The Key to Business Success?Relationships! ...
Just like personal relationships, relationships in business take a long time to develop, and usually require a process that turns every touchpoint into an opportunity for open communication, trust, and mutual growth.
If I were to ask you, “What makes a business successful?” You would probably answer: a good product + customer service. And you’d be mostly right.
However, although important, these two elements are not the only thing. The one underlying variable that truly drives long-term success is relationships.
We all have heard about ROI (return on investment) – a performance metric used to evaluate the effectiveness of money being spent and the profit that it yields. Basically the quantifiable measurement is dollars.
If we look from a relationship perspective, a new and more effective term can be used – Return on Relationship (ROR). It provides deeper insights on the effectiveness of a business’ personality and its ability to connect with people. There is no traditional quantifiable measurement because the value is accrued over time through loyalty, recommendations, and trust.
If you own a business or have a Director of Business Development working for you, then it’s often frustrating to play the long game and wait for relationships to yield dollars.
Before owning my own company, I worked for many advertising agencies. And I used to get asked each week how much money I closed in deals. And I never felt satisfaction or approval from superiors unless I had a dollars and cents answer. It was an unrealistic expectation. With end of the year quickly approaching this pressure only mounts.
With that in mind, here is a tool to quantitatively measure the otherwise intangible ROR:
ROR CALCULATION
# of customers helped from the past 12 months
/
# of clients who came to you as a referral or repeat customer
= ROR %
EXAMPLE
50 customers helped this year
/ by
30 customers who came from relationships, referrals or repeat
= 60%
Calculating your company's ROR is a simple way to visualize your relationship-building efforts.
If you have a high ROR percentage, it indicates how often you provide value to your customer and how successful you are at nurturing strong business relationships. In contrast, a low ROR percentage implies that there are opportunities to improve existing relationships.
Ultimately, your ROR is a reflection of the relationships you create between you and your customers.
Stay tuned for my next article because now that you've calculated ROR...let's talk about how to improve your percentage through actions that you can start taking today!
SNEAK PEEK...
In order to attract new and retain existing customers you need to dedicate resources and invest into building strong, long-term business relationships that help people see the value and achieve their goals with your services.
But there’s more to it than just responding to emails on time, sending email newsletters, or being polite.
What else should you be doing?
Talk soon. Cheers!