Too many businesses are too transactional in the way they behave towards their customers but also their employees, suppliers and partners. This transactional culture damages profitability, employee engagement and business productivity.
Your business culture is the heartbeat of your company. If it’s not healthy the business struggles and ultimately the business fails. You need a healthy heartbeat to grow.
You can see this transactional mindset in society too; teachers measured against league tables, doctors on waiting times, the NHS on “care hours per patient per day”. How does that make a nurse feel or the patient? How does that help them get better? The amount of quality time spent with a patient is the most important part of their recovery. You can build cars like that, but not deliver patient care.
Quality time with your customers is just as important to your business. You need to be less transactional and instead, transform into a relational business.
At Awardaroo, we create relational businesses with a purpose, a strong heart, a healthy heartbeat, they engage their staff and their customers and are much more profitable. We're learning all about relational businesses and the benefits in this article.
Transactional Vs Relational Business
We'll start with quick explanation for those unfamiliar with the term. Transactional businesses are the way most businesses run now. They're profit-driven, which isn't a bad thing by any means. After all, all businesses need to make a profit in order to function. But for transactional businesses, profit is all they care about. It is their bottom line. Everything else is put to the side to prioritise profit.
The reality is, this approach often jeopardises profit instead of increasing it. Only caring about profit ignores the humanity that is behind businesses. Your employees miss out on a better workplace because you don't care about anything but the bottom line. Your customers miss out because you don't care about their experience. Your shareholders miss out because you're losing out on revenue by focusing on all the wrong things.
Relational businesses are driven by people. They're people-centric in every meaning of the word. By this we mean, they're customer-centric of course, but they're also employee-centric. They understand that it's the human experience that drives businesses forward and unless you focus on engaging the people who interact with your business with memorable and positive experiences, you'll struggle to do anything more than survive.
There are many steps to becoming a relational business, but they all revolve around people. To increase productivity, creativity and innovation, you need to make work better for your staff. This allows you to keep your best talent, at their most productive.
This increase in engagement from your employees transfers itself to your customers. Customers will enjoy better experiences due to the increase motivation and innovation that allows them to enjoy all manner of things from better products to improved customer service experiences.
When change our perspective on business to the above, it makes sense how being a relational business is far more profitable than being a transactional one. But just in case you're not sold, there are plenty of benefits to being a more relational business.
Ten Relational Business Benefits:
- Relational businesses build value more easily
- Relational businesses create trust more easily
- They can increase their prices
- They can absorb market shocks more easily
- Relational businesses are less susceptible to boom and bust sales cycles and can more easily increase market share
- They innovate new ideas to stay ahead of the competition
- They have higher staff productivity
- They have stronger brands
- Lower staff churn
- They create more positive reviews
Become a Relational Business
As you can see, there's minimal downsides to becoming a relational business, with many unique benefits on offer.
Relational businesses create more value through being more productive, profitable places to work. They have better relationships with their employees, leading to lower staff churn, increased engagement and business productivity levels. This increased productivity makes them more resilient to economic changes in hard times, and more competitive in the good times. For customers, relational businesses are easier to trust, they're willing to spend more to shop with them and they have better experiences leading to more positive reviews and increased word of mouth marketing.
We can help you transform from the traditional transactional approach to business, to a relational business where your employees and customers love dealing with your company. We achieve this through our one of a kind business improvement programme and our unique productivity tools. Learn more.