Your customer, your supplier, your strategic partner, your vendor, your banker and others who help you execute your role responsibilities and do your job smoothly are all people that you have a business relationship with. Apart from delivering quality service or making timely payments ever thought about how your business relationships can be strengthened. Why? Well, look at the benefits of building a strong business relationship and see if you can think of any reason why you shouldn’t.
The benefits of building strong business relationships
The benefits of building a strong business relationship can be best illustrated with some examples. The benefits are also indicators of a great business relationship.
Ok so there are plenty of reasons why you should be forging strong business relationships. Now how did Raj, Sameena, Gautam and Shibu build these relationships? Is there a formula? Perhaps yes.
Building business relationships
Talk to a few people who have built great business relationships and this is what you will discover. While depending on one’s’ personality and creativity there are umpteen styles one can adopt, from enquiring about family to playing golf, to build a relationship, there are still some fundamental rules which apply. These tried and tested rules for building and sustaining a good business relationship are:-
- Learn as much as you can about them: What is their business strategy? What are their short term and long term goals? What are their company values? What is their internal structure and practices? Who do we need to know at the organization to build the relationship? Don’t just learn about them, act on that knowledge. When their needs change, be there to provide them with what they need to stay happy with your business. Knowing the client/vendor partner/ service provider in and out will help you extract better value over time from them.
- Set clear expectations and provide support: Tell your clients what you can and cannot do. Tell your vendors how they can assist you. Give them all the information and support they need to serve you. Suppose your six sigma consultant wants all key stakeholders to be there in the kick off meeting, ensure they are there.
- Strive for mutual benefits: If you want them to work for the success of your business, you need to also do the same for them. When you renew that contract with your supplier don’t just work out the savings you will make but also the value of additional business the supplier will enjoy. Highlight to your partners, the additional benefits they get from working with you – they will value your business more.
- Enjoy equal relationships: Interact with your clients / vendor partners on a platform of equality. Drive them to respect you for your intellectual contributions to their business. Look for these opportunities and play an ‘Advisory’ role to all. Once your intellectual contribution to their business creates value for them they are hooked to you - provided you keep following up with more intellectual contributions!
- Communicate: Inform them about changes that take place. Acknowledge mistakes and keep them informed of the corrective actions being undertaken. In difficult situations avoiding phone calls and emails simply because you do not know what to say or are afraid of saying the wrong thing will lead your client thinking the worst. If your business partner or client knows and understands your situation, they are much more likely to accommodate any inconveniences caused.
- Stay connected: Find ways to remain connected through phone calls, personal visits etc with people you want to further business with in future even if today they are not doing business with you.
- Connect emotionally: A 2003 Gallup study suggested that no matter how high a company's customer satisfaction levels may appear to be, "satisfying customers without creating an emotional connection with them has no real value.” Some of the ways you can connect emotionally with people you want to build business relationships with are by…
- Listening: Listen carefully to what they have to say, to their opinions and feelings. This way you will be able to empathize with them and understand their needs well.
- Telling stories: Sharing with your customers, stories of challenges you have encountered in business in the past is a way of humanizing who you are. These stories remind them that you are not all that different in terms of your aspirations, goals, as well as in terms of what you worry about. This increases their feeling of connectedness to you.
- Being thankful: Take every opportunity you can to demonstrate how thankful you are of them associating with you in business. It can take the form of thank-you cards, festival greetings, spending time with them over lunch etc.
- Being thoughtful: This requires knowing the different needs of different people. So while one business partner may value a book, another may value tickets to a cricket match and another an interesting article on the internet related to their business.
- Show appreciation: Always recognize a job well done. Everyone likes to be told they've done a good job. Give a ‘Best vendor’ award. Call your banker to tell him/her how much you appreciate him/her for doing a good job of managing your funds. Include your business associates in your company’s celebrations of business success.
- Act with integrity: A key component of having a successful business relationship is integrity ie., honesty, truthfulness, honour, veracity, reliability and uprightness. It is the quality of possessing and steadfastly adhering to high moral principles or professional standards. This means you honour your commitments be it making payment to a supplier or meeting your client delivery schedule. They will trust you because they know they can accept your words as honorable, without any hidden meaning or agenda.
- Refer business to them: Refer business whenever you can to a person you are in business with. Rest assured you will have earned a well-wisher for your company.
- Be responsive and punctual: Return all phone calls and emails as soon as possible. Your delay in response will be considered a sign of not caring enough for the relationship. Value their time. Be on time for your appointments with them.
- Be flexible: Being flexible when say a vendor cannot supply the required material, but is providing an alternate material, is important for strengthening the relationship. Instead of getting annoyed, try and understand the problem the vendor is having and how you can minimize the impact on your business.
- Don’t be rude: This is an obvious but important rule. If you don’t’ like the design options given to you by your website designer, there is no need to be rude about it. Give him/her feedback about what you like and want different in a nice way. Be pleasant and respectful at all times.
The Relationship strategy
Now is it possible and is it required that you build enduring business relationships with every person you interact with at work. No, that would take up too much of your time and energy. Everybody need not be rewarded with your loyalty. You should instead follow a relationship strategy that allows you to focus 80% of your time on 20% of the relationships that can help you reach 80% of your business goals. A core relationship strategy has five steps:
1. Develop criteria for ideal and nightmare business relationships: For instance some common criteria for ideal client relationships are:-
- Long-term revenue and profit potential (beyond one year)
- Fit with your personality style
- Fit with your target market
- A budget for your services, and willingness to pay
- Fit of their needs with your skills and capabilities
- Visibility of the client and their projects
- Opportunity for you to develop new skills, a new marketable product or service
You must choose criteria that are most suitable for you and make them as specific as possible. For instance it could be ‘The client will challenge me to remain on the leading edge of software design techniques and tools’.
2. Rank your relationships: Once you have a good list of criteria for each kind of relationship, you should list all your clients, vendors etc and rank them in terms of the criteria.
3. Focus on the top ones: Develop a plan to reach out to, and build your relationship with the top 20% on each of your list i.e., client, vendor etc. Most likely these 20% will turn out to be completely different from the ones you are today spending a lot of time on. Don’t worry about it.
4. Do away with the bottom ones: You should discontinue relationships that are a nightmare. That way you no longer have to tolerate poor service and serve clients who are unwilling to pay you adequately for your work. Part company gracefully and gradually. Explain diplomatically why you need to move on. Suggest to them some other resources that can help them.
5. Watch the middle ones: These are neither your best nor worst relationships. Relationships in this category are to be watched. Serve them well, and see if you can convert them to meet more of your ideal criteria. Focus your attention on your top relationships, but do not abandon the revenue and goodwill that comes from the middle of the pack.
If after having followed the relationship building rules and strategy you find you are still not benefitting, just give it time. It is going to bear fruit one way or the other. Take for instance what happened with us. We send our newsletter Prerana to all our existing and potential clients. A company we have been sending the newsletter for two years contacted us recently and we have signed a long term contract with them.