Return on Connections

There’s a phrase that’s common in business, ‘return on investment’. It usually means that any money or time spent on research or marketing should be made back with interest. It underlies a passive investment, that throwing money at a problem, say, marketing, should produce results or it’s just not worth bothering with.

The fixation is often solely on the money to be spent. In the changing world of business interactions that we’re living in today we perhaps need to broaden this definition of investment to cover more active investments such as online and offline networking. An expert in marketing will tell us that the power or success of a marketing message relies on the return on connections that the message has made. It really is ‘who you know’ or rather ‘who knows and trusts you’. The more and more high quality connections we have in business the more likely we’ll have to have that greater return.

People buy from people they like. People like people who talk to them and to whom they can talk with. It’s this two-way connection that is defining the new era (if you’ve ever heard of Web 2.0 then that essentially is what it means – two way conversations). The business model of large faceless monolithic corporation serving faceless plebs has run out of acceptance by newer generations. They want to buy from cool people who are just like them, or how they aspire to be.

Nowadays we have more ‘friends’ than any previous generation due in part to the contact management systems available to us such as Facebook, LinkedIn and Twitter. They allow us to be far more active in keeping those contacts familiar, with ongoing dialogues, than the address book of old which only ever prompted the annual Christmas card.

Business, like large ships, take so much longer to turn and respond to new ways of doing things. But it’s likely that increased connections and increasingly clever ways of managing them in a personable way will define new business. Soon we will all be asking the question, “how can I increase my return on my connections?”.

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2 comments on “Return on Connections

  1. I agree Ayd. Essentially the “return on investment” argument only focuses on one aspect of any transaction. But each item we buy, each service we consume, each business activity we undertake has another aspect – an emotional one. Unfortunately that can’t be quantified, so business leaders focus on what can be measured, the financial aspect of the transactions. In other words, did we make more money out of this than we put in?But they may have made more money from a particular investment at the same time as reducing, say, emotional commitment to an organisation by its staff. That has an impact on everything the company does, but it isn’t measured.Now, people are getting wise to the fact that people count just as much (sometimes more) than the money. HR people have been saying this for years, but never really listened to because there was no way of measuring the impact.But social networking tools, such as Facebook, LinkedIn and Twitter, now do give us a means of measuring the people impact of each transaction. We can, admittedly only in crude ways at the moment, begin to see a value in connections and friends. Soon employers might not want to know form marketing job candidates “did your last project make money”. They may want to know “did your last project make friends”.


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