Language – if we listen carefully –reveals a lot about the changes happening in society, and business is, of course, an important part of our society.
That’s why I was fascinated by a short exchange between an interviewer and the CEO of a company that curates clothing and sells it on a subscription basis over the Internet.
The host asked if the company had deals with various big name labels. In her answer, the CEO said that her company had strategic relationships with all the major fashion brands.
A shift in thinking
Shakespeare famously wrote in Romeo and Juliet that “A rose by any other name would smell as sweet” – but sometimes a change in terminology reflects a change in how people are thinking.
Traditionally, we have “deal makers” in the business world. Today, I think “relationship makers” are more important. Deal makers would often focus on negotiating a price and other tangible attributes of a product or service that would suit both parties in a sales contract.
I don’t want to downplay the importance of those elements, but with multiple channels of communication and with consumers vested with increased power and knowledge today, other, less tangible, elements are increasingly important.
What’s important today
In broad terms, raising your profile in Cyberspace, may, in the long run, be as important as the per item price you negotiate today. I think the example of the online subscription clothes business illustrates this point.
Imagine you’re a major maker of jeans. What problem are you facing right now? I think it’s safe to say that you’re watching your traditional brick-and-mortar outlets close locations one by one. Someone like this online seller comes to you and wants to do business. In the old days, you may have simply insisted that the company commit to a certain volume each month to guarantee a certain price level.
However, that would be taking a very narrow view of the situation. Your bigger problem is to get your legacy buyers and new buyers to recognize your brand as a brand that can be easily and reliably purchased online. Therefore, in addition to any pricing you negotiate, you may want to agree to cross promote each other’s brand in your social media, mention both brands in newsletters, and establish landing pages on one another’s websites, for example.
Why some are struggling
I believe it’s safe to say that some legacy businesses that are having difficulty coping with the evolution to a dominant cyber-world have failed to adequately address the bigger picture in their strategic plans over the last five to 10 years.
Think beyond price and volume when you’re sitting across the table and negotiating with a company, whether it’s a vendor or a customer. Look at where your industry is going and think about how you need to be positioned to be among the leaders. Try to put pieces of that puzzle in place in every negotiation.
Don’t merely strike deals, form strategic relationships.