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Many Social Media advocates see RED when asked about the ROI (Return on Investment) of Facebook, Twitter, YouTube, Blogs, Pinterest and other Social Media. The question itself evokes the idea that if something doesn't produce short-term, immediate profits, it has no value.
Perhaps when a dealer principle spends a million bucks on a facelift for his building, he is only doing it out of pride. I don't think so. He or she knows the value of impressions.
Perhaps when a dealer principle spends big bucks on a comfortable waiting room for service customers, he or she doesn't think about the ROI of making your customer happy and content. I don't think so.
Social Media is a way to build relationships with your customers that make them loyal advocates for your business.
And relationship is the first "R" in the five "Rs" of ROI.
Building relationships with your customers makes them return again and again. When they need an oil change, they pick up the phone... not the mouse. They don't get on the Internet and shop for the best and lowest price oil change. They just make an appointment.
That's called Retention and that's the second "R" in the five "Rs" of ROI.
When your customers are loyal to you and advocate for you through word-of-mouth advertising via Social Media, other people listen. They believe recommendations from their friends and family. They will often make decisions as to where to go based upon these recommendations. They have noticed that you have a good Reputation.
Reputation is the third "R" in the five "Rs" of ROI.
When your loyal customers (fans) recommend you, in online reviews or on Facebook or Twitter, it often results in referrals. Referrals often times have a greater closing ratio than even previous customers. That, as we know, equals profits.
So Referrals is the fourth "R" in the five "Rs" of ROI.
If I was Sherlock Holmes, I would say, "Elementary, my dear Watson." And here's the formula:
Relationships = Retention = Reputation = Referrals = ROI
In closing, I want to thank one of our customers, Susanne Woods, for coming in for an oil change and asking to see the "Facebook Guy". I really enjoyed our conversation.
I look forward to seeing you the next time you come in. (And that's for real people!)
Written by Tom Gorham
Editor, From The Trenches