Relationships and Stakeholders
As all things relationships also come with an expiration date. Even though it might not be a 3-day expiration date stamped on a package it does not mean that it will not come. Relationships are basically also just a product – a product of invested time and effort. And here comes the question – when do they expire?
Drama and tears might be reserved for personal relationships but the end of a business relationship should be just as dramatic. Business today is run through leaning on a vast number of relationships and cannot be run without them. We talk about our customers, our suppliers, our partners, our broader network, our governmental links, our international relations and so on. Every business has a number of critically important relationships and an enormous number of less important ones.
Those relationships are different from a management point of view and require different policies. However, what is common for them all is that they should be a primary concern of management as developing relationships is an investment in the future of the company. They are a time and resource craving process and that is another reason why relationships should be valued high – building new relationships – when possible – costs much more than maintaining established ones and sometimes costs the company’s position on the market.
So when do relationships expire?
Relationships – no matter whether it is a B2C or B2B – characterize with mutuality. That means that they have been established because both parts believe in the benefits from the relationship. They develop in time if the benefit lives up to expectations. And they cease to exist when such benefit lapses.
In practice this means that maintaining a relationship includes not only establishing it and working on the agreed terms but actively looking for development opportunities. If we look from a B2B point of view this translates as the need to be better than competitors, to offer more revenue, both in terms of cash and image enhancement. You are not unique as a company as there are hundreds of similar companies out there trying to do better than you. That is why what you should do when working on developing B2B relationships is to focus on answering the main questions: What are the benefits of this relationship? How can we make them more salient? Is there place for development? Is there something we could add? How can we gain more from the relationship? Are there companies who can offer something better than us? How important is this relationship for our business? Can we trust each other? What will keep us together? Can we work better together?
Those questions should be answered both by management and in cooperation with your partner. Business relationships are much like personal ones. They require discussion and agreement. The difference here is that even though some of them are driven almost completely on personal basis, they are still benefit-based. If you want your business to succeed you maintain only relationships that are beneficial to you. That is why focus on value creation is more than necessary.
If we take the B2C perspective, things are generally the same. However, it happens only rarely that a company has enough contact with its customers to be able to discuss mutual benefits. That is why maintaining the relationship with your consumers requires the employment of different tools. Some of those include market research, consumer research, bench marketing, and innovation. One should of course also consider market niche, positioning, and market segment. From a positioning point of view the product should deliver what it promises – quality, low prices, high prices and prestige, etc.
However, satisfying the expectations of your consumers is not enough. Once again you should make sure that your offer is better than the offer of competition. And there are many ways you could differentiate yourself. In the last decade or so though, a certain method has shown quite good results. You should listen to your customers, understand their concerns and help them solve their problems. That means you could support the local football team or buy medicines for the nearby hospital. Doing that will add value to your product and buying will not be a random choice but a meaningful decision.
Drama and tears might be reserved for personal relationships but the end of a business relationship should be just as dramatic. Business today is run through leaning on a vast number of relationships and cannot be run without them. We talk about our customers, our suppliers, our partners, our broader network, our governmental links, our international relations and so on. Every business has a number of critically important relationships and an enormous number of less important ones.
Those relationships are different from a management point of view and require different policies. However, what is common for them all is that they should be a primary concern of management as developing relationships is an investment in the future of the company. They are a time and resource craving process and that is another reason why relationships should be valued high – building new relationships – when possible – costs much more than maintaining established ones and sometimes costs the company’s position on the market.
So when do relationships expire?
Relationships – no matter whether it is a B2C or B2B – characterize with mutuality. That means that they have been established because both parts believe in the benefits from the relationship. They develop in time if the benefit lives up to expectations. And they cease to exist when such benefit lapses.
In practice this means that maintaining a relationship includes not only establishing it and working on the agreed terms but actively looking for development opportunities. If we look from a B2B point of view this translates as the need to be better than competitors, to offer more revenue, both in terms of cash and image enhancement. You are not unique as a company as there are hundreds of similar companies out there trying to do better than you. That is why what you should do when working on developing B2B relationships is to focus on answering the main questions: What are the benefits of this relationship? How can we make them more salient? Is there place for development? Is there something we could add? How can we gain more from the relationship? Are there companies who can offer something better than us? How important is this relationship for our business? Can we trust each other? What will keep us together? Can we work better together?
Those questions should be answered both by management and in cooperation with your partner. Business relationships are much like personal ones. They require discussion and agreement. The difference here is that even though some of them are driven almost completely on personal basis, they are still benefit-based. If you want your business to succeed you maintain only relationships that are beneficial to you. That is why focus on value creation is more than necessary.
If we take the B2C perspective, things are generally the same. However, it happens only rarely that a company has enough contact with its customers to be able to discuss mutual benefits. That is why maintaining the relationship with your consumers requires the employment of different tools. Some of those include market research, consumer research, bench marketing, and innovation. One should of course also consider market niche, positioning, and market segment. From a positioning point of view the product should deliver what it promises – quality, low prices, high prices and prestige, etc.
However, satisfying the expectations of your consumers is not enough. Once again you should make sure that your offer is better than the offer of competition. And there are many ways you could differentiate yourself. In the last decade or so though, a certain method has shown quite good results. You should listen to your customers, understand their concerns and help them solve their problems. That means you could support the local football team or buy medicines for the nearby hospital. Doing that will add value to your product and buying will not be a random choice but a meaningful decision.
A bit of a warning here though – such an involvement can bring you great benefits and image enhancement when being an honest act but it can also destroy you if dishonesty is found by your stakeholders.
Another tool you could use to maintain your consumer segment are the very popular discount or loyalty programs. Most of the time they have proved to be quite efficient. The only downside is that they will not ensure you loyal consumers in the long run.
That you could achieve by involving them. Be transparent. Be responsible. Give them a look inside. Give them the word and let them be part of the company’s policy. No one can tell you better what your consumers want then your consumers. Listen to them and empower them. This way they will stay with the company as they will be part of it.
It is true that it is not always such tactics could be used but the ones described here are only a small part of all possibilities. Different businesses and different countries present with different challenges and very specific solutions to very specific problems. When talking about relationships generalizing is almost impossible or at least incorrect as relationships are unique and defined by a long list of factors. They should be treated as unique. Time and resources should be invested into continuous research and relationship development programs. As relationships do expire. They expire in that moment when you think that there is nothing more that should be done.
Will it be worth it to realize it the moment after?
That you could achieve by involving them. Be transparent. Be responsible. Give them a look inside. Give them the word and let them be part of the company’s policy. No one can tell you better what your consumers want then your consumers. Listen to them and empower them. This way they will stay with the company as they will be part of it.
It is true that it is not always such tactics could be used but the ones described here are only a small part of all possibilities. Different businesses and different countries present with different challenges and very specific solutions to very specific problems. When talking about relationships generalizing is almost impossible or at least incorrect as relationships are unique and defined by a long list of factors. They should be treated as unique. Time and resources should be invested into continuous research and relationship development programs. As relationships do expire. They expire in that moment when you think that there is nothing more that should be done.
Will it be worth it to realize it the moment after?
DIDI
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