Are you a relationship manager or just a huckster?
In business, relationship management is all the rage these days. There seem to be no salespersons any more, just relationship managers (RMs). It sounds warm and fuzzy and touchy-feely, as though you, the customer, have someone in the organization specially focused on you.
Most of the time, it’s an elaborate hoax.
What’s the difference between transacting and managing a relationship? To put it crudely, it’s the difference between a one-night stand and a marriage. The former is easy, momentary, fleeting and soon forgotten. The latter is difficult and hard-won but accrues benefits over a lifetime.
Most selling by most businesses has historically been transactional. Both sides to the transaction try to squeeze out the maximum benefit for themselves. You win if you outdo or outplay the other guy. Therefore you hoard information and try to pull a fast one. It’s a crafty card game, not much more.
Over the years, some sellers have cottoned on to the fact that good business could be more than just a series of shrewd transactions. A customer that stays willingly with you for a long period of time is worth far more than many transient customers making short-lived transactions. In other words, relationships matter and have an economic value. Hence the need for relationship managers.
That’s all very well, but it isn’t being done at all well so far. As a customer, despite having been assigned a large number of relationship managers in recent years, I can count on one hand those who have actually managed a productive relationship with me. Most just maintained the facade of intimacy, when I was really just another client in their (very) large portfolio.
This is rarely the fault of the individual; it emanates from the policies of the organization. Most selling departments have changed only superficially over the years; they have resprayed themselves and changed their job-titles, but the ethos remains the same: hit the numbers. If you reach your targets, you’re a winner; if you fall short, you’re the saddest of losers.
So, many relationship managers are often just glorified hucksters who have tough targets to meet and need to sweet-talk you into a deal that is worth more to them than it is to you. And that is the antithesis of what genuine relationship management is all about.
In a nutshell: relationship management focuses on the lifetime sale, not just this year’s target. It aims to deliver sustained value to both parties, not just one. It is focused on creating an incentive for long-lived loyalty, not short-term profiteering. When selling is done through a genuine relationship, each party wants the other to gain. It’s not a zero-sum game; it looks for win-win outcomes.
Some organizations and their managers get this; most don’t. To learn some lessons, let me suggest something rare: learn from the best management consultants. They immerse themselves in the depths of their client’s businesses, understanding their nuanced needs. They win when their client wins, and they have every incentive to think deeply about what creates genuine value for both sides. The relationship is a slow burn, and the benefits accrue gradually. And yet, the trusted lifetime advisor earns way more than the one-hit wonder.
If you are a customer assigned an RM, this is one gift horse you must look in the mouth. Lots of sweet talk and lunches are probably setting you up for a one-way bet. Genuine attention paid to your needs and deep insights generated into your life or business, on the other hand, are what differentiate authentic RMs from mere pretenders.
When done well, relationship management yields outstanding value for both sides. The seller gains loyalty, a stream of revenues and higher margins. The buyer gains relevance and genuine utility.
When done the way it’s mostly done, it’s just a silly facade.