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    « Which Opportunities to Pursue? | Main | The Reference Price Effect »

    May 19, 2006

    Are Relationships a Competitive Advantage?

    There are many reprographers who are convinced that they get business because of “their relationships”.  For a transactional business model this is becoming less important.  I don’t want to trivialize the value of relationships. They are important in all aspects of businss, but in a transactional business or a commodity business they are becoming less important.  In a consultative model a relationship is more important. In transactional business models price and convenience are ultimately more important than relationships.  Do you buy gas at a gas station because you have a good relationship with the attendant? Do you shop at WalMart because you have a great relationship with the Walton family? Have you ever heard a customer say “I really value our relationship, but we had to give this work to XYZ company because…, we will still give you some other work.” This is a nice way of saying I like you, but for whatever reason (price is better, other services are offered) we are moving away from your company.

    This dynamic is changing. If you do have good relationships with your customers you should use that as an opportunity to start building a business consultative model within your business before you get pidgen holed into a 100% transactional business.

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