The Importance of Healthy Business Relationships

Types of business relationships

The primary business relationship types we’ll look at are business-to-business (B2B) and business-to-consumer (B2C).

B2B

The highest-priority B2B relationships are typically those you’ll interact with often as part of supply chain management. Operations will depend on such relationships; for example, a cosmetics company couldn’t do business without upstream suppliers or downstream retailers.

Not every business has such vertical supply chains, however. Horizontal networks also provide partnership opportunities. Horizontal relationships describe connections between your business and others on the same level of the supply chain. A horizontal relationship could be a competitor or a business with similar clients — for example, a wedding photographer and a baker.

B2C

B2C is a type of commerce transaction in which businesses sell products or services to consumers. Consumer behavior is the primary driver in these relationships, and building trust with your customers is key.

“Building trust is a critical factor in fostering quality business relationships,” explained corporate law attorney Emily Strack, shareholder at Baker Donelson and vice chair of the firm’s emerging companies team. “People prefer to do business with those they can trust to act in furtherance of, or at least not opposed to, their best interests. Once that trust breaks down, it can be difficult to salvage a relationship.”

Other essential elements of a successful B2C experience include:

• Product satisfaction: To guarantee product satisfaction, you must ensure your product or service meets the standard your clients expect.
• Availability: You also want to make it easy for customers or clients to contact you. Being hard to contact can make people doubt your reliability and feel less secure about doing business with you.

Customer relationships are business relationships. When you prioritize customer needs over sales, you develop these relationships and nurture the sales you were hoping for in the first place.

How to build and maintain healthy business relationships

Consider the following strategies for nurturing business relationships:

• Cold call your contacts
• Offer free samples
• Use social media
• Keep in touch
• Build trust
• Settle disputes

Cold call your contacts

There’s no secret sauce to building quality business relationships. Plus, while the methods may be obvious, that doesn’t make them easy (ahem, cold calling).

“If I was starting a business tomorrow morning, my first port of call would be to contact everyone I know,” said Simon Paine, CEO and co-founder of the Rebel Business School. He recommends drawing up three lists — labeled “must call,” “should call” and “be nice to call” — and start dialing from there.

“Some people might consider making phone calls old-fashioned, but this is where your business takes leaps forward,” Paine explained. “Things happen when you speak to people. Emails and social media are all too easy to ignore.”

Offer free samples

Another way to build contacts from nothing is to offer free samples of your products or work, suggested Roger Wood, business development director of GSM Finance. “This can be either local people, industry-related people if you’re in the B2B space or influencers in your industry,” Wood explained.

Social media is an excellent tool for this strategy and for finding and communicating with potential customers. Wood recommended joining a Facebook group for your business niche to test a free-sample strategy. Chances are at least one group in your area already exists.

However, Wood cautioned that social media platforms shouldn’t be treated as tools for self-promotion. “The trick to making the best of these [industry groups] is to always help others more than you promote yourself,” Wood shared. “Those who promote themselves or who suck value out of the group without providing their share of input will get a bad name.”

Use social media

Wood’s advice about not blatantly promoting yourself on social media also applies when using social media for business purposes — e.g., customer service and relationship-building.

“There are common mistakes that businesses of all sizes make,” Paine noted. “They try and sell directly on social media and forget the social part, they don’t target an audience and niche down enough — they are too broad-brush — and thirdly, they don’t do it consistently.” Instead of treating social media as a passive marketing tool where ads are blasted every so often and communication is one-sided, view it as an opportunity to interact with your target base.

Customers already expect a significant level of engagement from businesses. For example, they often “at” businesses on X (formerly Twitter) to share appreciation or call them out on poor customer service.

Social media is a way to meet customers where they are instead of waiting for them to reach out through formal channels.

Keep in touch

The more business relationships you develop, the more challenging it becomes to properly tend to everyone in your Rolodex. That’s why you should make conscious efforts to keep in touch with all your business contacts. You don’t have to reach out to them every day, every week or even every month. Social media provides a much more natural way to stay in touch.

For example, when a business connection shares a post on LinkedIn, take a second out of your day to like the post. When they announce a new promotion or job, message them to congratulate them and ask about their new role.

Keeping in touch via social media is quick and easy. Plus, if you show interest and a willingness to help, it can lead to new business.

Build trust

The first time you work with a new business contact, you might not fully trust each other. That’s fine, as long as you’re not operating from a place of distrust. It’s essential to build trust over time to prove yourself as someone reliable and capable.

The stronger the trust between you and your connections, the more likely it is that they will bring you new opportunities. They’ll also be more inclined to stay in touch.

Settle disputes

Disputes are common during business deals because the interests of different parties sometimes conflict. When this happens, keep things professional and avoid lashing out with emotion. Strack advises calm, direct communication, preferably in person.

“Getting the parties together face-to-face in a room can often go a long way toward clearing the air,” Strack advised. “People often will behave badly over email, or even over the phone, but suddenly become much more reasonable when they are sitting across the table from the person. Be strategic about who is included in the meeting, however, as including someone with bad energy or a domineering personality can set the wrong tone.”

The benefits of building healthy business relationships

There are many upsides to building healthy business relationships, including gaining referrals and leveraging horizontal business networks. There’s also no limit to the rewards you can reap when nurturing a long-lasting relationship. Consider the following benefits of building healthy business relationships:

1. Healthy business relationships lead to client discovery and referrals.

“It’s absolutely essential for a startup with limited time and resources to build business relationships,” stressed Alistair Dodds, co-founder and marketing director of EIC Marketing. “They are the key to the discovery and referral business.”

Referrals can happen organically when you’ve invested time and energy into your business relationships.

“Individuals naturally will want to expand the business they do with people they enjoy working with and, in many cases, may even create other business opportunities for those they enjoy working with,” Strack explained. “There is no better source of business than referrals from satisfied customers.”

Healthy relationships with competitors can also bring referrals and new business. “I’d suggest it’s better to build [referral relationships] whereby your geography or key services don’t overlap,” said Dodds, who maintains relationships with other digital marketing agencies worldwide. “We provide leads, intros, and new business in the skill sets we know they specialize in and which we don’t … they are happy to return the favor.”

2. Healthy business relationships maximize horizontal business networks.

Horizontal networks provide many opportunities. When you build relationships with horizontal network businesses, you have additional chances for referrals, partnerships and support.

Wood refers to horizontal network businesses as “adjacent” businesses. Once you identify your customer base, look for businesses that share similar clientele. “These are businesses that are not direct competitors of yours but who have a similar customer profile,” Wood explained. “One slightly left-field example could be a florist and a funeral director.”

3. Healthy business relationships continue growing.

Unlike cash, strong business relationships are not a diminishing resource; a properly maintained network can only multiply. As long as you continue the relationship, you can potentially rely on the other person or entity for reasonable favors when necessary.

4. Healthy business relationships provide honest feedback.

Maintaining healthy relationships with customers can help you better understand their needs, learn what you’re doing right and understand where you’re falling short. Stay connected to your customers via social media platforms to become aware of their concerns and immediately address issues.

Online reviews are an excellent source of honest customer feedback. Be sure to respond to all online reviews — both positive and negative — to demonstrate your appreciation and willingness to rectify problems. Your customers and prospects will see that you care about their needs, increasing trust. Customer surveys are another way to gather valuable feedback.

5. Healthy business relationships help you stay current on industry trends.

Healthy horizontal relationships with other professionals in your industry can help you stay updated on your sector’s crucial trends and changes; this includes laws and regulations that govern your industry.

Business leaders should always strive to stay informed about key news items and innovations — relationships are an effective way to stay attuned to what’s happening. Horizontal relationships can help you pace your business’s efforts with evolving standards and initiatives.

When you should end a business relationship

Unfortunately, not every business relationship is worth maintaining. If it’s clear that a business relationship isn’t working, the individuals and companies involved should try to dissolve the affiliation without creating further damage. “They should address the issue head-on, explain what is not working and suggest a reasonable course for the parties to extract themselves from the relationship,” Strack advised.

For the sake of your company’s reputation, don’t rush out of a bad client relationship without devising a viable compromise. Proper issue resolution can be the difference between one unsatisfied customer and a PR nightmare.

Leverage business relationships to reach your goals

Healthy business relationships are an often-overlooked element of a business’s overall success strategy. Whether you’re fostering B2B or B2C relationships, building trust with the people who help keep your business running smoothly every day is crucial.

Supporting and maintaining business relationships doesn’t require extensive efforts, though consistency is critical. It only takes a few minutes to reach out via email, phone or social media to ensure valuable relationships stay strong. That’s time well invested toward building a network to support you in reaching your business goals.

Erin Donaghue and Max Freedman contributed to this article. Source interviews were conducted for a previous version of this article.