I’ll never forget the moment I realized that making the highest possible margin on a sale was the least important part of a deal.
I was a junior at UMass Amherst, and on a field trip to TJX (the parent company of retail giants Marshall’s and TJMaxx). TJX is an incredible company, and I have nothing but respect for them, but the trip was geared more towards learning about the “game” that is played in the fashion reseller industry than anything else.
We talked with a buyer, who explained how deals were argued and argued upon, down to the penny, to get the best possible price. I respected the ferocity, but couldn’t understand how people could have a solid relationship while arguing over pennies, literally. It was at this very moment that I realized that in the area of business I wanted to enter (media and marketing), building up relationships was based not on the bottom line, but rather on trust was. In the media and marketing industry, trust is everything.
Before we go any further, let me just stop and say that clear that my company, DOG Media, never has “clients.” We have “partnerships.” When creating partnerships, everything is a joint decision to a better future for a businesses end needs, and my company makes it a point to assess the longevity of a potential business relationship.
We are a firm believer that as much as negotiations are a necessary evil of deals, they can become detrimental to a partnership before the partnership even begins. A cutthroat, no-prisoners negotiation will leave one side defeated and the other with their spirits too high, and this is only the beginning of the partnership.
If everyone delivers, then everyone will get paid and everyone will be happy. Leaving $100, $1,000, maybe even $10,000 on the table will show a new partner that you are committed to proving yourself and creating a longstanding relationship. Sure, you may lose you some money in the short-term, but if you deliver, you have created a lifelong partner. That partner, who otherwise may have only worked with your company for a year or two, is now committed for the long haul, because they believe and understand that you have their brand’s best interest at heart. The most vital piece of any deal is winning over the emotional equity of a future partner.
Another mistake businesses make is putting too much time and too many resources towards new client acquisition, and not enough towards client retention. An article that made its way around my office lately highlights the importance of client retention.
Every deal, every meeting, and every moment that we are put into a situation to get a signature, we always calculate how to ensure this person, company, or brand is going to be with us for the next five, ten, or even fifteen years.
Business used to be about honor, loyalty and keeping your word. In today’s business climate, it’s veered off that path, but these ideals are things that we try to instill in every deal, with every partner, and at every turn. You’re not going to be able retire because of a deal you made with a “one-off” client. You will be able to retire from massive partnerships that expand beyond anyone’s wildest dreams.