How to establish, build and maintain a business relationship – Part 1

A business relationship has some simple rules to follow, which even though they may prove trivial, are actually mapping the DNA of the relationship itself.

It is often claimed to enter into a relationship without asking for "permission" and without taking into account the simple rules guiding the dynamics.

It is not a closed and mechanical process, but an open system that has many variables, both in the main and secondary phases.

By following the simple steps that we go to list below, it is possible not only to have a guide to the general process but also to understand when something "goes wrong" at what point has happened.

Asking to build a relationship without following the simple steps is like building a home without taking into account the foundation, it seems like an overcome and redundant concept, but try to talk about mounting the windows just because you bought them while the walls are not straight!

The guide will be subdivided into 4 different sections, making it easy to read.

Topics first section

A - Establish business relationships

B - Build trust and respect

C - Maintain regular contact

D - Summary – Part 1

Establish and conduct business relationships

Establish business relationships in a manner that promotes goodwill and trust between the enterprise, its customers, and suppliers

Build trust and respect in business relationships

Identify and take up opportunities to maintain regular contact with customers and suppliers.

A - Establish business relationships

Establishing and maintaining good business relationships is vital – relationships may need to be created with:

• Corporate customers and clients
• Government customers – such as local and or national government agencies or authorities
• Private customers – these are individuals, couples or families
• Travel or tourism sectors – for example, historical tourists, medical tourists, eco-tourists

Customers can be classified by demographic characteristics:

• Gender – male or female
• Age – which may be a specific range or an age range
• Religion
• Income 
• Marital status
• Domestic and international – who may be further divided into ‘country of origin’ classifications.

Customers may also be identified & classified as:

• Regular customers – who use the business services on a ‘regular’ basis
• New customers – those who use the business for the first time
• Potential customers – those to whom the business has a chance to sell something
• Prospects – people or businesses who have shown an interest in doing business with or buying from the organization.    

A business relationship may also be developed with suppliers including:

• Wholesale businesses – these are businesses who sell only to the retail sector. They will buy from a manufacturer and on-sell to the retail sector
• Retail businesses – who buy from wholesalers and on-sell to members of the public, private individuals and other businesses
• Combined wholesalers-retailers.

Suppliers are important to businesses because they provide the goods a business sells and they provide a variety of services (repairs and maintenance; advertising; utilities) the business requires to sustain its ongoing presence in the marketplace.

Business relationships will also exist with ‘strategic partners’ – these are deliberate partnerships with other businesses to:

• Capitalize on a logical link between the partners
• Gain some operational advantage
• Engage in mutually beneficial promotions, advertising, campaigns
• Save money and/or increase sales or profit.

Relationships may also occur with finance companies:

• Banks – with whom the business deals on a day-to-day basis to:
• Process purchases through electronic (debit and or credit) payments
• Obtain change
• Provide overdraft facilities
• Financial institutions – used by the business for loans, lines of credit and or leasing facilities to:
• Purchase products and services
• Refurbish the property
• Extend and expand the business.

Relationships are also important with other businesses with whom you have:

• Service contracts – where the other business provides service, repair and maintenance services based on the terms of a legally binding contract
• Commission-based arrangements – where a business is entitled to receive a commission from another business whenever it refers a sale to them or makes a booking on their behalf with them
• Association- based linkages – where a business belongs to an association this membership can automatically create a relationship with other businesses who are also members of this association.

There will always be a relationship between the business and its employees – addressing issues such as:

• Remuneration – pay, wages, salary; which may relate to negotiation over pay rises, value of experience and qualifications, penalty rates applicable to certain times and days
• Working conditions – determining acceptable workplace conditions under which staff are expected to work
• Industrial relations issues – covering any issue impacting on the relationship between workers and management: covers a wide area including harassment, poor conditions, safety, lack of facilities, pressure
• Insurance – especially for workers’ compensation to cover staff in the event of workplace injury
• Occupational health and safety – addressing situations to ensure all staff, customers and members of the public remains safe while on the premises.

Business relationships with ‘industry bodies’ are also common:

• Government bodies, agencies or authorities with various industry, business or employment-related obligations imposed on them under a range of legislation
• Unions – who represented the rights of workers and lobby on their behalf
• Peak industry bodies – who represent the interests of an industry and of industry sectors to government, unions, the media, the public and funding bodies.

There is need to develop a business relationship with:

• Local councils – who may apply local by-laws and have local compliance requirements across a range of environmental, health and planning issues
• Local offices of national government agencies and authorities – situated locally to provide a base of operations for Inspectors to work out of, and a nearby office for businesses to contact in the event they require information or have to deal with the agency or authority.

Business relationships can be initiated:

• By you making contact with the ‘other party’
• By the ‘other party’ making contact with you.

‘Goodwill’, ‘trust’ and ‘respect’ are vital to business relationships.

Goodwill = positive feelings

Towards the business as a result of:

• The positive things the business does for the community – sponsorship of clubs, donations to charity, and support of people and local bodies
• The ways it conducts itself in terms of its ethical standards, compliance with legal requirements and the extent to which it goes beyond its legally imposed obligation
• Gifts – made to customers and potential customers
• Its public statements and actions about issues such as environmental concerns, supporting the local and national economies, employing locals, buying locally, and being part of the local community – in brief, being a ‘good corporate citizen’
• It's history – the track record of a business indicates the real way it does business and the real way it treats others with whom it deals. Advertising and promotion can (and is) aimed at generating goodwill but will never convince others unless the business genuinely does what it states it will do or has done.

B - Build trust and respect

Trust in a business relationship:

• Trust refers to the ability of customers (and other stakeholders) – suppliers, government authorities) to believe what is told/said to them and believe the business will do what they will say they will do when they say they will do it
• Trust is a result of actions and not promises – the business must ‘walk the talk’, not simply ‘talk the talk’
• Trust means customers can rely on the business to deliver what they have promised when they have promised it and at the price they said it would be provided at.

Basic pre-requisites for developing trust in a business relationship:

• Be very careful about what promises or statements are made – never tell customers or potential customers what they want to hear if there is a belief (or even a suspicion) the business cannot deliver on that promise
• Under-promise and over-deliver – if a customer is told they will receive an email within 24 hours, send them one within the hour; if they are told they will save 5%, make sure they receive a 6%+ savings
• Read any contracts or agreements before signing – to gain a full understanding of the obligations the business is under. For example, if a supplier requires payment within 30 days, make sure they receive payment within this time. Also note, signing an agreement or contract without first reading it still means all terms and conditions apply.

Follow-up on all things:

• Send quotations as and by the time promise
• Send information as promise
• Call in to see people as promised
• Call back if promised
• Honour promises made – even where this may cost the business money. If a price has been given and guaranteed, then that price must be the one charged

Make customers aware of any potentially negative aspects of a deal, arrangement, contract or booking – for example:

• If there is a cancellation (or re-booking, or change of booking) fee – tell customers about it and make sure they understand how and when it applies, and how much it is
• Avoid over-booking situations – where the business takes reservations knowing things are already fully-booked
• Avoid using terms giving a false sense of confidence or which simply something that does not, in fact, exist – for example, a ‘guaranteed’ booking really should be guaranteed and not subject to some internal interpretation meaning it is not really ‘guaranteed’. If certain seats, rooms or tables provide a less than optimal experience, tell the customers about the downside, the negative implications of their booking

Give customers what they are entitled to – even though:

• They may not ask for it – if a sale entitles the customer to a discount or a free item of merchandise, then all customers must be provided with this as it applies to the item or service they have purchased. Never play favorite
• They may not know it exists or applies to them or to their transaction

Advise them when:

• A new product or service they have previously shown an interest in becoming available
• A better deal on an item they have booked becomes, or is, available – such as a package deal providing the same inclusions but at a cheaper price
• A better alternative is available – for example, purchasing tickets ‘now’ will save the customer having to queue in the hot sun when they arrive at the attraction or amusement park
• A possible price rise for something they are considering buying is imminent
• They are close to becoming entitled to a bonus or discount – for example, a significant price reduction may apply to their purchase if they spend a small amount more on their purchase
• Maintain confidentialities – this means all the information about a customer or business must remain private and not disclosed to any other business
• Charge the prices quoted – charging a person or business what has been quoted (verbally or in writing) is a vital element of building trust with them
• Advise suppliers if more than what was ordered or more than what was paid for has been received – as opposed to keeping the ‘extra’ items and benefiting from their error.

‘Respect’ = the regard for others

It can be demonstrated by displaying:

• Consideration for them – and their situation
• Politeness and civility – treating them ‘properly’ and as they expect to be treated: using correct language; using their name; opening doors for them
• Getting to know their needs, wants and preferences – as opposed to believing their needs, wants and preferences are the same as everyone else’s
• Treating them differently to other people – that is, providing them with deferential treatment which shows the value placed on them as a person, business or organization
• Acknowledging and showing appreciation for their time
• Recognizing and appreciating the money spent – and the opportunities they provide for doing business with them
• Never taking them for granted, ignoring them or providing them with sub-standard products or services – always remember customers can spend their money any way they want: they are not obliged to spend where they have spent previously or with any business
• Identifying and showing due regard for individual differences – such as religious differences, social differences, special needs
• Demonstrating ‘nothing is too much trouble’ – when dealing with businesses and customers: spending extra time with them; being willing to change previously made arrangements
• Understanding every customer is a unique individual – with unique needs, pressures, limitations, and expectations
• Demonstrating a genuine desire to be of service – as distinct from providing limited service, or delivering service lacking in real customer focus.

There is a need to demonstrate respect and trust on an ongoing basis:

• Using the person’s name – regularly, all of the time: not just when first met
• Keeping appointment times – every time an appointment is made to see the person
• Maintaining a professional ‘distance’ from the person – refraining from becoming over-familiar with them: become an ally or trusted and respected adviser but it is inappropriate to try to become their friend
• Paying attention to their non-verbal communication – to identify signals or cues they want to change the subject, are unhappy with what is being done or want things to ‘hurry up’
• Refraining from being judgemental – where their customs, habits or preferences are different
• Dressing appropriately – which demonstrates they are worthy of the time and attention this requires.

C - Maintain regular contact

Opportunities for regular contact must be actively sought out and then used – they may include:

• Meetings
• ‘Get together’
• Parties
• Business events – which always include an ‘informal social’ component.

All ‘social occasions’ provide an opportunity to:

• Make new contacts
• Cement existing ones
• Learn new information.

Be prepare to: ‘Network’

Industry functions’ (product launches and exhibitions) are opportunities to make contact – plan your attendance:

• Take business cards – to hand out to contacts: always ask for their business card if they do not offer one
• Wear a name tag – showing name and business represented
• Determine contact to be made – plan a strategic approach to making new contacts, and ‘touching base’ with established contacts
• Take pen and paper – to record and capture questions asked, promises made or arrangements entered into it is good practice to always carry pen and paper

Membership of industry associations is a useful way of making and maintaining contact:

• Introduce self, explain role and distribute business cards – obtain contact details of others and promise to make contact
• Offer to be of use to others and to participate in efforts the association is making – these efforts often involve:
• Industry research
• Petitions to government
• Applications for funding
• Review or generation of industry standards, codes of practice and similar
• Volunteer for office bearer responsibilities – be prepared to take on ‘official’ roles to assist the association.

Cooperative promotions provide contact opportunities and can be based on activities such as:

• Sharing of market research data relevant to the promotion and target markets being considered
• Sharing advertising and promotional costs
• Developing and offering package deals combining products and services from both businesses – for example, a cooperative promotion involving a hotel and an airline would feature air travel (from the airline) and accommodation, food, beverages and entertainment (from the hotel)
• Joint acceptance of reservations and payment – taking bookings and payment on behalf of partners.

Cooperative promotions relationships demand:

• Honestly – this is the key requirement for this type of relationship. All parties must believe and be able to trust the other parties – without this, any cooperative or joint venture will fail
• Full and open disclosure – and total sharing of all relevant information
• Hard work – to ensure the mutually agreed goals are achieved
• Regular contact – to communicate progress of the promotion, fine tune activities and revise action to be taken
• Mutual support – so the relationship is genuinely ‘cooperative’ where all parties help each other: support may be practical assistance or it may simply be participating in discussions and listening to the problems others are encountering.

The telephone is vital in business relationships - it:

• Inexpensive to use – telephone calls are great value-for-money communication options, especially to local contacts
• Ease of use means they enable regular contact – the telephone is ‘always there’: telephone calls can be made when there are a few minutes spare
• Requires a schedule of calls to be truly effective – this should list the names of those to be called and identify a frequency and date for calls. The calls on this schedule should be diarized to ensure they are not overlooked

If people indicate they do not want to be phoned - do not phone them!

An attempt to call is not the same as talking to them on the phone.

Topics for discussion when making contact, the general comments – about:

• The workplace – business, levels of trade, issues of interest
• Family
• Events and happenings

Advice about:

• New information discovered – about business, trade, products and services, personnel, legislated requirements
• New or revised offers or deals available and forthcoming

General inquiries – about:

• Their business and family
• Their needs wants, and preferences
• Their level of satisfaction with the business and its service

Making undertakings – to:

• Provide information or other promised items
• Contact again.

Responding to questions – as asked by them:

• Business-related
• Personal
• Family
• Topical issues

Never raise or talk about:

• Sex
• Religion
• Politics
• Jokes
• Other people, businesses, organizations, agencies or authorities – with special attention to refraining from making negative comments about them or what they have said/done.

D - Summary – Part 1

When establishing and conducting business relationships:

• Ensure all potential and required businesses, bodies and individuals are identified
• Know why the relationship is necessary
• Meet or make contact with a person as distinct from an organization or enterprise
• Generate and maintain goodwill
• Build trust and respect in the relationship and sustain these on an ongoing basis
• Search for and take advantage of opportunities to maintain regular contact
• Establish and adhere to a regular contact schedule
• Share information.

Alessandro Borghi