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23 September 2011
The Power of Relationship Capital

The Power of Relationship Capital


By Ben Turner @ 09:12 :: 2828 Views :: 5 Comments :: Article Rating :: Featured Articles
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As I'm sure you know, we now live in an ever connected and competitive world, yet one which seems to give us little quality time to connect with clients in meaningful and productive ways. As we become more successful, quality time with clients seems to become a scarce commodity. So how can we begin to 'gain time', manage our client relationships more effectively and efficiently to ensure we maintain and increase business success and enjoy loyal and trusted client relationships?

Chris Davies has worked in the financial service sector both domestically and internationally for over 20 years both as Financial Advisor and a Sales Director, he is Managing Director of Engage Partnership and author of Winning Client Trust.

I have found (through more error than trail) that a key to the seemingly ever demanding world we live in, is to take time and sit back and watch and begin to decipher where you have gained key and successful relations in your business lives that have added value and quality to your business or personal objectives? Through gaining and working with high quality networks and relationships with key people or centers of influence we may begin to spend our time more wisely and gain the results we crave more efficiently and quickly.
 
The very act of taking some time out of your schedule to plan those meetings with key people, to decide which networking event or a coaching programme to join is crucial to gaining skills and knowledge in what we call relationship capital that measures the value of your relations within the world you live and participate.
 
CRM software can be the first to address, measure and improve client relationship capital. Through our four- client relationship archetypes: Ad-hoc, Social, Technical and Partnership relationships we can carefully plan coaching to ensure client relationships make it through to a true partnership status where loyalty and trust lies and thrives.
 
Until recently, no system as yet has actually been devised to truly measure relationship capital, the nearest we have at present is social capital where we can measure our influence and authority through various web based services such as KLOUT which help us see how our 'social pull' or standing amongst our peers or within our industry. Social media has a big part to play here and without a clear and coherent social media strategy, we could find ourselves well behind the curve before we know it. Just look at facebook, linked-in, twitter and ecadamy to name a few, their influence is growing strongly day by day.
 
Relationship capital in business terms maybe looked at as 'good will' and certainly solicitors and accountants use this term frequently. On an individual basis, the relationship capital can be with a professional and their client, the value will be higher where other individuals also have strong relations with the professional and the client, or people who influence the buyer. This is shown graphically below;
 
As David Lambert co-author of 'Smarter Selling' writes; "Of course, relationship capital is higher where relationships are with people who have power, influence, or both. Influence is often typically associated with power and we tend to be naturally attracted to power – which often attaches to job titles.  Where sometimes mistakes are made is where the influence of someone with a less impressive title is overlooked."
 
So what does this mean, particularly when we are searching for loyal client strategies? Well if any one has heard of the power of business joint ventures or partnerships will tell you, high quality relationship capital will leverage your return hugely in efforts placed with the right people with the right relationship capital. This will mean you will seemingly gain time and begin to spend your day in a better space where the right relationships are in place to give you the quality time to do the very things you want to with your clients.
 
In business terms this means seeking out those who can help your cause, relationships that offer a truly reciprocal nature, a win-win for both sides and will leverage yours and their influence in your market space. Where client relationships are concerned, knowing what your clients need, who they know and trust and how they interact within their field adds to the relationship capital. This has a tipping effect into personal lives too and with others providing a helping hand to your business efforts, a more rewarding work-life balanced can be achieved. A good example is financial services where a comprehensive understanding of behavioural economics needs to be attained for any firm and their people to gain client loyalty and trust.
 
Understanding client relationships (ad-hoc, social, technical or partnership) and clients financial capabilities to act upon advice and services offered can generate high relationship capital. Services maybe tailored to meet clients’ needs and make them feel appreciated. Without this then a transactional relationship exists, one that falters when it comes to added value and true understanding of the business worth.
 
Relationship capital maybe measured by customer relationship management software that allows access to state-of-the-art technology that will assess the current relationship between business and its clients and give suitable coaching prompts to aid facilitation of methods to generate a true partnership relationship built on mutual respect and trust.
 
So whatever your business is and wherever your interests lie, with the advent of social media and social capital comes the need to focus on, measure and nurture our relationship capital. Without our high quality relationships we'd be far worse off and just maybe complaining of having too much time on our hands with little or no reward.
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