It's common for nascent businesses to be short on supply or short on cash. Their most valuable resource, however, may be one that doesn't appear on the balance sheet – quality business relationships.
"It's absolutely essential for a startup with limited time and resources to build business relationships," said Alistair Dodds, co-founder and marketing director of EIC Marketing. "They are the key to the discovery and referral business." And unlike cash, strong business relationships are not a diminishing resource – a properly maintained network can only multiply.
Depending on the business, a strong network may range from customers and clients to suppliers, buyers, outsourced service providers, the government, media or even competitors. While the context may vary, all require the same foundation of amicability and trust.
"Individuals naturally will want to expand the business they do with people they enjoy working with and, in many cases, may even create other business opportunities for those they enjoy working with," said corporate law attorney Emily Brackstone, shareholder at Baker Donelson and vice chair of the firm's emerging companies team. "There is no better source of business than referrals from satisfied customers."
We spoke with small several small business owners and experts on how such relationships can be grown, nurtured and – worst-case scenario – dissolved.
Types of business relationships
Business to business (B2B)
The highest-priority B2B relations are typically those either up or down the supply chain, as operations are going to be dependent on such relationships – a cosmetics company could not do business without its upstream suppliers or downstream retailers. But while not every business has such vertical supply chains, horizontal networks also provide opportunities for partnership. Roger Wood, business development director of GSM Finance, refers to these as "adjacent" businesses.
"These are businesses that are not direct competitors of yours but who have a similar customer profile," said Wood, who works with small businesses brokering equipment loans and lease deals. "One slightly left-field example could be a florist and a funeral director."
SMBs may also be surprised to learn of the advantages of building relationships with competitors – if not for intel purposes, then at least for quid pro quo referrals. "I'd suggest it's better to build them whereby your geography or key services don't overlap," said Dodds, who maintains relationships with other digital marketing agencies worldwide. "We provide leads, intros and new business in the skill sets we know they specialize in – and which we don't – and, in return, they are happy to return the favor."
Business to customer (B2C)
Quid pro quo referrals can also have positive ripple effects in another type of business relation – customers. Businesses that put the customer's needs over an immediate sale by referring them to a better-fitting competitor are more likely to be perceived as trustworthy, which will pay dividends.
"Building trust is a critical factor in fostering quality business relationships," Brackstone said. "People prefer to do business with those they can trust to act in furtherance of, or at least not opposed to, their best interests. Once that trust breaks down, it can be difficult to salvage a relationship."
Other customer relationship factors to consider are product satisfaction – ensuring that the product or service you provide meets the standard your clients expect – and open communication, said Brackstone.
You want to make it easy for business partners or clients to get in touch with you. Being hard to contact can make people doubt your reliability and make them feel less secure about doing business with you.
Nurturing business relationships
Networking
There's no secret sauce to building quality business relationships – though while the methods may be obvious, that doesn't make them easy (ahem, cold calling).
"If I was starting a business tomorrow morning, my first port of call would be to contact everyone I know," said Simon Paine, CEO and co-founder of Popup Bussiness School. Paine recommends drawing up three lists titled "must call," "should call," and "be nice to call," and to start dialing from there.
"Some people might consider making phone calls old-fashioned, but this is where your business takes leaps forward," Paine said. "Things happen when you speak to people. Emails and social media are all too easy to ignore."
Another way to build contacts from nothing is to offer free samples of your work, Wood said. "This can be either local people, industry-related people if you're in the B2B space or influencers in your industry."
This is where social media comes into play, not just as the mode of communication, but as the source of such contacts. Wood recommended joining a Facebook group for your industry – chances are at least one in your area will already exist. However, these are not to be treated as free promotional platforms, Wood cautioned.
"The trick to making the best of these [industry groups] is to always help others more than you promote yourself," he said. "Those who promote themselves or who suck value out of the group without providing their share of input will get a bad name."
The same rule applies when building customer relationships on social media. "There are common mistakes that businesses of all sizes make," Paine said. "They try and sell directly on social media and forget the social part, they don't target an audience and niche down enough – they are too broad brush – and thirdly, they don't do it consistently."
Rather than treating it as a passive marketing tool – where ads are blasted every so often and communication is one-sided – you should see social media as an opportunity to interact with your target base.
Customers are already expecting this level of engagement from businesses; for example, when they "at" brands on Twitter to declare appreciation or, more often than not, call them out on poor customer service.
SMBs can take advantage of this by meeting customers where they are – lurking on Twitter – rather than waiting for them to reach out through formal channels.
Settling disputes
During business deals, it's very common for disputes to occur, as the interests of different parties sometimes conflict. When this happens, keep things professional and refrain from lashing out with emotion. Brackstone advises calm, direct communication, preferably in person.
"Getting the parties together face-to-face in a room can often go a long way toward clearing the air," she said. "People often will behave badly over email, or even over the phone, but suddenly become much more reasonable when they are sitting across the table from the person. Be strategic about who is included in the meeting, however, as including someone with bad energy or a domineering personality can set the wrong tone."
Is it time to dissolve a business relationship?
If it is clear that a business relationship is not working, the individuals and companies involved should try to dissolve the relationship without creating further damage, Brackstone said.
"They should address the issue head-on, explain what is not working and suggest a reasonable course for the parties to extract themselves from the relationship," she added.
For the sake of your company's reputation, don't rush out of a bad client relationship without coming up with a viable compromise. Knowing how to resolve these issues properly can be the difference between one unsatisfied customer and a PR nightmare.
Source : bussinessnewsdaily.com
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