Sunday, October 9, 2011

Rushing into a business relationship is like marrying someone you don’t know

Rushing into a business relationship is like marrying someone you don’t know – If you don’t plan to stay together long – it doesn’t matter... if you are looking for a partner with similar tastes and views – look around to find the right one.

The dangers of low engagement transactions. Business transactions rely on trust to a large degree; “trust has several connotations.[1] The typical definition of trust[2] follows the general intuition about trust and contains such elements as:

  • the willingness of one party (trustor) to be vulnerable to the actions of another party (trustee);
  • reasonable expectation (confidence) of the trustor that the trustee will behave in a way beneficial to the trustor;
  • risk of harm to the trustor if the trustee will not behave accordingly; and
  • the absence of trustor's enforcement or control over actions performed by the trustee.”


One of the most significant trends in International trade over the last 20 years has been the speed of transactions. As an old-timer – I remember placing orders with suppliers by Air Mail letter and Telex machine. The time taken just to get an order in place and make payment was often 3-4 weeks. Now with the advent of global sourcing sites such as Alibaba etc, people are looking to complete all aspects of a transaction in minutes. This has advantages but also some serious drawbacks especially when dealing with China as this represents a major cultural shift.

Some of my fondest memories of China are extended business meetings that flowed on to extended meals and sometimes even Karaoke – when I was on trips to meet with new clients. The idea of meeting with, understanding the philosophy of , and building a solid basis for communication was paramount. This made resolving disputes so much easier after meeting someone as you had some idea how they were going to react. In short you felt you knew whether you could trust them.

It was not always possible to meet every one that you are going to do business with but it is still possible to build a relationship. For new exporters/importers, I suggest working on a “relationship development model”.

For example, an Importer may look at a system like this;

Step 1, send an general email to the company asking about their range of products and whether they already have any local distributors.

Step 2, Ask about the cost of samples for two or three of their products.

Step 3 Once you have the samples ask about packaging, shipment port and warranties.

Once you have this information, then ask about pricing etc.

The idea of this process is that if at any time you feel that you do not get the level of service you expect: consider ending the relationship. The other advantage of slowing down the process is that is gives you chance to look at the value proposition (quality, service, suitability etc) rather than just price.

Governments world wide are reducing red tape and regulations to small business – this is a good thing but it also means that the barriers to entry of new business have never been lower. This coupled with “Gen y” people now going into business means that the values of these newcomers may be different to yours. Some product sourcing and auction sites encourage new starters but some of their clients do not consider customer service to be important and are more interested in turning a quick buck. For many of them it is only a part time income – so if it does not work out after a year or so – they will just shut it down.

Rather than you go from this article feeling that the writer is a grumpy old man, I would like you to consider that the temptation to stray away from your core product focus can lead you into a world of low involvement transactions that just may not be fun!

On a positive note, the many facets of web 2.0 and social media provide the new opportunities for high levels of engagement. Explore, engage, - ENJOY!

Further reading at;

Depth Perception,

Engagement Understanding It, Measuring It, Achieving It

Passive and active social media high and low engagement

Written by Graham Bell of Bell Management Consultants

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