for FanHappy Inc. recently wrote:  “It’s difficult to justify investment to an executive class (and demographic) which regards social media with staunch resistance.”

Tonner argues that the ”opportunity cost of not participating in social” should be the key consideration of whether to engage in it.  “We know the money that might be saved by forgoing a social media campaign. But what about the missed opportunity to increase brand awareness, brand equity, and ultimately, revenue?  How much bigger does [social media] have to get before we buy in? What if the competition decides to step up to the plate before we do? These are the kinds of questions that will turn heads in the C-suite.” he argues.

As social media advisors Convince and Convert have outlined,  it’s engagement between business and their customers that matters, not the “ROI” question.  Indeed, David Alves argues persuasively that the concept of “ROI” as applied to social media is a broken metric that needs replacing.

Legal and Financial Services:  Much to gain

“Seventy-six percent of [corporate general counsels] say they attribute some level of importance to a lawyer’s blog when deciding which law firms to retain,” as Kevin O’Keefe reported recently.  “According to the American Bar Association’s 2012 Legal Technology Survey reported by Samantha Miller in LexisNexis, law firms are “landing actual new business” as a result of blogging.

And David Teten, partner at ff Venture Capital, and an expert in deal origination for investors, argued convincingly in the Harvard Business review in 2010 why financial services professionals must now be engaged in social media in order to secure more proprietary deal flow.  And financial services providers should consider the costs involved with waiting to engage in social media, suggests TheFinancialBrand.com.

Early adopters will benefit more

The American Bar Association (ABA) recently cited HubSpot’s  ”2012 State of Inbound Marketing” study, which indicates that ‘those who move first [into social media] are more likely to reap the tremendous business benefits of this new era of marketing.’”

Drive your business expansion globally

The demonstrated ability for social media to increase business revenue, coupled with its’ ability to be accessed instantly across the globes’ 25 time zones, provides professional service providers with an ability to forge previously unimaginable relationships.  I believe the question has now moved beyond whether social media engagement is necessary.  It will be interesting now to see which professional services firms that do chose to engage will in turn become the leaders in perfecting the craft of social media (operating in sync with other precision business  development initiatives) to secure new business globally.

The future is here

Professional service firms can now forge ahead with social media efforts knowing, based on the evidence, that those efforts, properly designed and implemented, will help build a global client base not possible just a few years ago.

As the Star Online reported from this week’s International Malaysia Law Conference, Paul Subramaniam of ZicoLaw summed it up succinctly in an address to conference participants: “Businesses must engage with social media to remain relevant.”