- January 8, 2018
- Posted by: Rebekah Dull
- Category: Consulting
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 intend to continue on in 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.” This includes both solo exchanges and functional relationships.
Solo Exchanges: 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.
Functional Relationships: 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.”
Relational Partnerships: 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.
Strategic Partnerships: 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 relationship depends on what industry you’re in. Whether it’s decided for you or not, it’s important to understand the types of relationships so you know how they work best and most effectively.
What type of relationship do you want to create with your customers?
Rebekah A. Dull, BA
Consulting | Marketing | Websites