Last week, I had a conversation with a colleague about a gal who's publicly declared that “she won't do business with people that don't do business with her.” I was pretty shocked to hear that the woman said that because she's a pretty smart business person (or so I thought). After hearing that, I started to replay in my mind, lots of interactions I had with her and the things I saw on social media and I came to the conclusion that her business strategy may be getting in her way of success. Here's why.
Business is complicated and let's face it, you can only have so many direct relationships. You only have a need for one person to manage your money or one physician to be in charge of your primary care. Often, you have a long-standing relationship with people and it makes no sense to change. But that doesn't mean that you can't have a business relationship with someone because honestly, it's not all about the sale.
Business is about relationships and building trust. Whether I do direct business with you or not, if I know you, like you and trust you and interact with you frequently, chances are I will think of you when someone is looking for whatever you sell. My referrals will come your way and honestly, there is more money in a continuous flow of introductions, than there is with my direct piece of business. It's basic math.
I have lots of friends that I don't do business with because I don't really need what they sell. That doesn't mean that we're not good friends because relationships aren't based on business. They're based on enjoying someone's company, past experiences and having things in common. Will I refer people to them even though I may not do business with them? Absolutely, because I want them to succeed. Do I expect that they'll do business with me? Not at all. I have close friends that have used someone else to set up their blog. Others that have never come over to try on a pair of leggings and that's okay (especially since bold patterns aren't for everyone). I don't let it get in the way of a friendship.
But, when I hear of someone who “won't do business with people that don't do business with her,” I'm taken aback. It's an incredibly limited business strategy. One client is not worth the ten introductions a good referral partner could bring you for new business. Surrounding yourself with only clients (while it does make them feel special and happy) doesn't broaden your circle or your networking base. It limits the potential of your business.
I am a big fan of networking and know that it works. But sometimes, referrals don't always flow both ways and in some situations, that's okay. I'm looking to connect my contacts with the best person suited for them, whether I do business with them or not. I want to be seen as a connector and help people. It's a strategy that works in the long run because it builds a reputation.
So, for the woman who runs her business in a tit for tat manner, I wish her well with her business. I think broadening her thoughts may bring her more success (especially since sales follows the law of numbers) but she can run her business however she sees fit. I'll just patiently wait to see how this all pans out.