In order for your business to grow, you have to define what type of relationships you are looking to have with your consumers. Some business relationships are purely transactional while others are built on trust and are meant to continue on into the future. There are two basic types of relationships: market exchanges and partnerships.
Market exchanges are defined by a “transaction between a buyer and a seller in which each party is concerned only about its own benefit.” Personally, I do not conduct business with this type of relationship in mind. In some cases, it may be appropriate to be either a solo exchange or a functional relationship.
This is the most simple type of relationship where each party only pursues their own interests. It is purely transactional. Generally, as a seller of a product, you’re most interested in getting the largest margin with the biggest profit, while the consumer is most interested in getting the best bang for their buck. Typically the length of this type of customer relationship is the shortest in duration.
For a simple example, a solo exchange could be if I go on vacation and I purchase a t-shirt from a local shop. The duration of this transaction from start to finish is very short. I’m also not likely to purchase from this same shop again in the future.
These relationships are characterized by previous transactions. This means that a buyer continues to buy from a seller because it is beneficial to them. As long as the price is right and the delivery is reliable the buyer will continue to buy because it benefits them.
Partnerships involve investments and both parties are interested in succeeding together. “In a partnership, both parties are concerned about each other’s welfare and about developing a win-win relationship.”
Business can be personal, and that’s what relationship partnerships are. The buyer and the seller have a close personal relationship and are not focused on the details of the agreement because they trust each other. This is really a partnership between the individuals, not the businesses themselves.
These type of relationships are typically business to business because of the high necessity of investments. In strategic partnerships they are long-term and each partner is willing to make large investments in order to improve profitability. A good way to think about these kinds of relationships is “putting your money where your mouth is.” It’s no longer about trust but about actions.
Ideally, you want a type of partnership because they are long-term and focused on creating value and a win-win outcome. Although, sometimes the type of relationships you participate in depends on what industry you’re in. Whether it’s decided for you or not, it’s important to understand the types of relationships you want to have in business as well as the ones that may currently exist.
What type of relationship do you want to create with your customers?
Rebekah A. Dull, BA
Consulting | Marketing | Websites