With more corporate transparency, careers based on horizontal movement and the tendency of people to use e-mail, cell phones, conference calls, instant messaging and videoconferencing to communicate, relationships are getting lost. Not only does that make it more challenging for vendors to earn business based on quality solutions rather than price point, but it may also negatively affect the ultimate product or service delivered to the buyer. A vendor who knows a buyer’s needs as the result of a strong working relationship is in a much better position to deliver a superior solution.
“The greatest successes of my career can be attributed to relationships, as a vendor but also as a client,” says Fred Liesveld, executive vice president and managing director of Grubb & Ellis Company’s Detroit office.
Smart Business talked to Liesveld about the risks in today’s business climate and how solid interpersonal relationships can benefit not just vendors but also buyers.
Why is it crucial for buyers not just vendors to seek quality relationships?
My experience suggests that quality, price and problem-solving ability are based on depth of knowledge. The better vendors know their customers, the better they can be of service.
It’s easy to do business without taking the opportunities afforded by a good relationship, but having such a relationship puts both parties in preeminent positions to provide mutual services, satisfy each other’s needs and help solve problems.
Having a good working relationship also changes your mentality. A vendor in a good working relationship is contributing to something bigger than itself and that is satisfying.
The other side of that coin is when things get tough. Both professionally and personally, when I was in need of help in the past, it was always a relationship that came to the rescue. We have seen many companies over the years encounter difficult times, and the ones with good supplier relationships could rely on those suppliers for help, while those companies that made decisions purely on price point lacked suppliers with the knowledge and desire to make a difference in the companies’ recovery.
What are some common obstacles to rekindling ‘the lost art’?
Especially over the last 10 years, people have increasingly used impersonal technology to communicate, and relationship-building between sellers and buyers is becoming more of a challenge. In a global economy, the distance between buyer and supplier might be sizable 4,000 miles and technological advances make it extremely easy to communicate exclusively through e-mail or telephone. We see sterile RFPs and online bid competitions all seeking the lowest cost. As a result, a close relationship between buyers and sellers has become incredibly challenged.
Some companies work to promote a better purchasing arena by enforcing purchasing strategies that inhibit relationship-building. The intentions are good: to make purchasing decisions based on pricing rather than ‘relationships’ and eliminate any appearance of impropriety.
However, that mentality does not allow service providers a chance to learn the inner mechanics of a company and figure out how an innovation might provide a shortcut or a cheaper way to get something done. Nonconference room events are where a vendor gains information that is not normally communicated in a request for proposal. By withholding the opportunity to build a relationship, buyers often prevent conscientious suppliers from gaining the knowledge it takes to offer bona fide solutions.
Do situations arise where customers don’t really want a deeper relationship?
Both parties must be cognizant of the fact that relationships are built on trust, and that is a rare commodity in the business world. You just cannot expect someone to give you a commodity like that overnight. It takes time to earn it, and only the person who doles out that trust can decide when it gets doled out.
If a buyer employs a purchasing strategy that causes him or her to avoid deeper relationships, I would call upon the buyer to examine that policy and decide whether or not it is getting the best results.
How does re-establishing ‘the lost art’ relate to the ‘lifetime value’ of customers?
Gone are the days when a person makes a career decision to join a company in his or her 20s and retires from that same company at the age of 62.
Now that we experience so many job changes in a career, getting to know a vendor on a personal level will not only facilitate the supplier providing good service, but it will also provide potential when you move on to another company. You already have someone who understands your wants and needs and who can hit the ground running with you at your new company, providing the best results possible from day one.
FRED LIESVELD is executive vice president and managing director of Grubb & Ellis Company’s Detroit office. Reach him at (248) 357-6590 or firstname.lastname@example.org.