ROI, or return on investment, is a well-known abbreviation in the small business world. ROI is the dollars and cents factor that drives most companies’ actions and decisions. A related abbreviation, one which may be new to you, is ROR. ROR stands for return on relationships, and it was the topic up for discussion in my recent interview with Ted Rubin.
Ted Rubin is the acting CMO of Brand Innovators, a company that holds marketing summits and events around the country where brand marketers can learn, share and connect. In his own words, Ted describes himself as a “social marketing strategist, brand evangelist, and keynote speaker.” He is an expert on ROR because he actually coined the term in 2009. In our interview, he explains what return on relationships is (and what it is not) and how it relates to ROI.
What Is Return on Relationships?
Where ROI is the value measured in dollars and cents, ROR is “the value that is accrued by a person or brand due to nurturing a relationship.” Ted explains that it is both perceived and real, and this value will accrue over time in the way of connections, loyalty, recommendations, and sharing. In other words, ROR is the path you should take to develop a company which has tons of loyal customers who are ready and eager to do the marketing for you.
To get these returns, you must nurture the relationships you have with your customers. To do this, you must create authentic connections, interactions, and engagements. For both brick-and-mortar and online businesses, one of the best ways to do this is through social media.
Using Social Media to Nurture a Return on Relationships
First, we have to be clear about one thing. Just because you have a Facebook or a Twitter page does NOT mean you are getting any ROR from it. Most businesses will join social media and begin posting content. However, if they stop there, they are using social media simply as a broadcasting media which will not bring a return on relationships.
The real value of social media is the SOCIAL part. That means having conversations with your followers, responding to them, interacting and engaging with them. It boils down to what seems like an obvious statement – to get a return on relationships with social media you have to be social. Ted knows this is a seemingly obvious thing to say, but as he tells me in the interview, “Ray, I’ll make this real simple. Almost everything I preach, almost everything I talk about, people can look at me and say, ‘Well, that’s common sense.’ But the truth of the matter is, common sense? It’s not very common.”
Knowing that the key to accruing ROR is communication, interaction, and engagement with customers, you might say to yourself – I don’t have the time (or the money) to communicate with everyone! Well, you don’t have to. Earlier we told you that return on relationships is “both perceived and real” and THAT is the trick.
Your social media followers can actually develop a relationship with your brand without having engaged with you. Many of them don’t have a specific interest in communicating with your company, but what they do want to know is that if they ever DO have a question, issue, or need, that you are the type of company that will engage with them. Ted says that the vast majority of social media followers are “lurkers” but they are participating vicariously. They are watching if, when, and how you interact with other customers who do want to engage. They absorb this dialog and form a relationship with your brand even though they themselves have not interacted.
How ROR Relates to ROI
As Ted tells me, ROR and ROI do not compete; it’s not one versus the other. Also, in the end, everything is about ROI or your business will not remain profitable. However, if you take an ROR strategy to build and nurture relationships, it will enhance all of your return on investment efforts.
This happens because there are a lot of businesses out there, and people make choices about who they will do business with. In the past, advertising would help a person decide; people were more willing to accept the word of advertisers because information wasn’t readily available. Today there is a lot of information – company websites, review sites, blogs, the opinions of friends on social media, etc. With all of this information, people end up choosing businesses that they have a personal relationship with. This could be because their friend likes it, because they know someone at the company because they tried the product or service and had a good experience – and even because they have vicariously formed a relationship with your company by watching your interactions with others.
Doing ROR the Right Way
Once again, many companies are on social media, but few are developing a return on relationships. Keys to doing ROR right are:
- Remembering that social media is about being SOCIAL not just publishing content.
- Nurturing relationships by responding, interacting and engaging with followers who want to interact.
- Following up with all follower interactions in a timely manner.
- Making these conversations visible and public so “lurkers” can develop vicarious relationships with your company.
- Doing all of this consistently, not in spurts here or there.
If you just realized you’ve been doing things all wrong, don’t get too discouraged. In my interview, Ted talks about a major, global company that is completely failing at developing ROR with their social media campaigns. No spoilers – you’ll have to listen to the interview to find out who.
Return on relationships is an ideal way to grow brand loyalty, create customers who will do your marketing for you, and produce a boost in ROI. Let this quote from Ted guide your endeavors: “A brand is what a business or a person does, a reputation is what people remember and share.”