Improve Your Network: Profitability
Like A Fine Wine
When you mature your perspectives change, your physical appearances change, your taste in music changes, your style changes; in relationship marketing when your relationship matures it becomes profitable.
Worth Your Time
Profitability can be defined in multiple ways whether monetarily, mutually rewarding in referrals, or a place where both parties benefit from each other in some way. If a relationship does not profit you can guarantee that the relationship will not endure the test of time.
Proof In Numbers
What relationships do you have that are not profitable? How do you know? Are you measuring, using some form of metrics to help you make these decisions? Many people will immediately default to the de facto standard of profitability – money. That is not the only metric to use, I suggest keeping track of referrals received and given. Of those referrals what was the outcome of them. How hard did you have to work to convert those referrals to customers? Sometimes these are better metrics to help you decide whether a relationship is worth continuing to pour energy into. A relationship that is yielding poor profitability may not be due to the referrer but to you not effectively communicating to the referrer what your business capabilities are. This more often seems to be the problem rather than simply a relationship does not make enough money from the referrer.
Avoid being shortsighted during this evaluation period, it can seriously damage or hinder the development of the relationship. Consider all of the ancillary services or benefits a relationship offers you. I had a relationship that I once considered useless and was considering limiting my time spent on the development of that relationship. But one day I was speaking with a client of mine and found out that this other relationship I was considering limiting was actually one of the main sources of my income. At that point, I had to revise my standards for a profitable relationship. Profitability must be cultivated; it takes incredible amounts of patience and determination.
Many want to rush the process of profitability; I often get asked how quickly does it take for a relationship to reach the profitability stage. My answer is not a timeline but more of a gray area that is only understood when it feels right. It’s not entirely easy to determine when you’ve reached the profitability stage. Often times it depends on the frequency and quality of the contacts, and the desire of both parties to push the relationship forward. When the relationship feels comfortable, then and only then, can it transform into being a profitable one. If rushed, one party will feel awkward or weary of giving referrals to the other party; this can result in damaging the relationship.
The Bottom Line
Overall, this stage is vital to the success of relationship marketing but it is not the only piece of the puzzle to fit together. If anything, you should know and remember that all relationships must be cultivated in order to gain anything of value.
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