Why is relationship building important in business?

Why is relationship building important in business

Today, almost every aspect of our personal and professional lives revolves around relationships. The same applies to businesses. It is, after all, through relationships that businesses are able to create new opportunities, attract new customers, and grow. The internal functioning of a business depends, to a large extent, on the bonds that exist among its employees, while its external success depends on the connections it forms with its investors, vendors and customers.

According to Forbes, 71% of companies say that they would prefer to invest in a person with great interpersonal skills over someone who is purely skilled at technical or managerial tasks. If you want to build strong relationships with potential clients, foster camaraderie among your employees, and develop a rapport with your investors and partners, you should focus on developing these skills early on. 

What is a business relationship?

Business relationships are the links that exist between all parties involved in any transaction within a business. These include the relationships that exist between businesses and their partners, investors, customers, and stakeholders, as well as the relationships among key individuals working for the business.

Why do business relationships matter?

Business relationships are important for many reasons. They help you build strong personal connections with people who will be helpful to you in the future. They also give you an opportunity to learn new things about yourself and others. In addition, they allow you to connect with people from different cultures, backgrounds, and experiences. If you’re looking for ways to improve your professional skills or network with professionals in your field, you need to consider sharpening your relationship skills.

Types of business relationships

Businesses often work with other businesses to achieve common goals. These relationships fall into one of three official categories: 

  • Business-to-Consumer (B2C): This type of relationship refers to when companies sell products directly to consumers. This includes retailers like Walmart, Apple, and Amazon.
  • Business-to-Business (B2B): This type of relationship refers to when companies sell goods to each other. Examples include manufacturers selling parts to distributors, or wholesalers selling to retailers. 
  • Consumer-to-Business (C2B): This refers to when businesses provide services to consumers. A good example is a restaurant providing food to customers. 

Then, there are the personal relationships that are created within businesses. One of the most important types of professional relationships is the one where individuals connect with other individuals within their organization. It is these strong business relationships that ensure the success of a business above all else. 

How to increase profits through team building

5 benefits of business relationships

Business relationships are mutually beneficial and can be very rewarding. They offer many advantages such as access to new markets, more customers, additional resources, and improved customer service. Below are some of the greatest benefits of business relationships. 

Improved collaboration

People who work closely with others tend to do better on projects. After all, having coworkers you like and trust makes it easier for you to collaborate effectively. You feel comfortable asking questions, sharing ideas, and even offering advice. This leads to improved performance overall.

Improved communication skills

Business relationships help us develop our communication skills. We learn how to talk to people we don’t know well, and we practice speaking up and listening carefully. As we build these relationships, we become more comfortable talking about ourselves and sharing information.

When you start building relationships with people inside and outside your organization, you begin to understand how people think and act. You gain insights into what motivates them, what frustrates them, and what makes them laugh. You learn how to listen better, how to ask good questions, and how to make decisions based on facts rather than emotions.

Long-term bonds

Business relationships are like friendships. They start with one person doing something nice for another person. Then, over time, the relationship grows deeper. Eventually, the two people become close friends. Just like friendships, business relationships require trust and respect. In addition, just as with your friendships, you want to build good habits into your business relationships.

Customer satisfaction

Positive relationships in the workplace lead to a positive working environment, which in turn improves productivity and the way a business functions as a whole. Through effective relationship management, you can improve customer relationships and customer retention rates.

Improved morale

Psychologists say that having good relationships with the people we spend many hours with each day can improve our morale, which can positively affect our productivity. A study conducted by researchers at the University of California Berkeley found that workers who had better relationships with co-workers reported being happier, less stressed, and more engaged. One reason why this happens is that happy people tend to be more creative and productive.

What makes a successful business relationship?

There are a few key markers that signify a successful business relationship. If you want to improve your relationships at work, look for these characteristics in your interactions with your colleagues. If you can identify them, there is a good chance that you are succeeding at forming mutually beneficial relationships:

  • Trust
  • Respect
  • Communication
  • Honesty
  • Mutual benefit
  • Compassion
  • Openness

Expert tips to build business relationships

Organize a team-building event

One of the best ways to foster positive relationships within a business setting is to organize and partake in team-building activities. Team spirit is an integral part of business relationship management. When employees engage in team-building activities, they are given a platform outside the office to organically connect with each other. 

Not only does this improve communication between employees, but it also allows them time to genuinely get to know each other, which allows for workplace relationships to flourish. Sometimes, genuine relationships need to manifest outside a working environment for them to be successful inside the same environment. 

Organize a team building experience

Be authentic 

You need to be yourself and show others that you are genuine. People want to engage with those that they feel comfortable around and can relate to. If you try to act like someone you’re not, you won’t succeed. You also need to be aware of the things that you can’t say because they might offend someone. Instead, focus on finding common ground and making connections based on shared interests and values.

Actively communicate 

There are three types of people in every organization: the important contacts, the unimportant contacts, and everyone else. You cannot have a meaningful conversation with everyone, but it’s possible to talk to most of them at least once a month. This way, you don’t overwhelm anyone, but still let them know that you’re interested in what they’re doing.

The key is to identify your most important contacts and develop a strategy aimed at reaching out to them regularly. Every week, send a courtesy email asking how things are going. Follow it up with another email about six weeks later. Keep doing this over the course of several months, and you will find that many of your contacts become part of your network.

Provide feedback

Feedback is a key element to building strong relationships and is heavily tied to the communication aspect of the relationship. Long-term relationships are a two-way street and only work if you are open enough to admit when things are not working, and are also happy enough to acknowledge the positives in the relationship. 

If you want to create a healthy business relationship, you cannot hold on to resentment or anger at other people when you are unhappy with what they are doing. Successful relationships form when feedback is given and received, in a positive manner, by all parties. 

Team building services

Fostering positive and long-lasting business relationships is essential if you want your business to thrive. One of the best ways to ensure that quality relationships are created is to organize regular team-building activities. Kronos has revolutionized the team-building landscape. 

We offer a turnkey approach to team building, beginning with a two-week build-up period to the actual event that is aimed at sparking curiosity and excitement within your team and ensuring they are invested in the experience. To achieve this, we create a personalized and evolving webpage that employees can follow in the weeks leading up to the event. 

You have four specially designed events to choose from:

All of these will engage your employees’ minds, get them working together, and will be an all-around unforgettable experience. They are made even more memorable by the fact that you can take home a video recording of the entire experience. From start to finish, we create the ultimate team-building activity designed to help you improve internal relationships within your business. 

Learn more about our team-building events