The governing principle of all voluntary interactions, whether commercial or social, is that they are based on an exchange of value. Each party feels that what they give is in proportion to what they get from the interaction.
Interactions have two main forms – transactions and relationships. What distinguishes a relationship from a transaction is two things:
- The nature of the value that is exchanged
- The asynchronous nature of the exchange
Transactions involve immediate gratification. Relationships involve gratification over time and in a wider set of forms.
Businesses with strong engineering, science and finance cultures tend to focus on creating the basis for transactions. They aim to offer the best product or service for the most attractive price. But their success in doing this does not guarantee that they will enjoy strong relationships with their customers. The reason is that human relationships involve more dimensions than just the “you give me what I want at a reasonable price” dynamic. Performance is critical – but so is intent.
Stephen Covey expressed this most succinctly when he diagnosed trust as comprising two discrete elements – competence and character. Competence may be sufficient as the basis for a transaction, but relationships depend on the demonstration of both competence (“I am able to provide something of value”) and character (“you believe that I want to do so”). In B2B contexts, it is often the latter that provides the basis for differentiation.