What is relationship capital?

Relationship capital is ground zero; it is both the nucleus and center of the universe as it relates to the life of a business career. Relationship capital will have the single biggest  impact to a business person’s success, or lack of.

Relationship capital is just that, it is capital. No less than money is part of a banks net worth, relationships are the capital, or currency of those in the B2B space. Relationship capital is like currency. It can be traded, exchanged, saved, accumulated, or invested. Relationship capital is like a savings account, registered retirement account, or an annuity. Stocks, bonds and other types of entities of worth in the securities space, are no different than relationship capital because all of these are instruments intended to improve one’s worth, value, or investment.

If this all sounds a little evangelical, it’s meant to, because I approach relationship capital as a religion. To me, it is almost holy and sacred. It is the breath, sole and life of a business career, and for those who fail to recognize this, winning and success will be fleeting.

That is the specific focus of this “tome”, relationship capital and the people that sell in the business to business market.  As far as I’m concerned, B2B sales people have the most to gain, and the most to lose should they not heed this “scripture”.

Relationship capital and its place in the sales cycle is often misunderstood. Markets and the economy being what they are today, companies tend to be obsessed with results. How will this month close? Will we make our budget for the quarter? I too am results obsessed, it’s just that my perspective differs on where energies and resources are best invested to achieve results versus the strategy employed by the “transaction junkies”, or the “just get me more deals” managers.

What most people don’t get is that to grow a business, and yes a sales territory is a business, one must invest in it like any other business. We’re not talking about day trading stocks – the transaction junkie – nor are we advocating you all become Warren Buffett’s, solely focused on long term returns, but rather a balanced and strategic approach that serves your short, medium, and long term aspirations and goals.

Having a relationship will never interfere or get in the way of doing a quick deal. The problem is that most transaction junkies don’t recognize the value they throw out the door each time they cut bait and run from a potential relationship that didn’t yield a quick win.    

If you’ve been around as long as I have, and you’ve carefully invested in relationship capital, then you will have myriad examples and stories to tell about a relationship you were able to leverage or capitalize on. From the person you knew years ago, that became a decision maker at an entirely new company, to the person you met that had no apparent relevance  to your immediate objective but was able to provide an introduction, the opportunities that are the result of relationships are tangible, predictable and on-going.

Relationships are a sustainable commodity. They can be added, nurtured and cultivated like any other investment. As a B2B sales professional, relationships are your only true “savings”, the one thing you can take home with you every night and take to the next job. Unlike the transaction junkie, those that cultivate relationships will see a dividend over the medium and long term. At the same time, it will be impossible for them not to discover more short term opportunities, because their strategy, their focus, will be on attending meetings and meeting people, versus “what’s in it for me today.”       

Think about it? A dividend actually pays you money as you sleep. That’s what good relationships do. They have your back. They are motivated to help, and help you to do well. The transaction junkie? All they have is the transaction, but little else. It ends there.

There’s an old joke about an old bull and a young bull staring out over a herd of cows and what they would like to do. If you know this joke, then you know why this isn’t the appropriate forum to tell it, but you will also know that the old bull brings wisdom and strategy to the challenge. The young bull? He’s the transaction junkie, and gets less in the end.