Return On Engagement: The New ROI For Small Business’s never been easy to own or manage a small business. But negotiating today’s whitewater business climate and rapidly-evolving communications technologies really puts your marketing skills to the test.

    That’s why Gail Goodman at the Huffington Post is all about “engagement marketing” and says you should be, too. These days you need to focus on return on engagement. ROE is the new ROI.

    Goodman’s premise is that “socially visible customer engagement will increase sales by driving more repeat sales and more word-of-mouth referrals.” If word-of-mouth referrals constitute a significant part of your new business, it makes sense that you should direct an equally significant portion of your marketing effort toward building relationships with those who can provide referrals – existing customers.

    Equally important, it’s cheaper to sell to repeat customers than to find new ones, another reason to do everything you can to fully engage with existing customers. Further, people prefer to do business with people they know. Getting to know your customers, and by extension their social network friends, should be a major marketing goal.

    Return on engagement is simply the payback on your investment in the engagement process. In this case you’re investing time rather than money by using communication tools such as social media, blogging and email.

    A superior experience is a good conversation-starter.

    Giving customers a better-than-expected product and buying experience gives them something to talk about. Invite ongoing contact so you can stay in touch. Ask them to sign up for your social media or email messages. And reward them with an exclusive thank-you discount, special download -- something useful and relevant to your business.

    Advertising is not engagement, whereas social networking is nothing but an engagement process – a gigantic web of interwoven conversations. But it only works as a marketing mechanism when the conversation is two-way. Developing true engagement enables your customers and even prospects to participate with you.

    By now we all know that “one-size-fits-all” actually means “fits none.” Therefore you’ll get better response if you take the time to craft your messages to fit the format you’re using (Facebook, blog, Twitter, etc.) and the audience you’re targeting.

    This doesn’t apply to me.

    If you’ve been telling yourself engagement doesn’t matter for your business, think again. Your brand – your reputation and image – is a critical part of the engagement process. If you appear out-of-touch, you lose credibility. What if your products or services are behind the times, too?

    Worse, it’s a fickle world, whether you’re selling to consumers or other businesses. Strong, consistent branding increases website traffic and encourages engagement from the get-go. You have to look smart and sound, well, engaging.

    Myriad studies have shown that third-party referrals and recommendations carry more weight than your advertising or other self-promotion. So engagement is a must. It also demonstrates you’re listening and paying attention, not just doing all the talking. That builds trust.

    Your voice should reflect you and your company’s personality, so customers and prospects can easily relate to you.

    Related: 4 Ways to Improve Engagement with Content

    Consciously work to learn more about your customers.

    The more you engage, the more you’re getting to know their opinions, wants, needs. You’re not only learning about them, you’re learning from them, so you can target messages better, improve products or create new ones. There’s no more effective engagement than using customer feedback to make decisions – we all love to be asked our opinion, and it’s the ultimate proof you’re listening.

    Customers will buy more, more often, and they’ll share your wonderfulness with others. You’ll forge ahead of the competition.

    So track individual customer behavior. And track your engagement behavior, too, to see clearly where you’re spending your time and effort and how well that’s working for you. That’s the “return” part – it has to be effective.

    Naturally your ultimate goal is sales. Tracking can be tricky, because the engagement process is somewhat amorphous and you often can’t connect specific engagement activities and sales. Nonetheless, you can track response volumes and repeat business figures, create rewards programs to track referrals and look for trends that show traffic or sales increases (or not) following special offers, etc.

    Use your imagination. Just remember that more fans doesn’t mean more engaged fans.

    Defining exactly what constitutes successful return on engagement for your small business will help you strategically focus your marketing and communications plans so you can achieve that success.

    Topics: marketing strategy - customer engagement - content marketing strategy - engagement marketing

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