Marketers, are you earning a Return on Relationship?
Are you looking at your customers as an opportunity to put cash in and get cash out of the investment in marketing? Are you talking about return on investment in your loyalty program? If so, you should take a new look at what true relationship means and how the inputs and outputs can be very different from simple ROI.
These days, customer loyalty is far more than points and rewards. In fact, true loyalty is about earning trust in a way that allows that customer relationship to be managed toward greater value like any other business asset. Author and Forbes Top Social Media Influencer Ted Rubin champions this idea in his book Return on Relationship:
“Return on Relationship™ (ROR), simply put, is the value that is accrued by a person or brand due to nurturing a relationship, whereas ROI is simple dollars and cents. ROR is the value (both perceived and real) that will accrue over time through 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.”
We take Ted’s expertise in customer relationship management and the return on relationship very seriously. Loyalty programs need to have tangible business outcomes that require a deep understanding of the customer. Those outcomes include:
• Efficiency – Loyal customers cost far less to recapture and form a conduit to access the loyalty of their network through brand advocacy. The value of a loyal customer is not just in higher sales but also in the ripple effect they have on others.
• Forgiveness – No one is perfect 100% of the time, and a loyal customer is far more likely to forgive minor missteps and support a brand through thick and thin.
• Greater Lifetime Value – Customers loyal to a brand are worth 10 times the value of a customer who shops for convenience or price.
• Social Insurance – In Ted’s words, this is “a band of ‘dynamic advocates’, always ready, willing and able to come to your defense in time of crisis or simply when you’re in need of support.” He is always quick to point out that this outcome has incredible ROI.
• Energized Workforce – Stirring your customers to brand loyalty has a powerful effect on your own people, as that loyalty becomes powerful positive feedback that energizes your staff and makes their jobs more meaningful.
Gaining that deep understanding means having a 360-degree view of the customer’s history with the brand, their personal preferences for how and when to engage, and the contextual circumstances of when they interact with the brand. As consumers become more mobile and social, and demand control of the moments of their engagement, the challenge is synthesizing widening event-streams in real-time. Is your brand up to the test?
Along with Loyalty Lab’s Matt Elders, Ted is presenting on Tuesday, June 18th at the CRMC Conference in Chicago, where they will discuss customer loyalty management. Learn more in this webinar and whitepaper.