Changing to a more relational business model

Josh Morphew, Baxter Companies

A couple of years ago, we became frustrated with how transactional our business model was at Baxter. We found ourselves chasing a lot of competitors with our marketing tactics, without a lot thought for our audience. We were putting a lot of energy into work for residential clients, which almost inevitably is more of a transaction than a relationship.

We didn’t like the direction we were going with our marketing and our relationships with our clients. So we decided to change where we focused our energy.

Over the past two years, we’ve made some changes to our business model—and I’ve made some changes within my role—that have allowed us to form mutually beneficial relationships with our clients.

About 30% of our business is now residential, and the rest is commercial. We’ve found that in our industry, focusing our energy on building relationships with commercial clients instead of chasing residential clients allows us to channel our energy efficiently.

What does that look like now?

Marketing to the right people

If you’re deep-sea tuna fishing, you’re not just going to throw a net out anywhere in the ocean. You’re going to use the right kind of bait and fish in their habitat. You focus your energy on what will bring you what you’re looking for. Unfortunately, a lot of our marketing had been more like throwing a net out than deep-sea fishing.

We tapered down our marketing expenses and invested in outside sales and relationship management. Some of our larger revenue-producing accounts came from referrals or from someone just out talking about our business, and we decided to pursue clients like that on purpose.

Over the past couple of years, we grew our core service sales and cut our marketing budget in half. We’ll cut it in half again soon. One aspect of our marketing strategy that we will keep is our digital marketing, which we outsource.

Networking to build relationships

I found myself feeling beaten down by business, and I believed that networking sucked. Eventually I saw that my behavior was driving that attitude, so about a year and a half ago I started making myself go to networking meetings and industry associations. I wanted to see which groups were valuable.

I ended up realizing that I do actually like networking, and I’m wired pretty well for it. Part of my goal in networking more was to get a good idea of our audience and where they were. I knew that when I hired on an outside salesperson and eventually a department, I would be able to pass that information on to them.

Being proactive and giving referrals

We’ve found that building ongoing relationships with referral clients allows us to be more proactive than reactive. Downtime for a business is a disaster financially, so instead of being viewed as a handyman, we’re seen as a valued business partner.

Because we’re building relationships instead of just enacting transactions, we do have to be careful when we say no. I try to refer to someone who can help a prospect or client, even if it’s a competitor, because that helps maintain a positive working relationship.

Switching from a transactional model of business to a relational one will probably require a different change for your company than it did for Baxter. But I bet the elements of marketing, networking, and giving referrals will prove to be as important in your transition as they were for ours.

1 Comment

  1. Jack L. Werner on January 3, 2017 at 10:01 am

    Jospeh, Great article! Thanks. Jack Werner, A to Z Inspections.

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