Building and Sustaining Profitable Relationship
by Paul Catiang
Based on a presentation by Jovi Zalamea

Strategic Relationships Revisited

"Now that you have identified your strategic relationships, where do we go from here?" asked Jovi Zalamea of Goldman Sachs when he spoke at John Clements's monthly sales conference on September 24, 2005. This was a continuation of a talk Mr. Zalamea had given at the John Clements Annual Sales Conference in July, where strategic relationships were defined as a partnership that transcends the basic quid-pro-quo arrangements that common business transactions have.

When a company is a stakeholder and a participant in a client's business, when that company is a catalyst and a driver for transformation for that client, when that company has a huge influence over that client's business decisions, then the relationship they have is strategic. "The premise behind a strategic relationship is that you assume a role as an adviser or stakeholder in your clients' business. Transactions between you become incidental," Mr. Zalamea stated.

Investments in Partnering: Risky or Rewarding?

Building strategic relationships is difficult; taking the next step from having a transactional relationship towards symbiosis involves several steps. It begins with rethinking a company's working paradigm. "What are you providing?" Mr. Zalamea advised that companies ask themselves this question before beginning. By defining their role with respect to a client, a company can therefore see how they communicate; borrowing a telecommunications term, Mr. Zalamea said that the bandwidth of a company's relationship with a client should go beyond their core business and if they desire a more profitable association. A company has to view itself as a solutions provider and think of ways to better serve its client.

This, however, involves a considerable amount of time, effort, and freebies invested towards grabbing a client's interest. On the other hand, keeping the business transactional may be playing safe in comparison, but it renders a company vulnerable to competition. Suffice it to say, strategic relationships are carefully selected from among a company's clients as to which of them holds the most promise. Mr. Zalamea did give an apt reminder: "It is tough to start a relationship; it makes a lot of sense to maintain it."

Taking the Plunge

Strategic relationships can be established with several clients; it is profitable relationships that require an even greater investment. Once a client's interest has been piqued, the objective becomes sustaining this interest. Showing genuine concern for a client's well-being and being client centered and client focused goes a long way towards deepening the relationship between company and client.

As with the most rewarding investments, this step needs a great deal of time and effort spent in identifying opportunities for a client. Reading press reports and staying current in business provides a company a wealth of ideas as to what a client needs. "Look at the reports with an analytical eye; be broad-minded; piece together what is going on in the industry," Mr. Zalamea advised. He was quick to point out, however, the difference between identifying opportunities for a client and identifying them with a client. The former does not allow for a mutual contribution to the output, while the latter encourages more participation between client and company, and helps further cement their relationship.

The objective here is to make a company's services so valuable to a client that the company becomes the first choice when it comes to making crucial decisions. This also helps differentiate a company from its competition; providing a service so unique and custom-made for a client edges out competitors and ensures a continuity of business with the client.
Another method of providing a client with solutions and sustaining the partnership is conducting case studies of the client's business, examining their current practices and coming up with a strategic, long- or medium-term plan—or a business roadmap, as Mr. Zalamea suggested—that promises a rewarding and profitable future. This also ensures continued business with the client, as the company will help execute the steps along the roadmap.

Staying current on a client's competitors also gives further insight into that client's needs, as well as how to gain an advantage over their competitors.

Celebrating and proclaiming successes with a client highlights the infrastructure and the relationships built up over time with that client shows how difficult it is to replicate that infrastructure. This underscores the value of the profitable relationship established with the client and prevents the entry of competitors.

Lastly, education and round-table discussions provide a forum to deepen intimacy with clients. Talks about innovative business practices help bring the relationship up to date, and serves as a tool to exhibit a firm's thoroughness and thoughtfulness in business thinking while helping understand the client better. Clients are also reminded of a company's commitment to their business.

Cashing in on Investments

"Unfortunately," Mr. Zalamea said, "good advice is not always paid for. Getting paid for it involves some skill in the game." What a firm needs to do is to have its value—in pointing out opportunities, providing solutions, and giving excellent service—acknowledged by a client, and to translate these ideas and solutions into something profitable. "You have to put yourself in a position where you can negotiate a transaction," Mr. Zalamea advised. He neatly summed up the challenge at this stage: offering premium service for premium rates.

Certain practices were also recommended in the process of establishing a profitable relationship with a client. "The Memorandum of Agreement is important," Mr. Zalamea began the list. "It reminds everyone of the nature of the transaction. Deliver what you promise. Have a regular checklist of goals to accomplish—this establishes a quality standard in your client's mind, and gives you an opportunity to differentiate yourself from competition. Ask for feedback and a list of needed improvements—this tells the client you're serious about your services."

In conclusion, profitable and strategic relationships require massive investments in time, effort, and imagination, not to mention the number of freebies needed to grab a client's interest. In the very least, it maintains goodwill with clients, but if their potential is realized, the rewards are transformational and will profit all parties concerned.