We all seek that forever partner – in our personal lives, of course, but also in our professional lives, with a customer or supplier, for example. But as with any relationship, a lasting one is both tricky to find and difficult to maintain.
I talked about this in my last article (How Do I Love Thee), and ended with a promise to talk about how to forge long-term relationships. Such relationships are possible, and the good news is that you don't even have to have the lowest price to make them last. In fact, it's not about price – your prices can be higher than your competitor's when you have the edge of a long-term relationship.
Yes, you read that right: Having a low price is not necessarily the key to maintaining a long-term relationship. Here's a short story to illustrate my point.
I was once speaking to a big defense firm who sells to the U.S. government. (The government, of course, loves to nickel and dime every supplier and puts suppliers through rigorous bidding wars every five years.)
Of course, when I introduced the concept of long-term relationships, most of the audience thought I was naïve. Or at the very least, they considered me uninformed.
But a quick show of hands identified several managers who had indeed managed to have extremely long-term relationships (we're talking 25 years in length!) and didn't bring in the lowest bid. That's pretty impressive for an industry where conventional wisdom holds that such relationships aren't possible with the government.
How did these successful managers accomplish it? Read on. The bottom line is that even in situations where such relationships don't seem possible, they are.
First of all, recall that when you have a partner who seeks a long-term relationship, he or she is doing so because typically they feel vulnerable. Basically, they're buying something that puts them at risk (like a very expensive purchase, or one that -- if it doesn't serve the company well -- could put them out of business).
The question is, what can you do to give them the security they need? How do you let them know that you would be dependent on them as well if they chose you for a long-term relationship?
Start by building trust. Some of the misguided think trust is about giving customers information about yourself, or using personal information in a responsible way. These are certainly good things to do for customers, but will they build the trust for a long term relationship? Not as deeply as you need.
Trust is based on information of past behavior and promises. So whatever you promise, you must deliver...it's as simple as that.
Beyond that, trust is built by sharing of both the good things that happen in a relationship and the bad. Sure, you're around when things are going great, but are you around when everything is falling apart? If your company tends to run away from your partner when the economy falters or their business isn't doing so well, this isn't a long-term relationship.
You know you're building trust if you believe your partner would answer a resounding YES to the following three questions:
• Do you think our company is able to make adjustments in our relationship to cope with changing circumstances? Long-term relationships will always function in changing circumstances, do you think we're willing to adapt?
• Do you believe that we will inform you in a timely manner about events or changes at our company that may affect you?
• Do you think our company is committed to improvements that may benefit the relationship as a whole, and not just ourselves?
Good relationships are also forged with what might be called “signals.” These are anything that informs the other party that you're interested in a long-term relationship. This could be simply actions that show how positive you feel about the relationship, but also less specific types of actions like social get-togethers and gifts. Emotion is often talked about when it comes to signals, but you typically see words like respect, fairness, communication, and empowerment.
My sense is that most people have a good sense of what is a signal. We use it everyday to pass information between each other. What surprises me more is that some people don't recognize the power of a signal to positively influence a business relationship as well.
Not wanting to become dependent on a business partner is understandable on one level. But remember, we're talking about long-term relationships here. As I said before, your partner is dependent on you. So if you don't signal your willingness to be dependent on them in turn, you're living a fantasy.
Fresh Vs. Dried Flowers
If you want to really make your relationship last you have to use “credible commitments.” Some people go blurry-eyed when I use this kind of jargon, but here's why they are so important.
Credible commitments are actions that you take towards you partner that have little value in other relationships. Take my fresh versus dried flower question I asked last time. Most people say that it's better to give fresh flowers to someone because, well… they're fresh, or because they're more expensive. But that's not what makes them better.
Fresh flowers are best because if your relationship falls apart, you can give the dried flowers to someone else. But you can't recycle fresh flowers. The fact that the fresh flowers have little value in other relationships is what makes them more credible.
Here's a real life example. You go on a trip to see a business partner. While you're there, you could see other accounts. But what if you only took the trip to see that one partner? That would be more credible, because the airplane ticket is not being used in other relationships.
Companies that forge long-term relationships unwittingly use credible commitments all the time. The jointly develop projects, the results of which will only be beneficial to the two parties.
So the question you should always be asking yourself is this: What am I doing in this relationship that my partner will perceive as unique to this relationship and can't be easily reused in some other relationship? If everything you're doing is perceived by your partner as actions that could be given to just anybody, you won't be helping to build the long-term relationships you want.
How to Have an Uncommitted Relationship
Have the lowest price. Get your partner to focus on just what a great price you have. While you might sell them something, don't expect to have a long-term relationship. Why? Because if somebody comes by with a lower price than you have...it's goodbye.
Can You Break Up Great Relationships?
A discussion of long-term relationships isn't complete without a short discussion of divorce. When I've talked about this topic, companies always ask me how they can secure their competitor's customers. That's the same as being a home-wrecker. The answer to this question is complicated but the short answer is this: Don't try to break up really good relationships. You'll look bad. (Although you can break up poor relationships.)
For this reason, if you find a customer or partner who really wants a long-term relationship…don't blow it. Invest the time it requires. Competitors are always waiting in the wings. But if you deliver, it won't make any difference how many competitors there are.
So remember, long-term relationships are hard but profitable. Make sure you do them right. And make sure you give fresh flowers next Valentine's Day.
Continue reading "A Match Made in Heaven: Make Your Business Relationships Last" ... Read the full article
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