Why Relationships Matter and ROI Doesn’t

DavidJohnson4
David Johnson VP, Partner, 3GEngagement

Posted on March 14th 2012

Why Relationships Matter and ROI Doesn’t

We live in a society that puts the dollar above the customer. That is, corners are cut and customer service is subservient to getting “paid.” Don’t get me wrong, I like getting paid as much as the next person but too many times we question the return before we implement any kind of customer service process that influences both repeat business and word-of-mouth.

Albert Einstein said it best when he said, “Everything that can be counted doesn’t necessarily count; everything that counts cannot necessarily be counted.”

I recently wrote a post called, Forget About ROI, Start Think About ROE. In that post I put forth the idea of thinking in terms of Return On Experience, in other words, the return you receive on the experience you give your customers. I had somebody tweet me saying that I was naive and misguided if I thought ROI wasn’t important. He missed the point. I’m not saying that ROI isn’t important, because it is. What I am saying is that being able to track an ROI isn’t important on some of the things that we know we should be doing. That takes me back to what Einstien said, “…everything that counts cannot necessarily be counted.”

While there are ways to track a repeat customer and word-of-mouth, it’s not always straight forward. I don’t think anybody would argue that customer service goes a long way to determining if a particular customer is going to become a loyal customer or not. We’ve all been subject to poor customer service and thought to ourselves, “I’m never coming back here again!” The opposite is also true.

Again, you may not be able to figure out what the cost to income ratio is of good customer service, we know it’s there. So, when it comes to relationships, they matter and ROI doesn’t.

Building A Positive Relationship With Your Customers

Depending on what type of business you’re in, the depth of your customer relationships will vary. I’m not putting forth the idea that you should become buddy-buddy with all of your customers to the point that you’re hanging out with them on the weekends. What I’m saying is that you should build the type of professional relationship that showcases you as the authority, the go to restaurant, or the honest mechanic. What does that mean? It means that you should give great customer service, that you should enchant your customers to the point that, at least in their minds, that you are the best thing since the Internet.

From there, once they are enchanted, follow-up to cement yourself as the business of choice. Let me give you a hypothetical scenario using a barber shop.

I go in to get my hair cut, walk up to the counter and am told there will be a 45 or so minute wait. The gentleman behind the counter offers me a coupon saying, “If you’d like to, the coffee shop next door has some of the best coffee in town, here is a coupon for a free cup. I can give you a buzz on your cell when your barber is ready.”

I take the coupon, and in 30 minutes I get a call from my barber letting me know that I’m up next. Once I get back to the barber shop my barber welcomes me by name, and asks me if I want the same “regular” haircut, tapered in the back, as I got last time. I mention that I would and then he asks me if the shampoo he recommended had cleared up my dry scalp.

I tell him that it had and then he strikes up a pleasant conversation about me. He shows a genuine interest in what I do, even mentions that he knows somebody that might be in the market for my services and asks for a business card. I give it to him, but instead of sticking it in his pocket he picks up the phone and two minutes later tells me that his friend will be expecting my call.

After he ensures that everything is  just how I like it he tells me how much he appreciates my business and how much he enjoys it when I come in. 20 minutes after leaving I get an email from him, with the phone number of his friend along with a few tips on how to combat dry scalp.

How would that make you feel? He didn’t spend any money, but he did go above what I’d expect from the person cutting my hair. Even the conversation was about me (everybody’s favorite conversation is about themselves), and not about the weather (what most barbers talks about).

What is the ROI on that? Can it even be tracked? Do you even need to track it? I don’t think so, because once again, relationships matter and ROI doesn’t.

So, don’t let the fact that it can’t be counted stop you from implementing a customer enchantment methodology into your everyday business practice. Just know that the return will be huge, even if you can’t prove it. Remember, people talk. Give them something positive to talk about and they will talk about you, influencing others to become your customer. That’s how you create a lifelong customer that creates other lifelong customers.

How are you enchanting yours?

DavidJohnson4

David Johnson

VP, Partner, 3GEngagement

Next to my family and my faith, social marketing is my passion. I blog about how business and social purpose intersect in order to grow your bottom line.

See Full Profile >

Comments

Rasmussen747
Posted on March 14th 2012 at 11:33PM

That is a brilliant article David and I could not agree more. Social media marketing is not the issue here. The issue is social marketing; Social intelligence by behaviour. And, of course, the social experience, that could build life long relations.

DavidJohnson4
Posted on March 15th 2012 at 3:14PM

Well said! I don't get why business owners ask me, when I talk about customer enchantment, what the ROI is. While it may not be easy to track we all know that repeat and referral business is the key to just about any business. Thank you for commenting, you rock!

jrbond00
Posted on March 15th 2012 at 12:49PM

David,

Another excellent post. I agreed wholeheartedly with your first post and your ability to further explain it in this post is perfect. When we, as customers are made to feel valued or unique, it goes a long way in building our loyalty towards the product or service. The trick is to instill this quality in employees and making that practice part of the brand to some extent. I am in higher education. After reading your first post I have decided to work with a team of admissions representatives at AU to see how we can focus some attention on "experience" as we meet with prospective students and their parents. Well done.

Jan Bond

Director of Marketing
Ashland University

DavidJohnson4
Posted on March 15th 2012 at 3:23PM

Thank you for those kind words! I wrote this post because of that tweet, I felt that I needed to explain further about what I meant when I said "Forget About ROI."

As far as giving prospective students and their parents an "experience," that's a great idea! Just look at what universities do when they are trying to recruit top athelets for their athletic program. Out of curiosity, what kind of follow-up program do you have at AU? I ask because I think that a student that feels wanted will be more likely to choose AU over another school that didn't make them feel desired.

Catherine K
Posted on March 15th 2012 at 11:00PM

David I agree, maybe it should be ROR for Relationships or ROT return on Trust! I have just written a post about why we should be watching our Google Analytics Bounce Rate here.

This article refers to how Google will be analyzing our bounce rates more closely for exactly the reason you point out. Relationship and experinece matter. If people are landing on a site and hitting the back button fast, this is negative metric. They want to see relevance, sharing and quality.

DavidJohnson4
Posted on March 16th 2012 at 12:31AM

Good customer relationships affect everything, but aren't always easy to track. That's the reaon why I wanted to write this post, and the one previous. Thank you for the comment Catherine and thank you for the link!

Clantsp
Posted on March 16th 2012 at 3:58PM

I think this is a good follow-up to the previous article. I agree that not everything needs to be assigned an ROI or counted. I think my problem is more with your title than with the content. Anytime some says ROI isn't important or should be forgotten I cringe. Just look at what happened at the SXSWi 2012 ROI panel. People attending the panel and following online were left with more questions than answers becuase we as marketers are still arguing how to track ROI on social media. The last thing we need is more people saying to forget about it or that it doesn't matter. I get that you are trying to make a point that sometimes too much emphasis is placed on ROI and not enough on other very important aspects such as word-of-mouth. Not everything needs a number applied to it, but if it does need one make sure you do and know how to track it. 

Like I said, I like this article much more than the other one. Totally get what you are saying. Just a suggestion though, maybe stay away from titles that say "Forget ROI" or ROI doesn't matter. It can put a bad taste in someone's mouth.

Just a thought. Good job on this follow-up.

DavidJohnson4
Posted on March 16th 2012 at 5:53PM

As a marketer the title was a marketing move, more or less. I have had enough people send me emails, comments and tweets that I thought it important enough to write this post... I'm happy that you like it, at least more than the last one.

The idea really, if I could some it up in one sentence is that just because ROI can't be tracked doesn't mean that it's ROI is nill. Thank you again for commenting, I really do appreciate it!

RalphPaglia
Posted on March 17th 2012 at 4:35AM

Great article... We need more key decision makers in the auto industry to read it!

DavidJohnson4
Posted on March 17th 2012 at 3:57PM
I agree Ralph, I'm about to share this on ADM!
BethNeibert
Posted on March 17th 2012 at 7:52PM

Hey David!

Great article! Would you mind standing beside me during business meetings when I'm educating my clients on the value of social media? That you can't always find a tangible ROI relationship marketing? Thanks for affirming my thoughts. Sometimes you just have to be relational to build connections; the money will come in other ways. Like your referrals and testimonies about your barber. Right?

Here's to your continued success!

Beth Neibert
Principal, Beth Neibert & Associates, LLC
http://bethneibert.com

DavidJohnson4
Posted on March 18th 2012 at 9:41PM

I'd be glad to! LOL It's not always easy convincing, but then again I don't think anybody can argue against the fact that good customer service and building relationships with your customers go a long way to increasing loyalty and influencing word-of-mouth. As Einstein said, not everything that counts can be counted!

BethNeibert
Posted on March 19th 2012 at 1:39AM

You are so right on, David, and what a great quote to remind us all. Thanks, again, for the great article and keep them coming!

Here's to your success!
Beth Neibert

DavidJohnson4
Posted on March 19th 2012 at 3:11AM

I have to now, with the virility of these past two posts people are demanding them! LOL Then again, I don't mind.

Thank you, Beth!

Colin Williams
Posted on March 19th 2012 at 1:01AM

Great follow up article.

There is an obsession with ROI, fair enough. However, I think it is thrown up by a lot of business people when social media is being discussed because they don't understand it (social media). Therefore, it is always easy to talk about what you know and most business people are comfortable talking ROI. The same people will run client events, brand promotions and so on and in reality have absolutely no idea in advance of what that ROI will be for these events, but because they have done it for many a year, they are comfortable with it. In time, the same will occur with social media.

 

Cheers

 

DavidJohnson4
Posted on March 19th 2012 at 3:10AM

I think you hit the nail on the head with that one! People will always do what they've always done because it's all they've ever done. Thank you for adding to the conversation Colin, you're appreciated!

Christina Bennett
Posted on March 19th 2012 at 2:45PM

This is a really good article, which I am about to share.   I always find the argument that you have to see the tangible ROI from any action not only terribly short-sighted, but also disappointing.  To me it is akin to only giving a gift if you are expecting to receive in return.  It's not genuine caring, it's selfish.  

Of course the business who appears to care more about their customers and the community they inhabit, than the cold hard numbers will generally see the increased ROI from their efforts.  It just may not be as easy to show the correlation between the efforts of the social marketers and the increased business as the accountants would like.  'Relationships' might be a hard sell to some of those guys, but I agree that it's the right way to go.

Oh, and how would I feel about the hairdresser?  Amazed, delighted, but a little bit creeped out ;)

 

 

DavidJohnson4
Posted on March 20th 2012 at 3:18PM

LOL, I guess it could be a little creepy! Of course all the barber had to do was use a CRM, which I recommend most business to use.

Care, very good word, it's something that most business forget to do, care. It's a small word with a big ROI!

Thank you for commenting!

CCuddington
Posted on April 5th 2012 at 2:35PM

This article is BRILLIANT!! 

It's the personal touch that impressess me and after all, isn't that the Golden Rule? Treat people how you would like to be treated! 

Well done!

DavidJohnson4
Posted on April 15th 2012 at 3:01PM

I appreciate the kind words and totally agree that the Golden Rule is very relevent to customer service, more businesses need to think that way!