Several years ago, 3Pillar inherited several clients through acquisition. Much to the credit of the previous ownership, many of these clients had strong personal relationships with the founders of the firm we acquired. Unfortunately, we eventually learned that a couple of these relationships were built, almost exclusively, on the basis of the personal relationship. The business relationship was more about helping each other out than it was about a strong value proposition.
One client, in this particular case, was in the habit of crying wolf. About every nine months the (supposedly senior) executive would call in a panic. Our rates were too high. The CEO was pressuring him to cut off the relationship and we had to do something to demonstrate our partnership. We weren’t reciprocating the relationship by buying his product and it was making him look bad. The ask was always coated in an intense emotional plea.
Each time I met with this client, it became more and more obvious that he valued our empathy, or understanding of his situation, more than he did the actual business we did together. He expected to receive concessions whenever he needed them. He used us as a pawn in his political games.Â He didn’tÂ care about finding a mutually beneficial relationship or compensating us appropriately for our work. He considered the work we were doing together, and the great references he’d give for our work, to be a “favor”Â and expected us to return the favor whenever requested.
We worked to slowly wean him off of this addiction and to ensure we were delivering on a strong value proposition. As we did, the relationship soured.
Eventually, the client’s business was acquired and the executive, once again, came back to plea for a concession. This time he wanted to break the contract in a way that was not only explicitly forbidden but would have landed a significant blow to our business.
We said no.
And he exploded.
Rants, accusations, and significant pouting followed. He blew up. UnfortunatelyÂ for him, he did it in front of his new comrades and was exposed as a hothead. Others came in to clean up the mess.
Luckily, we had delivered enough value that this executive’s antics were seen through and the acquiring company worked with us to clean up the mess. We ultimately returned the business relationship to a professional state, but not without significant angst and damage being done to all partiesÂ involved.
Unfortunately, the executive lost quite a bit of credibility through the process, and we lost a strong advocate in the market.
I still hope to someday reset the relationship with this executive, but I know for sure that any business dealings must be based upon a true value proposition.
Are yourÂ business relationships with clients healthy? Are they truly mutually beneficial? Is the exchange of value equitable?