Success through Relationships


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published January 1, 2006

Malcolm Gladwell poignantly demonstrates the value of personal relationships throughout The Tipping Point. In one of his stories, he tells of the approach Roger Horchow took to attain the rights to revive the Gershwin musical of Girl Crazy as Crazy for You. According to the story, Horchow is asked by Lee Gershwin why he should receive the rights. In response, Horchow colorfully describes a long list of personal relationships he developed along his path to solicit the rights. With each relationship, he provides a note on that person’s personality, lifestyle, or interests. By the time he gets to asking for the rights, Ms. Gershwin responds with “Oh, you know her. Why haven’t we met already?” and grants the rights immediately.

The story doesn’t start with an explanation of Horchow’s creative vision for the musical, nor did it describe his marketing or financial approach. Neither his team, methodology, nor past experience were of listed as being important for gaining the rights. For this business deal, the key issue lied in relationships.

While most business deals will require more substance than a litany of who you know and how your lives intersect, relationships will always play an important role in business deals of significant value.

Relationships Are the Interconnect

Relationships are the conduit for sales. They do not lie in any one person, much less between one company and another, but at the interstices between the people working at the involved companies. With new customers, these relationships enable us to connect with our market, communicate our value proposition, and learn of our customer’s needs. With existing customers, these relationships enable us to uncover new customer needs, constructively address challenges as they arrive, and expand our business’s footprint within their purchasing habits.

The issue is that doing business is not simply a matter of explaining the features and benefits, value proposition, corporate experience, team strength, financial strength, nor commitment to delivery. Rather, many times these are merely the factors that enable you to compete within the market. In these cases, what tips the business deal in the favor of one offering over others will often be the relationship.

Personal relationships increase the importance of your contacts with customers, making it more likely that they respond to your inquiries. Personal relationships make business transactions a sought-after pleasure rather than a necessary expenditure. And, personal relationships enable salespeople to color the thinking of prospects towards perceiving the offering in a more favorable light.

Unexpected Events Can Become Your Most Valued Relationships

Every business person has a story about how they achieved a key goal because of a personal relationship. Many times, an important relationship will develop in an unexpected situation. For instance, consider the following true anecdotes I have heard:

  • A random sporting event conversation with a stranger developed into a service contract where prior marketing efforts had failed.
  • A random airport conversation with a stranger developed into a business deal in the desired market where a targeted direct mail and cold-call campaign failed.
  • A random bar conversation with a stranger developed into a new job in the desired career field where a targeted job search failed.
  • One of many postings on a blog develops into a conversation of mutual interest and the development of a new line of business.
  • One of many networking meetings created direct contact with a prospect that had been overlooked in prior marketing efforts.
  • A two year old casual acquaintance with whom there had been very little interaction develops a need for the offering and inquires about availability.

You probably have your own story about how a random conversation, activity, or casual contact developed into a business opportunity. These events, as random as they may appear, are a natural part of developing business. As such, nurturing the occurrence of these events creates a wider field from which opportunities can be harvested, ensuring a more robust and resilient business and career.

Relationship Development Is a Skill Anyone Can Implement

Unless you are an extreme case, both introverts and extroverts can be skilled at developing relationships. Being gregarious does not imply a skill at relationship development nor does being quiet imply a lack of relationship development skills. Rather, the key is listening to the concerns of prospects and demonstrating that you have genuine interest in bettering their situation.

Relationship development begins with the first impression created in initial interactions. It continues in uncovering the concerns of prospects, both with respect to their business needs and their personal needs. It is strengthened by sharing information on issues that concern them. It expands by asking people who else may be interested in the subject under discussion. And it blossoms in implementing the means to help individuals achieve their goals.

Actively developing relationships at every step of they way builds success.

Build Relationships Today

Relationships are an important factor in any business deal of significant value. They create opportunities, support the communication of points of differentiation, sway purchasing decisions, and enable business challenges to be addressed in timely and professional manner. Even random events can create relationships that develop into valuable opportunities. And, anyone can develop the skills to relationship building. So, with whom will you be building a relationship today?

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.