Author, Marketing Strategist, Provocateur, and Photofy CMO Ted Rubin discusses the concept of Return on Relationship and how every person in the business world can use social media to forge valuable new connections that will stand the test of time.
EXHIBITOR Magazine: In a nutshell, how would you define ROR?
Ted Rubin: ROR, #RonR… simply put is the value that is accrued by a person or brand due to nurturing a relationship. ROI is simple $’s and cents. ROR is the value (both perceived and real) that will accrue over time through connection, trust, loyalty, recommendations and sharing. AND is used to define and educate companies, brands, and people about the importance of creating authentic connection, interaction, and engagement
EM: How and when did you originate the concept of ROR?
TR: I first started using and evangelizing the term ROR in 2009 when I was the CMO of a then-little-known cosmetics company called ELF Cosmetics. We were what I call a challenger brand, with less than $5 million in sales at the time, and that was all online. Without any real marketing budget to speak of, we needed an edge to break out. I decided that social media was the way to go because I saw that competitors were initially utilizing social platforms as just another place to advertise. That’s where we could be different, I thought, by using it as a place to build relationships with shoppers who could then become influencers and advocates. It was a concept I believed could be the cornerstone for building a multi-million-member database and, more than that, an engaged community. Since then, ELF has grown to become a roughly $1 billion company with a website that sees 28 million visitors a year, which is more than any other mass cosmetics website in the United States.
EM: If a business has a Facebook or Twitter page, isn’t it by definition already pursuing ROR?
TR: Hardly. Posting on Facebook and Instagram or Tweeting doesn’t create relationships, and, as is the case with most brands today, doing so usually means you are simply throwing out ad-like content and not engaging, adding value, or building relationships with your customers. A network only gives you reach. That’s it. But a community gives you power. And you don’t build community by just inundating people with ads.
EM: What does ROR address that metrics used by exhibitors – such as return on investment, leads gathered, cost per lead, and so on – don’t?
TR: ROR is the value you accrue by fostering a relationship with customers, whereas ROI is a measure of dollars and cents. ROR is the worth of each customer that will accumulate over time through effective social-media engagements.
EM: What would you say to marketers who are resistant to adding yet another metric to their laundry list of other deliverables?
TR: In many ways, marketing is all about communication. But the last few decades of marketing tactics and the availability of social-media technology have made us lazy communicators. We often don’t even pay attention to who we are talking to, other than in aggregate via the data we collect. And even that’s a maybe. This almost guarantees customers will eventually defect from your brand to another because they feel – rightly – that they are disposable. In order to fix it and really start to benefit from social-media relationships, companies need to start “looking people in the eye digitally,” as I like to put it. That means building relationships and then evaluating how well we’re fostering them by measuring the ROR.
EM: But how do you really create a genuine relationship with customers you may only interact with on, say, LinkedIn, Twitter, Instagram and Facebook?
TR: You can do that by engaging with them, being responsive, getting to know who they are and what is important to them, and more. Over the years I’ve been asked by a lot of people how they can be more successful in building relationships on social channels. And the one thing that keeps coming to the surface is the importance of being present when you’re talking to someone.
EM: What does “being present” mean?
TR: You know how it is when you meet someone at a conference or in a networking situation and they’re constantly looking around the room to see who else is there, looking down at their watch, or looking anywhere except at you? Those signals mean they aren’t really present in the conversation, so there is no true connection. The same principle applies to online business relationships. That’s why I’m a big proponent of “looking people in the eye digitally” as well as personally. Introductions and ongoing relationships on social platforms require the equivalent of the kind of human touch and eye contact that takes place in a trade show booth.
EM: What are a few ways a company can be present and look people in the eye digitally?
TR: We’ve developed a dozen ways, but here are a few tactics that companies can apply to their social-media tools. First, always address people by name the same way you might on a trade show floor full of visitors. Sometimes it can be hard to figure out a person’s first name by his or her Twitter, Facebook, or Instagram handle, but the human need to be addressed by name is still important. When you’re thanking people for a retweet or a share, for instance, make sure you mention them by name. You might have to search their profiles, blogs, or posts to find it, but do it.
Next, find something in a customer’s bio and make mention of it. The need for recognition goes beyond just using names. When someone takes the time to look at your bio, picks up on something there, and comments on it, you can’t help but respond favorably. For example, “Oh, I see you live in Park City and like to ski. I love to take my kids skiing.” Make sure it’s an authentic connection, however. If you’re not a skier, don’t say you are. Authenticity and sincerity are key.
There are many more ways, but those represent the simplicity of the concept. To give an example of this principle in action, when ELF introduced a micellar-water cleanser, customers didn’t think much of it at first, and they said so on the company’s website. Within 10 days, ELF reformulated the product and shipped the new version to everyone who wrote a review, along with a handwritten note from the research-and-development team. The takeaway here is that the more responsive you are to your audience, the more responsive they’ll be to you. And that’s where relationships are born.
EM: From what you describe, cultivating ROR seems labor intensive. What advice do you have for small companies that can’t afford a large social-media staff? How do they compete on a level playing field?
TR: It is labor intensive, but that’s the nature of creating any kind of relationship – personal or professional. That said, I think it can actually be easier for small businesses than larger ones. The owners have complete control, can jump in anytime and lend credibility to online communications, and employees – if there are any – don’t have to go through multiple levels of approval for their online activities. The whole staff, not just a dedicated social-media team, can be empowered to make cultivating ROR a regular part of their workdays right from the get-go.
EM: How have companies you’ve worked with reacted to the concept of ROR? Are certain industries more receptive? And by the same token, are any industries or companies more resistant to it?
TR: For the most part, companies have been slow to adopt ROR. They make the mistake of thinking social metrics such as Facebook fans, retweets, site visits, video views, etc., are just not measurable assets because they aren’t directly reflected on the balance sheet. But that doesn’t mean that they are without value. Also, ROR requires a commitment to consistent, labor-intensive work over a long period of time.
But in the past year or so, especially during the COVID-19 pandemic, I have seen an effort by many to wrap their arms around ROR’s value and start doing what they can to implement it. Consumer-packaged-goods businesses have been more open, but very often it’s for a specific campaign instead of an overall, holistic approach to customers. However, in the past year I have seen increased interest in ROR from the health care, medical device, and financial services industries.
EM: Is there a mathematical formula or equation for calculating ROR?
TR: The two ways I suggest companies measure ROR are cost mitigation and sales increase. Cost mitigation is defined as generating more impressions than traditional media for the same spend or generating the same number of impressions for significantly less money, the latter of which will most often be the case. This is purely a cost-per-thousand-impressions analysis. It’s a great measure for companies that have large marketing budgets and view social media as simply one part of their communication plans. It can also work for companies of any size that value brand awareness. The better the relationship with customers, the more likely they will share positive information about your brand.
In terms of sales increase, a valuable method for monitoring ROR is measuring annualized customer value. Typically, a consumer who regularly absorbs content that references a brand is a more valuable customer than someone who is not a fan, follower, or subscriber. This is classic ROR. They may spend more, visit your site more often, make more purchases, and remain a loyal customer for a longer period of time – or very often all of these. This is because you have formed an actual relationship with them.
In addition Jennifer Lund recently published her method of… How to Calculate Return on Relationship. I strongly urge everyone to take a look, very insightful.
EM: That seems like a long-term measurement, since you’d need to compare customer value year over year. After a trade show, exhibitors have had fairly immediate access to metrics such as the number of leads gathered, the cost per lead, and so forth, allowing them to evaluate their performance and course correct before the next event, if necessary. Are there any more immediate ways that marketers can measure ROR to gauge whether their tactics are working?
TR: ROR can be measured the same way as any other metric: in hours, days, weeks, or months, because it is a kind of constant assessment of how well you engaged with your audience. If you want a quick after-show (or these days webinar or online event) measurement, you might gauge how many prospects remembered you when you followed up with them after the show – or how many people reached out to say how much they enjoyed meeting with you or the conversation you had with them, or something thoughtful you did for them while engaging. These can all be counted quickly. Other versions of these questions measuring customers’ goodwill toward your company and its marketing could be asked after any amount of time.
Similarly, at any given time you could measure customer attitude in other areas, such as the quality of issue resolution, the speed or efficiency of their transactions, or perhaps the ease of interactions with your company. The more you build the relationship, the better those scores should be, and, consequently, the greater your sales.
EM: Would you encourage companies, then, to replace ROI with ROR?
TR: Absolutely not. It is not about ROR versus ROI. That’s because ROR ultimately enhances ROI. As you add the engaged, focused, relationship-building aspect of ROR, your ROI increases, often exponentially.
EM: How do you feel about automated social-listening tools or dashboards that companies use to preschedule their posts and automatically respond to those who mention their brands?
TR: I go for more of the hands-on approach and prefer live team members – and especially the company’s leaders – to be interacting and engaging personally. Listening tools are fine for some things, but they are not great at understanding context and daily application. They also tend to let companies fall into the habit of thinking of customers as lumps of data to be cross-tabulated and studied, rather than individuals to be cultivated.
EM: Are there any statistical studies showing the effectiveness of ROR?
TR: None that I am aware of, but I learned a long time ago to trust my judgement, common sense, and gut instinct, and that has always worked for me as I’ve built the sales of companies that were struggling before I arrived. I am sometimes asked by skeptics, “What’s the ROI of social?” I like to ask them back, “What’s the ROI of trust? What’s the ROI of loyalty?” I say if you want a successful business, build successful relationships first.
“Relationships are like muscle tissue,” says Ted. “The more you engage them, the stronger and more valuable they become.” Here are a dozen of his easy to employ tips for creating and maintaining customer relationships that will stay resilient and appreciate in value over time.
1. Always address customers by their real names instead of their online handles. When you’re engaging with someone on social media, take the time to find and use their real name rather than their social-media handle. It’s a little extra work but worth the effort.
2. Find something in customers’ bios and mention it. When someone takes the time to look at your bio, picks up on something, and mentions it or asks you about it, you can’t help but respond favorably. So make a habit of looking at other people’s bios when you’re opening up conversations with them.
3. Show them that you’re listening to what they’re saying. Listening is every bit as important online as it is in person. Stop thinking about what you’re going to say next and really listen to what the other person is saying. Reference something they said in an online conversation to show you’re paying attention, and ask them about it.
4. Make your communications personal and authentic. Look for possible connections, such as favorite books, destinations, etc. Find interpersonal connection points where your lives and interests might intersect. Make sure it’s an authentic connection that reveals something truthful about your interests.
5. Find and connect with customers on all possible channels, not just one. If you meet someone on Twitter, search for them on Facebook and LinkedIn. You never know where the next conversation might crop up that will spark an opportunity.
6. Give them an online recommendation. Spontaneously providing a long-term client with a recommendation or testimonial on a platform such as LinkedIn demonstrates genuine thoughtfulness. However, recommendations should be authentic and based on your knowledge of their business or interactions with them – not vague and empty platitudes.
7. Send a note with a helpful link or photo “just because.” Before the internet came about, a common practice in business networking was to clip out a third-party article about someone or a topic he or she is interested in, add a note, and drop it in the mail. Today, you can do the same thing via email or social media, but it should be on an individual basis. Share a link to an online article, video, or photo, and be sure to use their name and tell them why you’re sending it.
8. Ask questions to get customers’ opinions. Asking customers for their individual opinions shows them that you care about and respect what they have to say. Look for those opportunities to deepen your ongoing conversations with them.
9. Pick them out in a crowd. Jump into and participate in online groups, forums, and/or Twitter chats. Look for your customers’ names or handles, and make a point to say hello to them individually. Here again, personal recognition is key to keeping those relationship fires burning.
10. Wish them a happy birthday, and make it unique. When you get an opportunity to wish someone a happy birthday, such as with Facebook’s birthday reminder, make it personal. Find a good birthday quote or image they’d enjoy, or mention something unique about them. And, of course, always use their name.
11. Take it offline. Make it a regular practice to offer yourself publicly for short telephone one-on-ones to find out more about someone or just to catch up. Ask how you can help them network or even refer them new business. Inquiring how you can assist them builds great rapport and trust.
12. Visit profiles every day. Make it a requirement of your entire marketing staff to visit 10 profiles of customers on various platforms each day and pay attention to what they are posting about. This will give your team the background to know their customers and what really matters to them.