This blog post came about as a result of something SBNN founder Mike Watson said recently which surprised me.
“Do you know Alan, you’re one of the very few people who actually thank me for publishing a story?”
It’s true. I always do. Not just to Mike, but all my media contacts.
In a business world ever-more obsessed about turnover, profits and ROI, why do I take the time to do this? When I was a sub-editor on The Sunday Post why did I make time to proactively send my PR contacts PDFs of pages with mentions of their clients’ products and events?
The answer is simple – it’s all about relationships. And in the world of PR they play a big part.
Good relationships with key gatekeepers in the media, and other stakeholders you look to work with on behalf of clients, are crucial. They can and do regularly make the difference between getting what your client wants and not doing so. So they’re also a source of competitive advantage for my business.
When I meet someone new to business networking one of the bits of advice I offer is to think of the first time they meet someone as planting a seed of their relationship. Every time they have a positive interaction with them after that, they’re watering that seed so it can grow. In time, with the right nurture, it will grow into a healthy plant, or even tree, and bear fruit – for them both.
Another thing I did to build my relationship with Mike was to make the time to meet him in person. I remember being shocked when he said I was only the second PR to do so.
To me it was a no-brainer. Why? Because there’s nothing quite like it.
When you meet someone you subconsciously read their non-verbal communication – body language, tone of voice etc – and quickly make a judgement about whether you like and trust them. If that’s positive, you’re both on the road to a mutually-beneficial long-term relationship.
So why doesn’t everyone do this?
The big-picture answer is the classic short-term focus on monthly and quarterly revenue and profit numbers and ROI on time which has swept most industries since the 1980s. Especially so in those where there’s little differentiation between competitors to the point where their products and services are almost commodities you choose simply by price.
As a result you see a lot of M&A activity in those areas when the economic environment is most challenging. Look at how much of that is going on in the legal and accountancy sectors right now – both sectors very focused on ROI on time of fee-earners.
Incumbents in those sectors are vulnerable to new challenger brands with disruptive business models including a focus on Relationship Marketing (more about that later) and defended from full-on market forces by legal barriers to market entry – the need to have the required qualifications and membership of professional bodies.
The same ROI focus is true of most large PR agencies – classic corporate cultures who happen to be in PR. They, like me, have seen the hourly rates and fixed fees clients are prepared to pay tumble over the last few years as well as increased push-back from the monthly retainer model. One of the UK’s top PR people, who runs an award-winning agency, told me he didn’t know anyone who’s earning what they did 10 years ago.
ROI on time
So why am I not playing the ‘ROI on time’ game strictly and just sticking to emailing only what’s absolutely necessary to my media contacts?
Part of the answer is that I’m my own boss – so only answerable to myself on how much revenue and profit I’ve made and what the ROI has been. But the deeper answer comes from an article I read in the Harvard Business Review in 2005 while doing my MBA.
Good sales people have known this for millennia – “people buy from people.” In other words, focusing on relationships brings better results than concentrating exclusively on more rational factors like product or service features, benefits and USPs.
Earlier this year I wrote a blog post about the true cost-benefit calculation for taking the time to reply to an email saying “Thanks”.
I calculated that even if you’re charging £1000 a day (£125 an hour) for your time, that’s probably £4.17 ‘wasted’ in an eight-hour business day. Or £958.34 a year. That seems a lot, and worth saving, but there’s an opportunity cost to it too.
What’s the opportunity cost of not saying “Thanks!” – the value of the things you’ve given up by choosing that option?
The answer is we don’t know exactly. But it doesn’t take a massive leap of imagination to think of referrals never gained from the unthanked to new clients who might bring annual income far exceeding that. Or direct business with someone not thanked when they move to a bigger company which could be a client.
One of the life-changing things I discovered when I did my MBA was the difference between Transactional Marketing and Relationship Marketing. With the former you’re focusing only on that one transaction and trying to maximise your profit on it.
With Relationship Marketing you’re looking to get repeat business from that customer, so act in order to ensure they buy from you again and increase the total value of that customer to you in the long-term.
Unless you’re a postcard seller at the Statue of Liberty – who’s very unlikely to see a tourist again, transactional marketing makes no sense. For most businesses, especially ones providing a service, relationship marketing is more appropriate if your focus is on the long-term and growth. Many talk relationship. Not all walk that talk in how they act every day.
For me, focus on the relationship through simple things like taking time to say ‘Thanks!’ leads to a range of benefits including:
Differentiation (IMHO, the strongest of the three basic strategies)
Greater social media engagement from followers who you have a good relationship with (whose content you take the time to engage with), leading to greater reach of your posts and greater likelihood of them leading to new business and followers
Greater client and contact loyalty – key if you want your brand to become a Lovemark and enjoy long-term success, like brands such as Apple
More testimonials, referrals and LinkedIn Recommendations (I have 34 at time of writing)…which help create a virtuous circle of success
The most successful sales people don’t sell – they start and cultivate positive long-term relationships. And they always make time to say “Thanks!”