What type of interaction or relationship does your customer expect from you?

How do you interact with your customers?

Imagine you are selling services. Now, imagine your surprise when the person who wants to buy that service is your brother. How would that be different from selling your service to a stranger? Would you negotiate as hard? (Trust me, if it was my brother, my answer is yes.)

People act differently in various types of relationships and transactions. This distinction between these two types of situations is something that psychologists have studied extensively. The way people interact with each other in transactions can apply to how people interact with companies.

To keep this article short, we will characterise these relationships into two types: relational and transactional. Relational types are long-term and built on an emotional connection and brand loyalty, with a focus on value rather than price. Transactional relationships are one-offs and focused on rational comparators, with an emphasis on price and value.

There are advantages and disadvantages to each of these relationships from a company’s perspective. Consider the example of selling services to your brother. When you’re selling it to your brother, you recognise that this is one point in a much longer relationship. It feels as if there’s a higher level of responsibility.  With family, you feel responsible if anything goes wrong. In other words, you treat family and close friends differently and you feel more responsibility in that transaction.

We engage with most companies at a transactional level. In the purchase, you want to maximise your value and they are looking to maximise their profit. Then, everybody walks away happy and there’s nothing wrong with that.

There are advantages to these transactional relationships. For example, your company might go under if you treat too many people like family and too few like customers. However, there are also advantages to relational transactions.

Which Relationship Type is for You?

One way of deciding what relationship style is most appropriate for you in your company is the long-term nature of the interaction. If you want your customer to keep coming back again and again, then a more relational perspective can help.

This type of relationship is the basis for most B2B companies where salespeople form long-term relationships with customers. Every quarter, their customers have to buy their new supplies for the next three months. That relational transaction perspective can help when it becomes time for the salespeople to hit quarter-end numbers.

The duration of the interaction is not the only way to decide on an appropriate relationship style. Consider the fact that there are relationships that you and I engage with – and have for a long time- that are still very transactional. For example, internet service providers (ISP). I have a long and difficult relationship with my ISP (I spent 25 years of my career in telecommunications, so have a unique knowledge). After all this time, I still consider myself to be in a transactional relationship with them. If I could get an advantage in any dimension using any other provider, I would do it in a heartbeat. In other words, I have no loyalty to the ISP, and they have none to me.

On the contrary, I have a relational arrangement with other firms that I buy from far less frequently. For example, my favourite whiskey is a 12-year old Balvenie. I don’t buy one every month as I do with internet service. However, when I need a good whiskey, I do not shop around. I buy a 12-year old Balvenie.

The Human Touch

So, with the understanding that both types of relationships have their advantages, what should you do? Treat it like a human relationship. Start by answering the following two questions:

  • What is it about other human beings that draws people towards them, that makes them want to form relationships with them?
  • What are the business equivalents of that?

We talked about the danger of doing business with family because it leaves you with fewer options than working with strangers. In some ways, that is what you are choosing here. If you want a relationship with customers, there are things that you can’t do anymore. You are pursuing relational instead of transactional, so choose wisely.

From a business perspective, creating a relational interaction means investment. It means spending time and money. However, what you are gambling on is building this relationship in the long term. For example, when I worked in telecommunications, I was in the business arena and we used to negotiate long-term contracts with clients (usually around three years). The competition used to know that the deal was coming up for renewal and would go after our clients. Now, we were never going to be the cheapest in the marketplace. Our offer and value propositions were based upon this relational type of interaction. We always went over and above with our service delivery. However, our competition could be cheaper by sticking to the terms of the contract.  As a result, customers would make their decision based on price, and we lost.

We changed our approach. We wrote down all the things we did for clients that we delivered over and above. So, we began listing examples of this type of service and assigning a financial value to it. The list had a profound effect going forward in winning business. We were, in a sense, turning a relational interaction into a transactional one.

We had lots of customers say, “We didn’t realise you did all this! If only you’d told us that in the first place, then we wouldn’t have gone with the competition.” It was a lesson for us and we started thinking about it from that perspective. Articulating all the relational benefits as transactional interactions converted many of those customers into more of a relational-type mindset with us.

Are you on the same wavelength?

In my company, we deal with companies of all different sizes. When you are dealing with multiple groups or people within a company, they may be speaking different decision languages. You have people who are into a relational type and others transactional. We learned to recognise that we were dealing with both parties.

Consider the following when you are interacting with your customers:

  • Do you know what your customers’ mindsets and perspectives are?
  • Are you speaking to them in the language that they understand?
  • Can you talk to them from the perspective of what’s essential?

Speaking to your customer in the language of their decision is vital. Your customers are expressing themselves in a particular way as they decide. If you are talking a completely different style, you’re going to rely on them to do the translation and they might not get it right.

There is no right type of relationship

Trust as a foundation for your moral compass is a nice and ethical thing to direct your interactions. However, from a business perspective, there are instances where it is essential to have trust as a foundational component and times where it isn’t important at all. As a business leader, you need to decide what are the advantages and disadvantages of each of these.

There are instances where it makes more business sense not to strive for that relationship. Or where, from a customer’s perspective, it doesn’t “feel right.” A young staff member of ours received a handwritten thank you note during a plane flight thanking him for being part of their loyalty program. However, instead of feeling appreciated, he felt like it was strange. He admits that it might be his problem, but regardless, he didn’t feel comfortable. It had the opposite of the intended relationship effect.

Pushing this relational perspective onto unwilling customers can be to your detriment. You need to find that line, where customers welcome forming that relationship with you, without it seeming pushy or overbearing.

Relationships are tricky, whether it is with your brother who wants to buy your service or with customers who view your relationship differently than you do. While there is no perfect type of relationship that works for all transactions, there are some fundamental principles that will carry you through. Most of all, you need to communicate in the language of your customer to reach an understanding. Otherwise you could end up being confused about why they took their business elsewhere.

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