Christopher P. Blocker, PhD, Lance A. Bettencourt, PhD, Mark B. Houston, PhD, and Daniel J. Flint, PhD
"Success depends on building relationships with your customers!" This mantra has been unquestioned for decades. But, do your customers really want a relationship with you and your company? The answer is both yes and no. Yes, they do...but not necessarily in the traditional sense you may have been led to believe. According to research that we (Mark Houston, Dan Flint, and Chris Blocker) recently published (Journal of Consumer Research, February 2012), along with studies in progress with Lance Bettencourt, the conventional perception of the customer relationship is being challenged.
Some of the most common selling advice, training, and research suggest that salespeople can get ahead by building relationships that are characterized by strong interpersonal friendships with buyers. Most of this advice, however, is based on theories developed to explain "expressive relationships," meaning relationships with friends, families, and romantic partners. Can these theories from the personal world be appropriately applied to help firms build successful buyer-seller relationships?
In our research, we explored the very idea of a "relationship" between a buyer and seller using in-depth interviews with 38 experienced business buyers over a period of several years (over 1200 pages of transcripts). Because most research has focused on why suppliers should try to build relationships with their customers, we wanted to get the buyer's viewpoint. We hoped to glean insights into the meaning of relationships and the perceived benefits to buyers. Our business-to-business research revealed that applying the "relationship metaphor" can be problematic in the world of sales, and our findings provide new insights for real estate professionals looking to manage ongoing sales interactions with important commercial buyers.
Relationships Versus Value Creation
Our research certainly reveals that buyers use the terminology of personal relationships (e.g., close friend) and they frequently employ relationship analogies (e.g., dating). However, when you study buyers' communications closely, it becomes clear that commercial buyers measure the quality of their supplier relationships almost entirely based on their business performance implications; most viewed the interpersonal elements of a relationship through a lens of instrumentality. The buyers clearly preferred to deal with suppliers with whom interactions were "friendly" and "pleasant," and being able to trust a supplier's integrity and reliability is crucial. But at the end of the day, such considerations were overshadowed by the value created by the supplier's products and services relative to the buyer's business needs. In other words, even the interpersonal elements of a relationship were evaluated against the question "Does it help me get things done?"
Here are a few examples from our research of how buyers viewed relationships with suppliers. Some, like Drew, a buyer in transportation services, confessed to "using" relationships strategically. For key suppliers, he would engage in extensive social interactions, "acting friend-like." And although he described it as "like a marriage," he went on to clarify that only as the suppliers proved their worth by increasing his profits would he continue with the efforts. Stated starkly, "relationships" are sometimes used as a tool for influencing suppliers (a "social lubricant"). Others, such as Ted, a 40-ish buyer in construction supplies, explicitly kept "arms-length distance" from suppliers so that he could always do "what was best for his company" without the "complications" of friendly interactions. Still others, like Dave, who worked in consumer packaged goods, and Rachel, a buyer for a non-profit, explicitly stated that they did not want friendships with suppliers. They did consider a few salespeople to truly be friends, but only outside of work. Dave's descriptions brought to mind the classic Warner Bros. cartoon characters, Ralph the Wolf and Sam the Sheepdog, who were adversaries by day, but after "clocking out" of their respective jobs (hunting sheep and protecting sheep, respectively), they were friends.
An unavoidable fact in professional relationships, including the commercial real estate context, is that the buyer is an agent of his or her firm, with compensation and employment security connected to the financial outcomes of their buying activities. The buyers in our sample were attuned to the tension this creates. Although relationships can create an environment of trust, many aspects of a genuine, expressive relationship put the buyer in a tough situation when their firm's best interests do not coincide with a "friend's" best interests.
Some worried that engaging socially with a supplier (e.g., "taking tickets to a Dodgers game") would compromise their judgment or damage their credibility within their own firm. Several buyers who explicitly acted relationally in order to get more favorable terms from a supplier expressed personal feelings of "guilt," apologizing that "I sound like a manipulator." Many of the arms-length buyers had stories of relying on "friendship" in some past business decision, only to have been burned by the supplier - a "mistake" that they did not intend to ever repeat.
Implications for Managing Ongoing Interactions with Commercial Customers
It seems that a true, expressive relationship is not really what most customers want. So what do our findings imply for the commercial real estate industry? Here are some things to consider. Long-term, buyers stay with firms that deliver better value than is available from alternative firms. Personal relationships do not alter this fact except in the short-term. At the same time, relationships are of incredible importance for their instrumental value - they open up channels of communication that can enable business partners to accomplish great things together.
So, it is important to recognize that the power of a personal "relationship" does not come from social benefits; rather, it comes from the buyer recognizing the value that the real estate firm can provide them over time. Thus, relationship building is not an end unto itself; instead, a relationship offers connections to your customers that allows you to gain insights into ways to create better value for them. It also can create an environment in which the customer gives a bit of "grace" when inevitable conflicts arise. While it is good to have salespeople who are friendly, it is better to have salespeople who have the interpersonal skills needed to help buyers get their jobs done better (e.g., listening, asking good questions, clear communications, and so on).
Further, to avoid over-reliance on relationship thinking, there may be some benefit to training your sales force to view and to talk about interactions with buyers using terminology other than with relationship verbiage. A change in terminology can be powerful, because invoking the metaphor of a relationship conjures up notions that over-emphasize emotional bonds and draw attention away from the instrumental motives that drive long-term partnerships. So, perhaps a better metaphor for viewing and managing commercial real estate interactions is that of connections.
Connections - a metaphor from electrical circuits or computer science - link things together so that resources can flow for an instrumental purpose. And in practice, useable and reliable connections are selected to fulfill resource needs. In the same way, connections between commercial real estate buyers and firms enable work to get done. These individuals do not have to be "in" a relationship; rather, they can connect when a connection would be useful to achieve a goal achievement (and disconnect otherwise). The only connections that get used repeatedly are those connections that reliably create value. The connections metaphor focuses a salesperson's attention back on task achievement or creating value for the buyer.
Finally, our research also has implications for measuring the quality of customer relationships. Buyers use relationship language, but not with the same connotation as when such language is used in everyday conversation. Thus, rather than asking general questions about a buyers' satisfaction with their "relationship" with your firm or a particular salesperson, be more precise in your language. Measures of desired behaviors and instrumental results tied to the relationship, such as whether your firm does a good job of taking the time to understand business objectives and offering creative ideas to grow the customer's business, are more likely to be uniformly understood by buyers.
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Blocker, Christopher P., Mark B. Houston, and Daniel J. Flint (2012), "Unpacking What a "Relationship" Means to Commercial Buyers: How the Relationship Metaphor Creates Tension and Obscures Experience," Journal of Consumer Research, 38 (5), 886-908.
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About the Authors
Christopher P. Blocker, PhD
Assistant Professor of Marketing,
Hankamer School of Business, Baylor University
Christopher P. Blocker (PhD University of Tennessee, MBA Texas Christian University) is Assistant Professor of Marketing in the Hankamer School of Business at Baylor University. Chris' research focuses on understanding what people value and desire in life and within marketplace relationships. He explores these topics across a variety of contexts with an increasing focus on social enterprises, global and domestic poverty, transformative consumer research, and subsistence marketplaces. Prior to pursuing a PhD in marketing, Chris held various marketing/sales positions in the high-tech sector, including professional services consulting and global account management for AT&T and business marketing at Sprint. He has published research in journals such as the Journal of Consumer Research, Journal of the Academy of Marketing Science, Industrial Marketing Management, Journal of Business Research, among others.
Lance A. Bettencourt, PhD
Partner, Service 360 Partners
Distinguished Marketing Fellow, Neeley School of Business, Texas Christian University
Lance Bettencourt (PhD Arizona State University) is co-founder of Service 360 Partners. He brings a deep passion to helping companies improve their customers' service experience by applying a combination of real-world insights and relevant theory. His academic research on innovation, sales, and services has partnered with companies such as Wells Fargo, Banc One, and Bridgestone/Firestone to understand the role of personality, attitudes, work climate, job characteristics, and leadership behaviors in motivating employee service behaviors. His research appears in Journal of Applied Psychology, Journal of Retailing, and Journal of Personal Selling & Sales Management, among others. As a consultant, Lance has advised dozens of Fortune 1000 companies, such as State Farm, Johnson & Johnson, and TD Bank Financial Group, and has led executive education sessions with organizations as varied as McDonalds, Dunn & Bradstreet, and the Central Intelligence Agency. His practitioner-focused publications have appeared in Harvard Business Review, MIT Sloan Management Review, California Management Review, and Business Horizons. Lance is also author of the book Service Innovation: How to Go from Customer Needs to Breakthrough Services (McGraw-Hill 2010).
Daniel J. Flint, PhD
Professor of Marketing,
College of Business Administration, University of Tennessee
Daniel J. Flint is Regal Entertainment Group Professor of Business and Director of the Shopper Marketing Forum in the Department of Marketing and Supply Chain Management at The University of Tennessee, Knoxville. His Ph.D. is in marketing and logistics from the University of Tennessee and BS in engineering is from the U.S. Naval Academy. Dan has published in both marketing and logistics premier journals such as Journal of the Academy of Marketing Science, the Journal of Marketing, Journal of Business Logistics, Industrial Marketing Management, Journal of Business and Industrial Marketing, Marketing Theory, Services Marketing Quarterly, and International Journal of Physical Distribution and Logistics Management, has published numerous book chapters, serves on four editorial review boards, has served on over two dozen dissertation committees and regularly presents at global conferences. Dan's research and corporate work focuses on helping firms understand the dynamic nature of what customers and shoppers value, market sensing, marketing strategy and inter-organizational relationships.
Mark B. Houston, PhD
Eunice and James L. West Chair of American Enterprise and Professor of Marketing,
Neeley School of Business, Texas Christian University
Mark B. Houston (PhD Arizona State, MBA University of Missouri, BS Southwest Baptist University) is the Eunice and James L. West Chair of American Enterprise and Professor of Marketing at Texas Christian University. His award-winning research on channels, movies, and innovation strategy has been published in Marketing Science, Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, and Journal of Financial and Quantitative Analysis, among others. He is President of the AMA Academic Council (2012-2013), and has co-chaired the AMA Summer Educators' Conference (2005) and the AMA/Sheth Foundation Doctoral Consortium (2010). His teaching has received awards at the national (Academy of Marketing Science), university (University of Missouri), and college levels (TCU's Neeley School of Business; Saint Louis University's Cook School of Business). He has conducted research, consulting, and/or exec education activities with many firms, including AT&T, Caterpillar, Dell, IBM, INGAA, Marriott.com, and WellPoint.