While entrepreneurs remaining laser-focused on selling their products/services may augur well for their companies’ market prospects for the short-to-medium term, it also results in them losing sight of the bigger picture, which is, building and nurturing strong business relationships and partnerships to ensure companies’ long-term growth.
A strong relationship with a client or vendor will act like an asset in the event of an emergency as these stakeholders will provide valuable assistance. So, good and constant communication becomes crucial for building these relationships.
“Successful business owners seek out enduring partnerships among all of their varied constituencies—from vendors and corporate partners to investors and mentors. They understand the value of cultivating long-term relationships with the businesses and clients they serve and with those they rely on to keep their businesses afloat,” states Wes Wernette, who oversees marketing at Indiana-based FireKing Security Group.
Why The Topic Is Important?
As per a study from the Harvard Business Review, corporate alliances are growing in number, by about 25% a year, and account for up to a third of revenues and value at many ventures. Yet some 60% to 70% of them are failing at the same point in time. One reason behind this lies in the fact that some of the alliances involve interdependence between companies that may be competitors and may also have vastly different operating styles and cultures, thereby demanding more care and handling than other business arrangements, which the stakeholders are failing to ensure.
According to Kate Vitasek, an award-winning author and a faculty member at the University of Tennessee’s Haslam College of Business, some of the most commonly cited issues behind the breakdown of a business partnership are unrealistic expectations, disagreement over objectives, and poor trust and communication.
Using a University of Tennessee study, Vitasek gave the example of the tech industry, where companies show the tendency to primarily take on a transaction-based approach, especially in supplier and outsourcing relationships. Enterprises provide money for a set range of products or services with little to no value or interaction beyond the basic items included in that transaction.
“The transactional nature of these relationships means they’re often not sustainable for the long-term, leaving the partnership lacking the potential to deliver value beyond basic contractual obligations. While transactional contracts certainly have their place in the tech world, relational contracts designed to motivate win-win solutions over the long term will ultimately deliver greater value,” she stated.
Our article here will deeply focus on securing and strengthening relationships with business partners.
Feel Free To Over-Communicate
In healthy business relationships, each side depends on the other to keep informed. Offering status reports on projects or other ongoing collaborative ventures means the partner doesn’t have to ask for updates. For entrepreneurs, this may look like “way too much back-and-forth stuff,” but this approach helps reduce the element of surprise.
“Just as you want vendors to alert you immediately if there’s a shortage of resources or some obstacle in delivery, you should also be sure your partners know what’s happening at your end—and that you’ll let them know if and when a problem arises,” Wes Wernette added.
Practice Honesty
As a business partner, an entrepreneur must commit to honesty and transparency, while dealing with the stakeholders. This principle alone will do more to generate trust than any other action. People generally know when someone is attempting to manipulate the truth. Once someone gets a bad feeling about the entrepreneur and his/her business, it’s almost impossible to turn things around.
“In the same respect, resist the impulse to pretend you have all the answers. Don’t be afraid to say, I don’t know. People will appreciate your honesty, particularly if you follow up with a promise to find an answer to their questions or problems,” Wernette noted.
As per a recent PwC Survey, nearly all executives face challenges in building trust and understanding stakeholder needs, which can directly impact productivity, operational efficiency, and even the quality of products and services.
“Among respondents, 95% of business executives agree that organisations have a responsibility to build trust (up from 92% in 2023). The numbers for consumers and employees are nearly as high, at 92% and 94%, respectively (unchanged in the past year). There isn’t just a moral case for building trust — there’s a business case as well, with 93% of business executives agreeing that the ability to build and maintain trust improves the bottom line,” the study noted further.
Always Meet Your Commitments
“Being true to your word also enhances trust between partners. When you say you’ll deliver your product by a certain date, it’s vital to move heaven and earth, if need be, to meet this commitment. Knowing that you’ll meet a promised deadline relieves your customer of any concern that things might go wrong at your end; being free of that concern also builds tremendous goodwill,” Wernette remarked.
Offer Your Knowledge And Resources Freely
In a healthy business relationship, each party should be willing to share knowledge and resources. Take loss prevention and asset protection for example, which are critically important concerns for businesses. A company that specialises in security products provides even greater value to clients and other partners by sharing its expertise in business security strategies, sending along relevant articles and white papers, reporting on industry trends, etc. regardless of whether or not sharing such knowledge leads to a sale.
Stay In Touch With Your Partners
“Without proper nurturing, business relationships can wither and die just like any other kind of relationship. Set up an automated system that reminds you to stay in touch with your partners regularly. Social media tools and platforms also make it easy to stay connected,” Wernette observed.
Remember The Personal Touch
“A business relationship that relies solely on email and texting lacks the grounding that comes with personal contact. Look for opportunities to meet your business partners face-to-face, in a social setting, or at a trade industry event. These experiences can significantly deepen the quality of your relationships,” Wernette explained.
Securing and strengthening a business partnership takes time and effort, but becomes beneficial for businesses in both good times and lean times. A strong relationship with a client or vendor will prove to be an asset in the event of an emergency or if a business issue arises in which they can provide valuable assistance.