What's your business? Featured

6:57am EDT February 27, 2003
You go to a restaurant, and your server bombards you with questions and specials when all you wanted was food and peace and quiet.

Or you drop off clothes at your regular dry cleaner, and they still ask your name, starch preference and pick-up date.

It is no different when your business sells to or buys from other businesses.

To "provide better service" when checking on a delivery, you must enter the shipment number, ZIP code or account number, then repeat this information when customer service finally picks up.

Or your landscaper agrees to design your building's grounds, promising you excellent service for his premium price, then fails to deliver. You fire him not only from the project but also from his long-term service contract.

In each pair of scenes, the first is a transaction business attempting a relationship and the second is a relationship business hellbent on making every transaction stick.

Is yours a relationship business or a transaction business? Each demands different approaches to sales, marketing, manufacturing, service and billing.

You run a relationship business when your average customers' sales grow over time. If your ongoing dialog results in you and your clients learning, trusting and doing more business together, take these steps:

* Sales efforts and reps must continually ask questions, learn about clients' problems and create custom solutions.

* Marketing efforts should provide expertise, exchange information and offer low-risk opportunities for trial purchases.

* Manufacturing and service operations must meet customers' perception of total customization at the undifferentiated cost your CFO demands.

* Customer service efforts must ensure your product meets the real and perceived needs of the customer.

* Bills should charge for the outcome, rather than for hours spent, activities performed or units produced.

You run a transaction business when every customer sale is the first and last you will likely make. When you have to resell customers each time you do business together, take these steps.

* Salespeople need to focus on meeting customers' acute needs, closing them fast when the time is right.

* Generate hot customer leads by making your offers simple, complete and irrefutable.

* Manufacturing efforts and processes must be efficient and continuous, creating as much value in delivery as in the product itself.

* Billing must be itemized.

There is no clear line between relationship and transaction businesses. Transactions don't occur without a trusting relationship, and relationships don't grow without interactions or transactions.

So decide what kind of a business you're running. Too many businesses confuse themselves into blowing relationships, transactions, and ultimately, profits.