Most businesses are starting to get an idea of how to use social media, but plenty more don’t have a clue when it comes to measuring something even more important – the relationship with their customer.
With SMEs getting a good hold of social media, management and customer relations expert Ted Rubin says now is a good time to think about how to track the effort they put into creating loyalty through the internet.
It’s a term he calls “return on relationship”.
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“Simply put, the term refers to the value accrued by a person or brand through a relationship,” he says. “It’s the value both perceived and real through loyalty, recommendations and sharing.”
“So ROI is dollars and cents – ROR is concerned with people.”
This isn’t a new problem. SMEs that have learned the ropes of social media usage may be clueless when it comes to finding out how much money they’ve made through Facebook or Twitter.
The chief social marketing officer of social media group CollectiveBias, Rubin is in Australia to speak at the Association for Data-driven Marketing and Advertising conference. He spoke to SmartCompany about how small businesses can start increasing sales through loyalty – a problem many small businesses struggle with.
Every small business can make a Facebook account. But how do they start using that to build sales?
“How you measure return on relationship depends on your business,” says Rubin. “What are you looking to accomplish?
“Think of the corner store; where the owner will remember your name, he’ll know your children’s names and he’ll know what you need.
“So you need to do that. You need to go beyond just what you’re selling. And if you’re an SME, you have an advantage – you’re likely to know more people by name.”
The idea of being open and honest on social networks isn’t anything new. But Rubin says there are three metrics you need to keep in mind when operating on social media – three metrics you should never forget.
- The lifetime value of a customer, and the likelihood they will continue to shop with you
- Their average order value
- Frequency of purchase
Whenever sales come to your site through social media, Rubin says, you need to be tracking these kinds of metrics. Otherwise, you may have a solid social media policy but without any means of tracking your progress.
But the other point Rubin makes is that not enough small businesses recognise these tools are easy to track.
“You don’t necessarily have to find the time,” he says. “There is plenty of content you can share on social media that allows you to be seen as a leader.
“There are too many people afraid to involve their own personalities, but that makes it so much easier. How easy is it for you and me to be ourselves? Why wouldn’t people on social media want to hear what we have to say?”
As long as businesses track those metrics, he says, the idea of “return on social media” may come easier.
“The most important thing is that you just jump right in.”