Relationship Business

Are you in a relationship business?

I had lunch the other week with a commercial banker friend. He mentioned how important relationships are to his business. A few days later I had coffee with an insurance brokerage friend. He mentioned how important relationships are to his business.

When each guy said it, the thought in my head was that neither was in a relationship business. When I think of a relationship business, I consider my own experience starting a software contracting firm. Neither I nor my business held any licensure or certification. My customers, by definition, are looking to have something custom built that we had never built before. They had to trust me to deliver for them. That’s the dynamic when I think about a business that relies on a relationship.

By contrast, banks and insurance are so heavily regulated they can only legally offer effectively the same product as all the competitors. There’s very little they can do to differentiate themselves. I like these guys, but I don’t think I do business with them because of that relationship.

But as I replayed the conversations in my head, I think I’m wrong. In a business where you sell a commodity, maybe a bit of relationship icing is the only differentiator you can have. If you sell a commodity, buy me a burger or a coffee now and then.

So we’re all in relationship businesses. Except for those two jerks that answered my twitter poll.

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