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February 19, 2021

4 Types of Relationships That Play a Key Role In The Success Of Your Business

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There are four main types of business relationships that you must cultivate and grow to build a successful business. And just like with the relationships you have with family, friends, and partners, life is better when these relations are strong and healthy. 

1. Employee relationships

Employees are the most valuable asset of a business. But, only when happy in their work. Happy employees are more motivated, productive, and committed. However, the opposite is true if they’re not. 

The goal of employee relations is to develop an atmosphere of trust, appreciation, respect, and transparency between employees, employers, and managers. This relationship touches on every aspect of an employee’s working life – contractual, practical, emotional, and physical.

The HR department typically manages this relationship. But, in small companies of only a few people, this role usually falls to the business owner.

Tips for maintaining good employee relationships: 

  • Get to know your employees on an individual basis
  • Make employees feel like stakeholders and key contributors
  • Provide continuous feedback both positive and constructive 
  • Be open to receiving constructive feedback 
  • Give recognition and reward employees for good performance
  • Invest in employees professional development

2. Customer relationships 

A great product or service is no longer enough to win the hearts, minds, and wallets of customers. Today customers expect more. They want a fantastic buying experience, and they want to feel appreciated and valued. This is why customer relationship management is now a big focus for businesses.

Customer relationship management is the ongoing efforts of a business to meet and exceed customer expectations, with the ultimate goal of turning them into lifelong, loyal customers. 

Loyal customers spend more, buy more – and buy more often. They also promote your business to their friends and family. However, to build a base of loyal customers, you first have to develop strong and meaningful relations with them.

The process of developing strong and meaningful relationships starts when a prospective customer first comes into contact with your business and continues through every subsequent touch point of the customer journey, and after they have made a purchase. 

Tips for developing great customer relationships: 

  • Put the customer at the heart of everything you do as a business
  • Ensure your staff live and breathe customer satisfaction
  • Identify friction points in the customer journey and eliminate them
  • Optimise the customer experience at every touchpoint
  • Continuously temperature check customer satisfaction
  • Provide non-transactional value such as educational newsletters
  • Reward customer loyalty with exclusive discounts and offers

3. Investor & bank relationships

Most businesses require financial backing from investors or banks (maybe both). And maintaining a healthy relationship with your financiers is key to growing and developing your business.

Having a healthy relationship with your investors and bank ensures you have financial support in the good and bad times. Beyond the financial, your investors and bankers can also provide guidance and expertise to help navigate and guide your business so that it reaches its full potential. 

Some businesses make the mistake of seeing their financiers as nothing more than ATMs and come to them with a cap in hand only when they need money. This is the worst thing you can do! Investors and bankers don’t want to feel like cash machines. Your relationship with them should be ongoing. You should make them feel like part of your team. After all, they have a stake in your success. 

Tips for building good investor and bank relationships:

  • Set calls or meetings with your financiers at least once per quarter 
  • Send personalized birthday and holiday greetings
  • If you have business issues, let your lenders know straight away
  • Make sure your financial reports are accurate 
  • Regularly invite your banker or investors to visit your business 
  • Treat your investors as business partners
  • Ask for their feedback and advice 

4. Supplier relationships

Whether your business is product or service-based, it’s dependent on suppliers and vendors to operate and run smoothly. However, some business owners think because they make the orders and pay the cheques that they’re the top dog when it comes to the supplier relationship. This is the wrong way to approach and view supplier relations. 

Your suppliers are strategic partners in your business, and you should treat them as such. If you foster good relationships with suppliers, your business will reap benefits such as reduced costs, extended credit lines, prioritized service, faster turn-around times, product line development insights, and much more. 

The key is to find great suppliers that you can trust and who will help your business grow. Once you find them, your aim should be to build a long-term relationship that benefits both your business and the suppliers. 

Tips for fostering long-term supplier relationships:

  • Pay your suppliers on time
  • Set clear service level expectations from the outset
  • Treat your suppliers as business partners
  • Be reasonable and fair in your business dealings 
  • Remember your supplier works with you, not for you 
  • Understand and meet contractual obligations 
  • Deal with issues early and professionally 

Over to you

How you approach the different types of business relationships you have with employees, customers, suppliers, and lenders will play a key role in determining not just if your business runs smoothly but also if your business reaches its full potential. 

But, like with the other relationships in your life, these relations will only be healthy and strong if you work to nurture and cultivate them. 

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