Know-How Exchange : Customer Behavior

IMHO - Relationship marketing is more hands off than Guanxi.

Marketing in general is more of a corporate entity talking to one or more people. The relationshipis between the corporation and the person.

Guanxi is person to person. The relationship is made between the two people. It goes with the person, so if you have an employee with great conenctions and he leaves, the company has lost most of the conenctions unless someone else at the company built up the personal relationship.

Sounds promising at first glance, but seems only really applicable if doing business in China!

Its probably a sad indictment on modern western business culture that we are always chasing the buck (or pound where I come from), and there isn’t either the time or want to chase a more social relationship with prospects or customers.

But that said, there are valuable lessons to be learned from Guanxi, when used in a truly western setting, and the core family value is seen as a business family:

1. Understand the business – I often find that organisational charts can be misleading, there are often other influencers, power in the organisation, and it can be difficult (if not impossible) for outsiders to understand these.

2. Head of the family – Often the board in formal western business, and needs to be tapped. Ultimately these people control the largest amount of power, and are never just “rubber stampers”.

3. Family Obligations – As already mentioned the main obligation of our western businesses is to maximise shareholder value! (reduce costs, increase profitability), we need to fully understand the role of the business, their mission (both stated and unstated), and unlike Eastern business, its critical that we understand the mission (or drivers) behind the key decision makers, which will undoubtedly be different from the corporate mission (what motivates them).

4. Financial and accountability – what is the financial health of our customers and prospects, unlike many Chinese business that get additional funding from within the family, western businesses often need heavily injections from banks and other financial institutions. So what is their financial health, and is it really in your best interest to do business with them!