2024 GLOBAL SRM RESEARCH REPORT
MAKING CONNECTIONS, NOT A QUICK BUCK
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the marketing industry, and it’s an ethos he continues to live by, no matter how much effort and energy it requires. “You have to walk the walk,” he says. “Relationships matter to me and if you say you care about them, you have to show you mean it. Don’t leave your voicemail full or ignore messages, get back to people and engage with them. If you ask for feedback from customers [or suppliers], really listen to what they’re saying and act on it.” Personal and political relationships may be trickier, but in business, taking a professional approach to doing the right things is actually pretty straightforward, he argues. And when you’re competing for scarce resources or the best access to talent - or in the case of cosmetics marketing, competing for sales in a crowded market - relationships can mean the difference between failure and success. “Customer experience is the only true branding and the only time you have a customer’s 100% attention is when they’re seeking customer service to resolve a problem, so you need to be there ready to help.”
“Return on investment is about dollars and cents, return on relationships is about people.”
Making connections, not a quick buck
This culture, like so much in business, has to be led from the top to succeed. “If you need help from Amazon or Apple they’re there. Airlines pick up the phone to speak to people because they don’t want you flying with another provider. In hotels, you can tell if the manager comes out of their office and cares by how clean and tidy it is and how staff treat customers. “I like to stay at Ritz-Carlton because all its staff - from the management to housekeeping - are empowered to ensure customers are satisfied. Up to a certain point, every employee has the ability to solve a problem. Empower your employees and they will empower your brand. That’s return on relationship gold.” Do your homework When trying to form a relationship it’s helpful to build up a picture of a person or company before you meet with them, says Rubin.
He calls this ‘looking people in the eye digitally’ and says pre-meeting prep is key. It is also a whole lot
simpler than it used to be. “In the 1980s you relied on
We speak to social media strategist, speaker and author Ted Rubin about the value of getting a return on relationships in marketing and sales, and draw parallels with procurement and supply.
microfiche and trade directories for information, it’s so much easier now. I find it appalling when I go to meetings with a salesperson who doesn’t have a clue what’s happening for that company - are they being sued, is there something positive in the news about them - it’s a two-second check to find out.” He also suggests people arrive early at meetings to scope out the general environment to get a sense of a place, its atmosphere and surroundings. “Check what kind of restaurants are in the area; ask if you can you go into the meeting room ahead of time to look for things that can be used to make an emotional connection. Find out what matters to them.”
It was while as Chief Marketing Officer for e.l.f Cosmetics that Ted Rubin persuaded bosses to hold off on the hard sell to customers. Instead, he proposed, they should use burgeoning social media platforms to develop relationships with them. “Fortunately the senior leaders scratched their chins and thought it was an interesting idea,” he tells us. It was in 2008 that Rubin began to use platforms including Twitter, MySpace and FaceBook to connect with consumers and take a longer term view to the marketing of the brand. “I was seeing all these conversations and it was clear how much our customer base loved it. I don’t buy from merchants who constantly haunt me with ads. If you start loading social media with crap, people will stop coming.” So instead of chasing extra profit to boost quarterly results, the company took time to create a following, raise brand awareness and give people a reason to return. “When you treat people better, the product does better.” The success of this approach led Rubin to start - as he puts it - “evangelising” the term ‘return on relationships’. As a marketeer, for him the phrase describes the value that companies can derive from building and maintaining strong relationships with their customers.
And it is distinct from simply focusing on acquiring new customers or making one-time sales. “Relationships are like muscle tissue,” he says. “The more you engage them, the stronger and more valuable they become.” Beyond money Now a speaker and author dedicated to spreading this message, Rubin says ‘return on investment’ (ROI) is about dollars and cents but ‘return on relationships’ (ROR) is about people. “It is the value accrued by a person or a brand (perceived and real) that accumulates over time through nurturing a relationship. You do this through loyalty, recommendations, sharing and the trust you build. ROR is a measure of the value that a business or brand derives from its relationships with customers, partners, and other stakeholders. And as a broader concept than ROI, it can also include non-financial benefits such as increased customer loyalty, brand advocacy, and social media engagement. Much like the advantages that come with being a supplier’s ‘customer of choice’ benefits may include - but are not limited to - reduced risk and costs; increased opportunities for growth; Trust leads to loyalty, and trust and loyalty will always lead to return on investment.”
better access to scarce resources (products, services, expertise); greater investment in the relationship; superior account management; and a level of commitment that sees suppliers willing to go the extra mile. Return on relationships is larger and more valuable than ROI, he says, because ROR is able to create the ‘halo effect’. “Two projects can have the same ROI, but if one was completed with better relationship management, it has the added benefit of a satisfied customer and/ or long-term relationship.” In today’s competitive marketplace, says Rubin, it is more important than ever for businesses to build strong relationships. “Engage, interact and add value,” he says. In the case of customers, he says those who are loyal to a brand are “more likely to repurchase, recommend the brand to others, and forgive minor mistakes. They are also less likely to be price sensitive”. The same can be said for the supply base. It is critical for businesses to build a reputation for being fair and efficient to work with since this will not only attract new suppliers, it will help them retain
those they already have. Authenticity and focus
Rubin doesn’t claim to have coined the phrase ‘return on relationships’, but it captured the imagination of
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