Building Business Relationships

Are you struggling to create and keep profitable customers? Columns for Sales and Marketing Management who wants to build business relationships.
Tuesday, September 16, 2003

Too much detail too early hurts relationship building

Marchioness Townsend. "Never tell a man you can read him through and through; most people prefer to be thought enigmas." [Motivational Quotes of the Day]

Being proud the homework I did on a potential account, I spent the first several minutes of an interview sharing everything I knew. It turns out my research was accurate, my background was thorough, and I really knew my stuff. I didn't get the contract, in fact, the prospect was very upset with what I had to share.

It turns out, I knew too much about their organization. I used only public sources-- including news clippings, their website, and filings with regulatory agencies. I didn't have any inside scoop, or infiltrate their organization, but I was treated like a caught spy.

The problem was, most companies don't realize how many details are readily available about their current strategy, business process, challenges, and even strategic concerns. They don't realize how easy it is to predict their actions if enough time is put into learning about the people involved. Most companies would rather outsiders (especially solutions providers) not know there secrets.

A common mistake in marketing is sharing too much information, too soon. Many companies make assumptions about a customer early in an interaction, even coming right out to tell them. I described some of the challenges the company was facing based on the what I had learned about them-- this was probably my biggest mistake.

It was true this prospect was experiencing these problems, but as soon as I mentioned them, they denied everything. Most people become confrontational when you highlight their weaknesses.  You won't create a buying relationship if throw their problems on the table without adequate discussion.

Use questions to draw out the problem, and let the other person tell you what weaknesses they have. Even if a doctor knows what ails you, they still perform an examination to be sure their assumptions are correct. The examination supports the fact the doctor has adequate knowledge to diagnose the problem.

I thought I would impress the prospect with the details of my efforts, but the they didn't know the extent of my efforts and considered my observations pretentious. Consider carefully the outcome before sharing details about customer information you've collected in past interactions or through research. Your customer should be convinced you have put in adequate effort to diagnose the situation.

The point is-- don't prescribe a solution without an investigation that meets the customers expectations. When the customer is conscious of your efforts, they aren't surprised by the extend of your findings. If I would have explained that I had researching their organization, and had some questions that would clarify my understanding; I more easily could help the prospect derive the need for my service based on an informed dialog.

Justin Hitt, with over 10 years of experience in business to business executive relationships and strategic business intelligence; has reduced costs and improve customer loyalty for professional services and numerous other technology companies. Call +1 (877) 207-3798 or visit his website at

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How to benefit from more successful employees

Middle managers often fear powerful employees who are ready to bring the company forward. This message is for the executive who has to deal with them. These destructive managers hurt themselves more than anything else-- but can be prevented if they understand the benefit of helping employees be more successful.

  1. Invest in strength assessments for both employees and managers.  Some people aren't cut out for management, or even to be in your company doing what you expect them to do. Help people match their strengths to positions that best fit their interests. People doing what they like to do are more productive.
  2. Encourage regular job skills training at all levels of your company.  From your front-line to the executive suite, everyone should be involved in some form of regular training directly related to their job. Evenly applied, everyone benefits by increased productivity. The key is training related to an individuals position objectives in addition to skills for their specific job.
  3. Encourage managers to surround themselves with teams better than them.  How can a manager do a superior job if everyone on his team is always below him?  Help managers with their self-esteem, encourage them to bring people on their team who can help them achieve their objectives even if it requires skills beyond their own function.
  4. Regularly document the required skills to be a top performer in certain job roles.  Learn to model you best performers and share those best practices with other employees. How often do top sales people work with new hires?  Meet as a company and as individual job roles to discuss what is working and advancing company objectives.
  5. Utilize internal mentoring programs that indoctrinate new employees.  Formalize the age old practice of apprenticeship and mentoring. Match new employees with more senior ones to pass down best practice. Learn to work together gathering the best from each experience level for the common objectives of the organization. This also gives employees someone to turn to when they have questions that can save time and reduce frustration.
  6. Reward managers for hiring the right people and helping them excel.  Depending on your organizations objectives, consider rewarding managers for employees that stay, or special efforts on the part of a team. This doesn't mean financial awards, but do support positive efforts of managers to improve their staff.
  7. Upgrade the skills of employees across all levels.  Help managers improve with employees, establish a training program that provides both hard and soft skills. Useful areas that help managers appreciate better employees, include interpersonal communications, project management, resource planning, time management, and active listening.
  8. Encourage a tiered training environment that shares teaching roles.  Invest in outside training programs for a few team members on the condition they provide a workshop summarizing a key area of the program when they return. This translates outside knowledge to internal staff without the extra expense of training. Use brown bag luncheons, after work programs, and internal resources to share this new knowledge.
  9. Budget workforce enhancements as you would capital upgrades.  Just as you set aside funding for upgrading equipment, take the same effort in upgrades to the skills of your employees. Make available both corporate funds and departmental funds for training. Focus training efforts business objectives, but don't limit individuals only to training topics directly related to their current position.

By investing in your own employees you improve their productivity, increase their loyalty, and reduce your costs overtime. It is possible to lose this investment if they leave, but this is more cost effective than training new employees or functioning with less than adequate ones that don't regularly have their skills upgraded.

Justin Hitt helps executives build profitable relationships with customer, employees, and strategic partners. He can be reached by phone at +1 (877) 207-3798 or on-line at

4:19:46 AM    Join Newsletter

Tips to avoid problems with conditional relationships

Fed Nails WestLB For Tying Lending to Underwriting. Violator of Bank Holding Act accrues $3 million dollar fine and must change its "relationship banking" practice. [Corp Law Blog]

Not all business relationships are ethical, or even legal. A German bank settled charges that it violated the Bank Holding Company Act's anti-tying restrictions, pays a $3 million dollar fine and must change its "relationship banking" practices. Conditional relationships are dangerous and should be avoided.

One form of conditional relationship is conditional lending.   The practice of conditional lending in exchange for other services from the borrower is illegal under Section 106(1)(A) of the Bank Holding Company Act (12 USC 1972(1)(A))

Never use relationships to tie in special services or consideration. In most situations it can be illegal, but always can put your company in a difficult situation. Anytime a decision comes to, "If you'll do X, we'll do Y" outside of the negotiated contract of terms, then you are inviting trouble.

The conditional relationship isn't always very clear, in fact, when you look at exclusive contracts and other profitable supply chain relationships-- it all gets very cloudy. Here are some tips to avoid questionable relationships:

  1. Treat each transaction as an individual contractual event.  Each business transaction should stand on it's own merit, meaning, this transaction isn't happening because another transaction was made possible. There should be no conditions required for the relationship outside of those specifically outlined in the contract.
  2. Avoid linking consideration to another transaction at a future date.  If you give discounts today for something that will happen later, you put your company at risk that the proposed event will actually happen. This doesn't fall into play for volume agreements, and primarily applies to non-related activities. Always keep in mind the next tip...
  3. Always consult a lawyer about applicable law.  Various laws govern unfair business practices that limit competition, be sure you consult a lawyer before engaging in any business that is conditional on future events. Consider Microsoft's series of antitrust settlements, past business relationships have cost them both time and money.
  4. Maintain a proper level of disclosure and documentation.  Backroom deals will always happen, but for the protection of the organization, be sure to have them properly disclosed and documented. Decisions by individuals representing an organization are the responsibility of the organization-- proper channels must be in place to protect the greater interest.
  5. Use standard contract models appropriate for your industry.  While special arrangements will happen periodically, it is important to be consistent in your business practice. By using standard models for business contracts, you can avoid omissions that could come back to haunt your organization.

Justin Hitt helps executives build profitable relationships with customer, employees, and strategic partners. He can be reached by phone at +1 (877) 207-3798 or on-line at

3:56:31 AM    Join Newsletter

Last update: 04/08/2004; 2:35:34 PM.

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