Wednesday, July 29, 2009

CRM Business Relationship

A business relationship is different from any other kind of relationship, being a personal or a social relationship. However, to understand what a business relationship means, it is necessary to identify what a relationship is.
A relationship is according to the Oxford Advanced Learners Dictionary a connection between things. A different definition is that it is a memory of past interactions. Both definitions say something about a relationship even though that they do not say exactly the same. However, the definitions do not differ between business relationships and personal relationships, which is important because there is a different objective between the two kinds of relationships. Therefore, a business relationship can be defined as: A bond based on a rational objective, which is to do business with each other.However, as the interaction between the two actors increases, a certain relationship evolves and the knowledge about the other part is increased. Together they create a combined understanding and view of reality. The more common output of the relationship is a decrease in transaction costs, as transactions becomes routinely and the bond between the two companies is strengthening.
When talking about a business relationship, trust comes to mind, because relationships build on trust. However, can a relationship survive without trust? It is possible for a professional relationship to exist without trust, though in most cases trust is a part of the professional relationship. Various authors, such as Paul Greenberg in CRM at the speed of light, 2000, has argued that relationships build on memories of past interactions, because on the first encounter you do not know each other, however, on the second encounter you build the relationship on the previous encounter. He believes that it is the previous encounter that counts in the eyes of the customer. It is true that a need can create a genuine relationship, however, a long-term relationship needs trusts to be able to survive. Furthermore, the better one get to know the other, the better conditions the relationship has to succeed, if there is a honest approach to build the relationship. To some degree the two approaches towards creating a business relationship agree, however, if the objective is to create loyalty both the successful encounter and trust must be accomplished in order to create a successful long-term business relationship.

Rasmus Nielsen has specialised in CRM for several years and been consulting to various companies in Denmark and Australia on the topic. Rasmus also holds a M.Sc. International Business Economics
Other Articles from Rasmus Nielsen
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