It’s Relationships, Stupid! The Small Business Return on Relationships

by on October 24, 2011

LIving in The South

Since I’ve been living in the South, I can’t help but fall in love with people like political strategist James Carville who announced, “It’s the economy, stupid”. He was explaining how a virtual unknown political candidate won against an opponent who had everything going for him. In his mind, people think—and vote—with their bank accounts.

While this may apply to the world of politics, it’s not necessarily true in business. Yes, people like to save money whenever possible. Nevertheless, if money were the only consideration for consumers, the big box stores would’ve completely wiped out local businesses years ago. Instead, small businesses continue to survive—and thrive—even in a struggling economy.

How is this possible? It’s relationships, stupid!

Develope the Relationship

Today’s consumer is concerned with more than just the cost of goods and services. They want to be more than just a number. People are tired of corporate greed and the impersonal nature of giant corporations that only seem to care about the bottom line. It’s time to stop thinking of marketing in terms of Return On Investment (ROI) and consider the importance of Return on Relationship (ROR).

For example, I’ve been using the same mechanic for years. He runs his own shop, and there are times when he charges me more than a chain would for the same service.

However, I continue to take my car to him because he knows me. He knows the make and model of my vehicle, where I work, and whatever pieces of my life I’ve shared with him—and so do his employees. Even more important is that they remember this information. The relationship I have with him creates a feeling of trust in me (an important quality for a mechanic) and keeps me returning. I want to know I give my hard-earned money to a company that values me as a person.

Interact With Your Customers

The ability to develop this kind of relationship is what you have going for you in your business. You can’t compete with the buying power and marketing budgets of big chains.You can—and should—know your customers on a personal level – a personal level that corporate bureaucracy doesn’t allow. No glitzy marketing campaign or deep discount can compare with this.

One way to develop these relationships is through social media. By interacting with your customers through message boards, blogs, and interfaces like Facebook and Twitter, you can get to know them on a personal level. They also get a chance to know you as a person—something that goes a long way toward building your brand recognition.

So how do you get out there and build relationships with virtual strangers? It’s not enough to set up an account to post promotions and updates. Social media is designed for interaction with other people. Get online and start communicating.

Build the Relationship

Here are a few tips:

Be real. All relationships must have a level of transparency. Business relationships are no different. For one thing, you are your brand, and sharing who you are is the best way to represent it. This doesn’t mean you have to share the most intimate details of your life with others. It just means that you need to be true to yourself and your core values.

Don’t post fake reviews or profiles. With just a little online research (and Internet users are a savvy group), anyone can find out the truth about you. Nothing will damage your brand more than dishonesty, and it’s very difficult to rebuild trust once it’s broken.

I noticed recently that a notable home exercise DVD company has come under fire for posting fake reviews about their products. The tip off for most consumers was the overwhelming number of glowing reviews about the products. No one will ever create a product that is loved by everyone, and this is especially true of exercise products whose results depend so much on the user. The damage done by these allegedly fake reviews could be disastrous, because now people don’t know if they can trust the company.

Read and respond. Social media platforms give you a great place to share new products and services or announce a promotion. However, if all you ever do is promote your company, your customers will start ignoring you.

Relationships require communication. A local restaurant used Facebook to announce a promotion for tickets to a recent sporting event. A friend of mine was curious about the event and asked a question about the event that had nothing to do with the restaurant’s promotion. The owner took a few minutes to answer the question. What stood out to me, though, was my friend’s reaction to the comment. She raved, “This is why I love this place. I feel like the owner knows me.”

You should have built into your social media strategy a plan for reading and responding to your customers’ comments. Even if you only have ten minutes a day, use that time to let your customers know you’re listening and care about them as people. If you don’t personally have time to respond, find a member of your team who can dedicate a few minutes each day to do so. Comment on their status updates, wish them a happy birthday, and respond to any comments they leave for you.

Listen

Listen. One of the great benefits of social media is the immediate access it gives you to what your customers are saying about your business. If you’re willing to hear the people, you have invaluable information that will help you create products and services targeted directly to the needs of your customers. Pay attention to what your customers are saying about you and make adjustments when you need to. Instead of anticipating the reaction of your clients, you can know directly what they think.

The Spanish clothing store, Zara, understands this. They’ve created a very successful business model that gives them the ability to pay attention to what customers like and don’t like about the clothes in their stores. Their model lets them target their products to what customers want to buy. In fact, they‘re even able to modify designs based on this customer feedback.

The result is a constantly changing product line their customers want to buy, and this leads to higher sales. You can apply this same concept to your own business by using customer feedback to modify your own products and services.

You got into business to connect with people through products and services they can use. Making a living at it is the added bonus. Social media gives you an unprecedented way to communicate with the people who believe in your enough to spend their money with you. Show people you care about them as people, and they’ll respond even more.



{ 10 comments… read them below or add one }

Brian December 18, 2011 at 7:01 am

It’s true that small business can’t compete with big companies however it doesn’t mean that they don’t stand a chance being successful online. Even though I’m not an expert in social media marketing however I’m a strong believer that relationship is the key to achieve success. People don’t buy stuff from strangers especially online. That’s why most businesses online participate in social media sites in order to build relationship with their potential customers and build their reputation online.

Reply

Mark Rogers November 1, 2011 at 6:23 am

Small businesses can’t afford to compete with big businesses in terms of advertising and promotion for the fact that they are just starting up in the business and an expensive ad is not such a good business move, so they turn to a cheap and even free advertising and promotion that is building relationship with their customers. Relationship would create a bond between customers and cannot easily be broken. Nice post.

Reply

JRPittman November 7, 2011 at 7:52 am

Hi, Mark – thanks for your thoughtful comment. Please note, however, the name on your comment has been edited to remove key words. Please refrain from adding key words within the “Name” field. You may, however, add a link at the bottom of the comment post for this purpose.

Having said that, you have a great point at the end. Relationships do create a bond, and that bond is not easily broken – a good point to remember. Thanks again for your comment!

Reply

B. Ligerent October 30, 2011 at 11:27 pm

With small businesses the relationship factor is key. But it’s also extremely important for medium, large, and ginormous enterprises.

1. You need to nurture the relationship between your brand and consumers. (Think of your brand almost like a person – with its own personality, its own way of communicating, of interacting, of reacting.)
2. You need to nurture relationships between your consumers/clients and individual employees of your company. (Customers interact with people whether it’s a mom-and-pop show or a global mega-brand.)

Small businesses can do so in a more informal way. Larger companies need well developed HR policies with regards to service, as well as Customer Relationship Management strategies, procedures, and plans.

Reply

Gabriella November 7, 2011 at 7:55 am

“Ginormous” – I love it!

Excellent comment, B., thank you. “Think of your brand almost like a person” – If business people could wrap their minds around this attitude, I think we’d start seeing a whole different way of business-to-client communication.

Thanks again!

Reply

Wasim Ismail October 29, 2011 at 3:50 am

Building relationship whether though social media or networking events or any other from does give your customers, that extra peace of mind and assurance.
To be honest people don’t like change, if something is working, and your enjoying the company the connection, why change, having a good relationship with your end users will also increase repeat sales and not only that, its a great form of marketing, as they would be happily to spread the word to others.

Just like in your mechanic example you would happily recommend and say ” go to this mechanic as he will take care of you, just say my name”…Imagine your customer base working for you in that way, Powerful stuff, but achievable.

Reply

Harry October 26, 2011 at 9:49 am

Yes, I agree with you, Relationship is important in every aspect of our life. Not only in business, because we are social creature, we can’t life alone, that’s why we need good relationship.

Reply

Richard Berry October 26, 2011 at 3:01 am

Really a nice post and relationships are necessary to build or to extend any company to the greater place and you can find your customers through your relations as well as your goodwill in your relations.

Reply

Tom October 25, 2011 at 11:37 pm

Well, things really change and the business world is definitely not exempted to that. Consumers are very practical and really value relationship more than anything. Establishing a good relationship with them is surely the best solution to have a successful business. Great post anyway. Thanks for sharing this one!

Reply

Raymond Deou October 24, 2011 at 5:20 pm

Fantastic article! Relationships do give any company an edge as it branches into loyalty too. So the better the relationship, the more loyal the person will probably be to the brand. Assuming that the product serves its purpose.

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