Over the years, businesses have measured results by ROI, and return on investment. You invest $100 in advertising and due to that advertising you gain 3 new customers who spend $1000. Your ROI is $900. Not bad. It is very easy to measure ROI, you have a coupon, tell them to bring it for a discount, you use web analytics, track phone calls, recalls. You can track loyalty, but are you tracking your word of mouth due to social media?
Today the new measuring standard is ROR or Return on Relationships. Return on Relationship is the value of a relationship that will accrue due to loyalty, referrals and sharing. You measure ROR by the amount of customer engagement… shares, LIKES and follows. It is the new form of word-of-mouth marketing, except word of mouth is now via Social Media.
A Neilsen Global Trust Survey says that 92% of consumers around the world say they trust earned media, such as word-of-mouth and recommendations from friends and family, above all other forms of advertising—an increase of 18% since 2007. Online consumer reviews are the second most trusted form of advertising with 70% of global consumers surveyed online indicating they trust this platform, an increase of 15% in four years.
As Social Media in a combination of smart glasses and technology will become even more of a game changer and affect each one of us. The ability to take a picture and verbal recognition on products and services, will make it easier to comment, Like and judge any product or service. Those likes and shares will become increasingly important in building your brand.
The concept is the same but different. You used to run a survey to ‘Listen’ to your customers. Today, you see how they respond, share and Tweet your products. You used to send out a monthly or quarterly newsletter, today we use Facebook to communicate our offerings. But do we listen and ask for comments or suggestions? That is the difference. The goal is to ‘engage’ you want comments, you want people to contact you, because if you do, that means you have their attention.
Both ROI and ROR are equally important, one is easy to measure. The other can be measured by web analytics and your social media analytics. The question is, are you paying attention?
