Revenue is often used as an indicator of success. A tangible result that’s easy to measure, set goals and create rewards for, producing revenue often takes precedence over other activities that contribute to building a strong company. Few organizations, especially when they have limited resources, put the same effort into developing relationships that are not directly tied to revenue opportunities as they do into generating revenue.
Many business leaders think they can do both simultaneously. But all the personalization and nurturing in the world doesn’t change the fact that a relationship with the end goal of a sale is transactional in nature. Developing genuine relationships are not based on transactions and may not directly produce revenue, but in the long-term, will be worth so much more than won sales opportunities.
The approach to developing genuine relationships should look very different than that of managing a sales transaction. Once you recognize that these are not one in the same, you can develop a strategy around developing genuine relationships and building a strong network that will help grow your business.
Why should you value relationships over revenue?
1. Relationships unlock your true potential. A successful revenue-focused strategy can grow your business, but a relationship-focused strategy can revolutionize your business and lead to opportunities you didn’t know existed. Relationships can do more to help you succeed than any amount of money. This isn’t to say you shouldn’t do revenue-generating activities or ask qualified prospects for their business, but as much time and resources should be dedicated to building relationship currency with colleagues, partners, competitors, customers and influencers.
Relationship currency is what motivates people to act on your behalf. This can help you develop other important relationships, generate referrals, create more opportunities, build brand awareness, and recover from mistakes.
2. Relationships are powerful information sources. It’s the information age and the more of it you have, the more powerful you are. When you build relationships based on trust, people will begin to offer you invaluable information that will help you communicate with your customers, improve your products, grow your business, and gain an edge over your competitors. Relationships with industry leaders also can result in free advice, counsel and knowledge that you would otherwise have to pay for or learn yourself at a much slower pace.
3. Relationships expand your sales force. Eighty-three percent of people rely on the opinions of people they know to make their purchase decisions. Fostering authentic relationships and being well-known for what you do makes your sales force so much bigger and more effective than an internal team tasked with driving revenue. Referrals are low cost, the sales process is faster, and they have higher closing ratios than other lead sources. Investing in relationships is one the cheapest and most effective marketing strategies.
4. Relationships give you options. The number one predictor of career success is the size and openness of your network. A strong network of people, with whom you have developed authentic relationships, gives you flexibility and options in your career and life. Porter Gale, author of Your Network Is Your Net Worth, says, “ Your ability to build a network of authentic personal and professional relationships, not your financial capital, is the most important asset in your portfolio. Working in collaboration with others who share your interests and values will provide a stronger foundation, enabling you to reach a higher level of success than you would on your own.”
5. Relationships increase your happiness. Career ambitions aside, connecting with others, who share your values or interests, can increase your feelings of happiness. In a Psychology Today article, Art Markman, a cognitive scientist at the University of Texas noted, “The interactions we have with other people affect the way we feel about life. Our close relationships keep us grounded and influence both happiness and the sense that we are part of a larger community. Interestingly, even our interactions with people we do not know that well give us a sense that we are part of that larger community. When we are first introduced to that community, those interactions and that feeling of belonging also increase our happiness.” UC San Diego professor James Fowler stated in an interview with NPR, “We find that people at the center of the social network tend to be happier… We think the reason why is because those in the center are more susceptible to the waves of happiness that spread throughout the network.”
Authentic relationships are a far greater currency than dollars. While developing relationships may not be as exciting as bringing in revenue, it’s a better long-term strategy for growing a prosperous business. What are you doing to foster authentic relationships, and how does it affect the way you do business?