In this episode of Sequence Over Strategy, Michelle dives into the uncertainty swirling through today’s economy and explains why now is the time to double down on relationships, not just strategies.
Are your relationships recession-proofing your business? Could one well-timed conversation be more valuable than your entire marketing strategy? In this episode of Sequence Over Strategy, Michelle dives into the uncertainty swirling through today’s economy and explains why now is the time to double down on relationships, not just strategies. She breaks down why centering real connections with clients, audiences, collaborators, and colleagues builds true business resilience. You’ll learn how relationships act as “force multipliers, " making everything else in your business work better, especially when things get shaky. Plus, Michelle shares simple, actionable ways to reconnect and nurture your network starting today.
Resources
Check out the full episode at TheMichelleWarner.com
Michelle Warner on the Web | Networking That Pays | Free Workshop
Hi, I'm Michelle Warner, and I'm a business designer and strategist. In the 15 years I've done this work, I've noticed the same trend everywhere. Business owners are falling into the trap of centering strategies first, when they need to be centering sequence.
Because the reality is, the steps you take in the business and the order in which you take them is more important than how well you implement any single strategy. So on this show, my goal is to fix that by helping you find and trust your own sequence of actions rather than blindly following someone else's strategy. Welcome to Sequence Over Strategy.
Understanding the Current Economic Lull
In every episode of this show, I tackle a real question I'm hearing from real entrepreneurs. And today, I'm talking about the uncertainty that's happening in the markets, in the business ecosystem, everywhere at this moment. We're in a weird place.
If you, like me, are located in the United States, we're definitely in a weird place. And the choices our country are making right now are leading to a lot of uncertainty in the global economy. And I'm getting a lot of questions about it.
And a few episodes ago, in episode 26 to be specific, I spoke in broad strokes about how people respond when there's market uncertainty. I talked a little bit about how different consumer groups might fall in, what their reactions might be, different responses we might have as business owners, different responses consumers might have. And I recorded that during a time when I had no idea what was about to happen, but it felt like something was on the horizon, so I wanted to get ahead of it for you.
And since then, predictably, a lot has happened. Tariffs have been announced and then taken back. The stock market has been on a wild ride.
And the boomeranging, kind of back and forth, has led us to this weird in-between right now where it looks like things are about to happen. I think we all feel an ongoing sense of, you know, what's about to drop. And we're starting to see some impacts, but no one is really certain still.
No one's really sure what's going on. So we're in this really weird place that it feels like a lull. And I want to take this time once again to get ahead of things for you, because I think that's exactly what this is.
It's a lull, but it sure feels like something is on the horizon. Because while I have no idea what's to come, I do know that in moments of uncertainty, and someone said it kind of feels like we're sitting around holding our breaths, waiting for that something to happen. And I just felt that, that felt so real.
Well, it's a good time to get back to basics. When we're in these kind of lulls and in these moments of uncertainty, get back to some things that can ground us and give us some direction. And you're going to be shocked to hear that particularly for me, those basics include the importance of centering relationships right now.
Stick with me, because when things are uncertain, there are two assets I always want to have. Number one, I want to have cash in the bank. Number two, I want to have strong relationships of all kinds on my side.
Time and time again, we see in the research, we see in just all the anecdotal evidence we have that those two things lead the charge when it comes to who makes it through uncertainty. So if we get into an actual recession or just these moments when people aren't sure what's happening, those are the two things that lead. And I'm not a financial advisor, so I'm not going to tackle the cash question.
But I am going to do my best to, once again, convince you why now is the time to double down on those relationships and what kind of relationships I'm talking about and what kind of benefits I'm talking about to get really real, right? I can sit here and lecture you, and I feel like sometimes I do sit here and lecture you all the time and why it's so important to have relationship marketing, why it's so important to know how to network and to build out these very intentional networks so you have them in your pocket. But let's talk about right now why that matters.
Why that matters right now, and if we think about this in kind of an order from closest to your bottom line, closest to that cash to further out, we have a ranking system. And I would call that ranking system, right, people in your lives. We have your clients or customers.
Then we have your audience. Then we have maybe your collaborators and then your colleagues. And these groups of people all matter for different reasons.
But again, there's a driving force that connects them. And what connects them is we have studies, we have so much evidence that consistently show that relationship-centered businesses develop resilience, and they do it because those relationships that are in place drive customer loyalty. They drive colleague and partner commitment.
They drive a lot of preference, we'll see when I get into some of the data. They drive community support. So the bottom line is having relationships in your pocket means you have a force multiplier working for you.
That matters all the time, and it really matters when markets get skittish. And what do I mean by a force multiplier? I mean that if something is in place, it makes everything else, all of your other efforts, do better than they would without that thing in place.
So if you have strong relationships in place, well then everything else in your business is going to be better positioned and is going to perform better than it would if those relationships were not in place. So we're not just talking about the central thing that those relationships drive, right? We're not just talking about a client purchasing an add-on service from you.
The Power of Relationships in Business Resilience
We're not just talking about, you know, an audience member buying something from you for the first time. Because that's traditionally what we think of in terms of these relationships, right? I'm only talking about it from a marketing standpoint.
But these are force multipliers. They make everything else in your business work a little bit better, and that then builds resiliency in your business, and that then makes it easier to get through some of these difficult times. So if you are somebody, you know, whose business is aligned with relationship marketing, 100% time to absolutely double down on that.
And even if you're somebody who has a business that is more aligned with traffic marketing, it's still a time to center the relationships. Maybe it doesn't translate into your marketing in exactly the same way that relationship marketing does, but having some of these relationships in place so that you can have some of these force multipliers and they can be at work for you is really, really important. So let's talk about some of the reasons.
What are some of the force-multiplying effects that we see when you have these relationships really buttoned down with your clients, with your audience, with your collaborators, with your colleagues? Let's talk about your clients first. And I'm just going to go through some really typical data that we see that shows what happens if you are centering the relationships on your clients and you're really thinking about the relationship side of things versus looking at it from a transaction mindset.
What we see with clients, we see less revenue volatility during economic downturns, meaning your businesses who are more transaction-based are going to ride a little bit more of a roller coaster, whereas if you have relationships with your clients, they're going to find ways to stick around with you. There'll be less volatility. We find that you retain customers longer than businesses that are more transaction-focused, right?
And so that's going to help create predictable revenue streams and enhance, you know, your ability. That builds resilience. When you have more predictable revenue streams, you have more resilience.
Not surprisingly, we find that businesses that center relationships with their clients are going to recover more quickly from market disruptions than those that have more of a transaction focus. You're going to increase retention rates, but when you increase those retention rates, again, that's going to be a force multiplier, and let's say you increase your retention rate by, say, like 5%, the increased profit sometimes of that can be much larger than that. They can be 25, 50, 75% increased profits over time by increasing that retention, and we do see increased retention when your clients come from a relationship place.
We see higher lifetime value, and we see customers stay longer. We see people who are less sensitive to price increases and people who are more likely to try your new product offerings, and so that gives you, you know, substantially longer-term profitability, which, again, builds resilience. We see a greater likelihood of contract renewal and expanded purchases.
Again, when the business starts from relationships, we see all these things. What do these things add up to? They add up to a resilient business.
They add up to a lot of force multipliers, and they also, I want to point out, show you some of the long-term impact of really committing to relationship marketing because some folks who are a little hesitant to commit to relationship marketing will tell me, oh, it takes a lot of work. The timeframe is longer to get some of this stuff up and running, especially if you're looking for people who want to be collaborators with you, right? Like, you're investing in personal relationships.
That takes a little bit longer than just posting something on social media, so sometimes when people are just thinking about this in terms of getting one customer, even if it's in alignment with their business, they struggle to kind of wrap their brains around the ROI of this because it sounds hard. Well, I would point to the list I just gave you as one of the reasons why it's worth it because I spend a lot of time talking about that initial purchase because that's what a lot of us need, right, is to have that relationship funnel in place so that we can better find those initial purchases, but what I'm showing here now is that those initial purchases are much more valuable over the course of the relationship because of how you initially anchor them.
Since you initially anchor them in a relationship, those are going to keep paying off much longer than a single transaction purchase, right? A single purchase that is made under a relationship funnel is going to have longer-term impact, is going to stick around longer, is going to make other purchases at a rate that is much higher than a purchase that is originally made through transaction or traffic methods, and that's important to know because when you're looking at the ROI of really committing to relationship marketing, it's not only a benefit when markets get weird, you're just more resilient to that, but it's also a benefit. You have to think about that long-term benefit, so that's what we think about clients.
If I were to sum this up in a bottom line, we're talking about less volatility with your revenue, we're talking about them sticking around longer, we're talking about them trying new products and services that you may be rolling out, and we're just talking about them being more open to being a lifetime customer of yours and not just a one-time purchase. Those are all really valuable things to keep in mind when you are thinking about how can I build resilience, not knowing what's about to hit, right? Not knowing what shoe is about to drop.
Tactical Tips to Rebuild and Strengthen Connections
What can you do right now? Right now, you can really commit to your relationships. Second group, your audience.
So now we're expanding this, not just our clients who have already purchased, but our audience who may not have yet made a purchase decision. What do we know about how audiences can help you build resilience if you're really invested in your relationship with them? Well, we know that businesses who do center relationships with their audience are more likely to survive their first five years.
So there's a lot of data out there that small businesses have really abysmal success rates in getting past the five-year mark. But we have data that if you center your relationship with your community, with your audience, you're much more likely to get past that mark. So that's going to build resilience.
We see that there's more loyalty during economic downturns, and this is just common. We've seen some of this rallying around during the COVID pandemic, during other times. Some of those small businesses, we can just think about small businesses, retail chains in your community, people rallied around making sure the small businesses got through, right?
They just assumed that some of the bigger box retailers would figure out a way. They didn't feel that loyalty to them because it's a very transactional relationship. But some of the smaller businesses in town, they kind of went out of their way to support.
We would have big nights where you should order takeout from your local restaurant so you could do whatever was safe in that moment. And so we saw that play out really clearly during the pandemic, but it's also true of your relationship with your audience. If you are a small business owner and you're talking to them online or something, they're going to feel loyalty to you in a way that they don't feel loyalty to businesses that take more of a traffic or transaction approach.
And so again, what do we see here? We see more resilience for your business. When you are building those relationships with people, you're going to get it back.
In moments that are uncertain, they're going to show up for you. They're going to help you get to that five-year stretch. They're going to help you get through moments of uncertainty.
So it is worth it, not only for that short-term moment of getting a customer, but also just building that loyal audience who's going to show up in moments of uncertainty. And then our third and fourth groups I put together are collaborators and colleagues. I put them together because this can be one and the same often, right?
Who are our colleagues who we partner up with to figure out ways to collaborate, figure out ways to partner, figure out how to help ourselves and each other. What do we see in the data here? What we see here is that businesses with really center relationships, like with their supplier relationships, are usually able to secure priority access to materials during supply chain disruptions.
So that's something we're hearing a lot about right now. What are the supply chains going to look like? If you're in the U.S., if shipments from China are really falling off a cliff right now because we have all this tariff uncertainty, well, who's going to have access to the raw materials that we do have? It's likely going to be somebody who has strong relationships with their suppliers. So small businesses who haven't built relationships with their suppliers, aka their colleagues and collaborators, they're not going to get that preferential treatment. They're not going to be able to skip to the top of the line for the raw materials that may be available to small businesses.
We also find that they have access to informal financing networks, allowing them to create more operational resilience. And so again, we can understand what this means, where if you're thinking about more of a traditional offline small business experience where you need raw materials and you need access to financing lines, you're going to get preferential treatment if you have built relationships with the people who control those things. Well, guess what?
That also translates to online. If you have built relationships with your ecosystem, with the other providers in your space, with the other people who are touching your customers, you are all going to find ways to help each other. You will find ways to skip each other to the front of the proverbial line and build resilience for each other.
So again, this is what happens when you have relationships. It is like one of the biggest cheat codes that's out there is when you have relationships, there's still a human element in business and people help each other. And so it's all fine and good that we want to talk about, make sure that your business is aligned with the right type of marketing and all those things.
That's all critically important. Everything that I always talk about. And also what we don't talk about enough is how they build you this cheat code and how they help you over the longterm.
If you are building these relationships, they're just there for you. It is like one of the most valuable assets and cheat codes that you can have. And so this isn't an accident, right?
And I want to reiterate this. This is part of the untold story about why the businesses that are in alignment with relationship marketing are in alignment there. Like relationships may take longer to put into place, but when you're talking about the high ticket stuff, when you're talking about maybe custom products and services, when you're talking about having things that build deep relationships, this is the other stuff that comes with it.
So yeah, maybe there is a little bit more of a timeframe that is required and maybe it's a little more difficult to get up and running because there are other human beings involved. And so you're not completely in control of what will happen. But when you start thinking in this way and when you start realizing again, those force multipliers that are in place, you realize this isn't just about being in alignment with marketing.
It's an important piece of it, because if you're not, then you're just already setting yourself up to do a lot more work and have a lot more frustration than is necessary. But if you are first setting yourself up in alignment and then understanding how that also builds you for resilience, that's a real gift that you can give yourself. So hopefully I have convinced you that while it's always a good idea to double down on your relationships, now is a particularly good time to do so.
Because again, what businesses make it through a downturn? Well, the ones who have cash in the bank and the ones who have relationships to count on. And so it's not too late.
It is not too late. While we are sitting here wondering what's going to happen in this lull, what's going to happen in Q3? What's going to happen in Q4?
Are these things going to come to fruition? I don't know, but I sure know that I am going back to my basics and I'm doubling down on this stuff. And I wanted to offer this to you as something that you can double down on as well.
Because even if we don't go into a dark place, and I hope we don't, but even if we don't, this is going to pay off for you. This is never wasting time when you are centering relationships. So here are a few very tactical things that I can offer you if you're somebody who has heard this and saying, okay, Michelle, I hear you.
I'm going to double down on my relationships. Here are three things that you can do in order to kind of kickstart that effort. Number one, if you're sitting there realizing, gosh, I really need to reconnect with some folks, here's a really easy way to do it.
If you already know someone, but it has been an uncomfortable amount of time since you've spoken with them, and maybe you feel a little bit of guilt or shame or just awkwardness around that in terms of how you're going to approach them again, I would suggest that you send them a specific thank you note. And what do I mean by that? I mean, instead of reaching out and saying, hey, I'd love to catch up.
I mean, who knows if they have time for that or if they would respond to that. Think back to a moment that you two shared. I don't care what that moment was.
Think back to something relatively profound, whether it was a shared joke or a moment you were together and figured something out, a project you worked on together, a client you shared together, whatever it may be, think back to something that anchored your relationship and just reach out to them and thank them for that moment. Say, hey, this week, I was just thinking back to this project we shared together and I just wanted to reach out and know it's been a long time since I've spoken with you, but I wanted to reach out because I remembered this one contribution that you made or this one thing that you brought to the table and gosh, I really appreciated that and it has informed my work going forward, right? Or you can say, it's been so long since we've talked and I'm so sorry that I've let that happen, but just this week, I remembered this business dinner we were at and this funny thing that happened there and that just made me laugh and so it gave me an opportunity and I thought, gosh, I should reach out to you and say hello.
Those are easy ways where you can reconnect with folks, right? Just remember one specific memory, one specific example where you can reach out to them and give them a little bit of an emotional connection so they want to reach back out to you and say, oh my gosh, I remember that too. That was so funny.
Thanks for reminding me. And now you've opened the door to having an ongoing conversation. So that's the number one thing you can do.
If you're just feeling the need to reconnect with some folks, send out some specific thank you notes. If you want to think more strategically about who you should be connecting with and how to do so, I'm going to send you over, I have a free training that will help you do this. It's something called Ideal Connection Avatars and it's covered in my training that you can access at www.themichellewarner.com slash free training and that is just going to walk you through my Networking That Pays system and talk you through how to think strategically about who you should be reaching out to. And listen, if you are really ready to commit to doing this, this is something you've been hearing me talk about and thinking about for a while. Come into Networking That Pays. This is my Networking That Pays course.
It's only $497, super, super affordable and is going to walk you through the whole process of first understanding who you should be connecting with so you're not wasting time connecting with people who aren't going to help you build resilience for your business, aren't going to help you build, you know, force multipliers. We're going to help you identify who exactly you should be reaching out to who will deliver those things. And then we're going to talk to you about exactly how to do it, get you into a system where for five minutes a day, you can be reaching out to folks and building these relationships.
So you can learn more about that over at NetworkingThatPays.com or if you just go to TheMichelleWarner.com slash NetworkingThatPays. Both of those will get you to the course page and you can jump in at any time. Join us for $497 and I'm on a live Q&A for that every single month where we brainstorm and we talk through, hey, you know, I want to connect with this person.
I don't know how to do it. Great. There's a ton of resources in the course that will teach you how to do that.
But if you want a group of people to brainstorm those things with, we do do that live every single month for an hour where people just come with their questions or their situations or their scenarios and we work it through and we find ways to move forward so that you are connected into these relationships. And if this is something that you really want to commit to, I cannot recommend this course enough. It has just been such a joy to bring to this world and it's now been in existence for about five years and the number of people who have made connections and shared stories, it is just absolutely overwhelmingly brings me so much joy.
So if you are ready to really commit and connect to your relationship building, come join us in Networking That Pays. And if you're just ready to dabble with it and give it a try, do one of those other things, right? Send out a thank you note, watch the free training, get clear on who you should be connecting with and how they can help you because the one thing that I want for all of you at all times in good and bad, is to have those relationships backing you up, have that asset in your pocket.
And in particular, when we're in a little lull like this and we don't know which way things are going to go, it is a great time. If you're wondering what you can do right now to help yourself, what you can do right now to help yourself is to build some relationships and make sure that you are building that resiliency into your business as much as you possibly can. Having said all that, thank you for being here today.
And thank you for always showing up for me and for always showing up and sharing your stories and reaching out to me and saying how the podcast helps you. Those things mean the absolute world to me. And if any of you do have stories about folks you've connected with or other relationship marketing or connection stories, I would always love to hear them.
So drop me a note. You can always reach out to me at hello at themichellewarner.com. I want to hear them.
So tell me all of the stories and all the successes that you've had. And as always, thank you for being here today. If this episode helped you, I would be so grateful if you shared it with someone else that might help.
Or if you can leave it a review because that helps expose it to other folks. And as always, I will see you back here in a couple of weeks.