The Real ROI of Engagement

Loyalty means business

We are bombarded by "feel good" social media advice. Join the conversation. Engage. Listen.

But this stuff takes time and effort. Where is the return on investment?

It's not just about chatting, and the ROI is not found by simply throwing up a Facebook page.

If you are struggling to convince your boss (or yourself) that the effort of engaging your customers and prospects is worth it, the two headline reasons you should work on engagement are:

1) If you lose as many visitors as you attract then you are making your marketing twice as difficult.

and

2) It's harder and more expensive to attract new customers than it is to keep existing customers happy. 

"According to the Customer Service Institute, 65% of a company's business comes from existing customers, and it costs five times as much to attract a new customer."

Beyond dollars and ROI

Rather than just think about money spent versus money generated, think about how relationships and engagement moves your business forward (or site, blog, mission, etc). I am sure you realise the benefits of talking on the telephone with customers goes way beyond the cost of the call and your time to make it, so let's hold email and social media to the same standard, eh?

Fact is, there are many real business reasons why you should work on relationships with your audience and especially your customers. The rewards go beyond having people feel warm and fuzzy towards you, and everyone should be aware of these rewards.

The biggest reason for me?

Sonia Simone of Copyblogger jokes that she is the world's worst salesperson because she could not sell raffle tickets to her Grandma. I joke that I am even worse than that because I wouldn't even try.

By keeping my audience and customers happy I don't have to sell anywhere near as much.

Many people focus on the technological aspects of CRM ("Customer Relationship Management"), and to be fair I did spend a lot of time with technology when working with clients large and small, but as with most of these kinds of things, people are more important. You can do a lot with simple spreadsheets.

Read on to find out how this works.

1. Understand your market

It starts with understanding your customers so you can work out what makes them tick.

• Listen to people in social media
• Talk to prospects
• Especially talk to customers
• Keep in touch with prospects and customers
• Make it easy for prospects and customers to keep in touch with you over time

The more you can empathise with your target market, and identify the people within that market that you can most help, the easier it is to reach those people and communicate with them.

Yes, if you have the budget, you can still blanket the general population with your messages, but it is far better to talk to the specific people who will be receptive to your solutions with the precise outcomes that they are looking for in the language they understand.

By talking with your prospects and clients today you can find out what your future clients are looking for, how the market is evolving, and where they want to go next.

2. Stop the leaks

Your whole funnel will have leaks.

Ted Kolovos has made a specialty of looking at a customer's business and optimising it, and one of the key ways he does this is look for ways you are leaking profit. In a conversation we agreed one of the main ways that businesses lose profit is through prioritising attraction over retention.

As mentioned earlier, it is harder to attract new people than keep existing people happy, but it goes beyond that.

There is a good reason that people who joined my list several years ago might take action and buy something today. I want to know those reasons both in favour and against!

• Consider how many times you have been convinced to sign up to a newsletter, but the content afterwards does not live up to the promises?
• Count the many companies you come across who incentivise new customers but neglect existing ones, even to the point of not allowing existing customers to get the best deals?
• How is your behaviour triggering behaviour in your customers and prospects?

I often say common sense is seldom common practice, and this is one of those times.

Look at your data. Talk to your people.

• On which auto responder message do most people drop out?
• Where do most of your quality leads come from?
• Where do your poor leads come from?
• Which messages get people taking action?

3. Nurture customers into long term customers

It's not just your lead funnel but your existing customer list that requires nurturing and monitoring.

Of course I get many one-off clients, and that is a given. That said, I have customers that date back to when I first started my business. My customers often turn into friends through these extended relationships.

Return customers are both much more profitable but more enjoyable too! My favourite part of my business is helping people. If I never had to sell anything again and just do helpful articles, forums, emails, webinars, coaching and Q&As I would be a very happy man.

4. Attract your best new customers more easily

I have spent a great deal of my career elbow-deep in marketing databases and CRM systems. All that data supports the fact that your best customers are not necessarily the ones who buy your most expensive stuff.

Does that surprise you?

There are two other factors:

1. How recently did they interact or transact with you?
2. How often do they take actions with you?

Someone who bought your highest ticket product a year ago might be less loyal than someone who bought three moderately priced products over the same period.

Think about it, how loyal are you to the company you bought your last bed from? Now think about things like your Netflix subscription, newsletter subscription, memberships?

Your best customers will have attributes in common, similar behaviour, and they might have been referred from similar places. Find out.

5. Understand, communicate, rinse, repeat

It's not about data, it's about understanding your business and not leaving things to random chance.

Find out WHY they join your list, why they leave, why they do or do not buy something , and why or why not they buy something else. Score your customer database to find your very best customers and do your best to understand them so you can clone them.

Obviously you will want data plus the experience of working with these folks, but it starts with your data.

Bottom Line

OK, you could be happy selling your ebook to one-time buyers over and over, but I think it is much more fun and profitable to have a collection of solutions and options so you can help more people in the ways that make sense to your best customers.

As well as making more money, finding ways to up and cross-sell to your existing customers can help you build a much more solid and more enjoyable business.