ROR – Personal versus Corporate

 

The concept of ROR in the corporate and business arena is very well understood – it’s called “Goodwill” http://encyclopedia.thefreedictionary.com/Goodwill+(accounting) .

Ecademy is a great example of a company where goodwill represents a very high proportion of the company’s value – perhaps not surprisingly for a social networking site!

In the business sense Return on Relationships is, therefore a function of goodwill generated towards the Brand(s) and Product(s) of a company. Whether it is a car, or a hair shampoo, people will make purchasing decisions based on factors relating to goodwill and as the value of the purchase increases (either emotionally or financially) the degree to which we Like, Trust and Respect a brand becomes more important.

This ROR is usually achieved by the brand owner through a heavy investment in sales and marketing activity, advertising, promotions, etc., etc. and requires a significant up-front investment and ongoing maintenance.

“Only 50% of my marketing works – I just wish I knew which 50%”

In personal ROR, the same fundamental principles hold true, but it could be argued that the investment model is very different.

- Firstly, it is very unlikely that a person would undertake a huge upfront “launch” and it may take some time to get their name “out there”, as we collect relationships and invest in them to build our brand on an ongoing basis.
- Secondly, the process of building personal “goodwill” is a two-way process and must involve some activities where there may be little or no personal gain in the short-term, some have called this “Givers gain” or “Paying it forwards”.
- Thirdly, the effectiveness of your personal ROR model is defined by the quality of the people you are connected with, the degree to which they are prepared to recommend you and whether or not they understand your product/service proposition well enough to be able to spot an opportunity for you – as discussed in “What is ROR……?” (see previous articles)

The most critical aspect in achieving high ROR for an individual is probably the quality of your network – you MUST be connected to the right people…….people you are happy to be recommended by and, in turn, to recommend. If your Reputation in the Marketplace works to full effect, you don’t need a sales force or a marketing department, because you have a salesforce of people without a salary bill and they are people who are recommending you because they believe in you – there is nothing more valuable than a warm, qualified referral!

Another key aspect is the way in which ROR will grow your personal value, but only if you invest in the right relationships. Imagine that you could have a full Board of Directors around you to help you run your business and advise you in Finance, Strategy, Marketing, etc. Well, the good news is that if you build a network of people you like, trust and respect and they are the kind of people you REALLY WANT to have around you, then you probably have this. Then every little nugget of advice they give you and every little nugget you give them, goes some way to investing in your personal value and to increasing your value and desirability in the marketplace in which you operate.