As a services provider, earning the trust of our clients is paramount to our business success. Trust is something each of us must earn. I was taught in a customer development class that all business relationships follow a developmental S-curve(shown above). This has proven true in our services business. Note that this is predicated on an offering with market relavance.
When begining a business relationship, all companies usually start at a neutral or slightly positive position. As relationships develop, both parties will experience some healthy skepticism. “Will they really do what they said?” At this point, there really isn’t much of a relationship. At this stage, the supplier is nothing more than a vendor (position 1). If performance is so-so, the business relationship may stall at the vendor position. If this happens, the supplier is vulnerable and may lose that business to someone else. After all, there is no real relationship. Furthermore, there is usually little tolerance for mistakes at this level of relationship.
Through successful performance, most relationships will develop and move above the neutral line to the position of confidant (position 2). When at this level of relationship, the confidant is no longer just another vendor. The client may begin to include the confidant in their future planning sessions, particularly in the suppliers area of expertise. Clients will let the confidant know what’s coming up in hopes that the confidant will be positioned to support. Although a confidant is not guaranteed that they will be a part of the plan, they will have a strong opportunity. With development of a trusting relationship and continued performance, businesses will move further up the curve to consultant.
A consultant will have even more influence with the client. When at this level of relationship, perhaps the consulatnt will be asked to assist in development of strategy and plans, even outside of the consulatnts area of expertise. A consultant relationship is very strong and is based on trust. Most likely, if the client requires anything that is within the consultant's realm of expertise, the assignment is the consultant's to lose. With this type of relationship, mistakes are tolerated and each party will work hard to resolve these issues to protect the relationship. With continued performance, the trust level increases and eventually the consultant will move to the pinnacle of the curve, the position of virtual partner.
A virtual partner has developed a mutual trust with the client. Each works hard to make sure the other is successful in every aspect of their business. This includes concern for areas outside of an individual or companies expertise. The client will be willing to discuss and seek the vitual partner's input on most major tactical and strategic decisions or company changes. The virtual partner will essentially be treated as an equal and an integral part of the team.
However, once reaching position 3, notice the curve doesn’t flatten out. In fact, it is possible to drop. The significance of this drop is dependent on the business relevance. Even though trust and relationship are strong, without business relevance the partner's value can plummet. Take for example carbon paper sales (some of the people in my office had never heard of carbon paper). Although in it's day, carbon paper was invaluable to an office, today a carbon paper company would get little reception from anyone, regardless of the relationship level. This is when it’s appropriate to expand or change business offerings (begin climbing another S-curve). The key is to start developing the next S-curve at or before reaching position 3.
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