The Business of Relationships

This is a guest post from my dad.  I hope you enjoy it!

After speaking with some co-workers I have decided that I am in a small minority of people who have been at the same bank for 20+ years.  I opened my checking & savings accounts at a new bank that was coming in from a neighboring state.  In fact not long ago this bank informed me that they would have to change my account numbers because I was one of their oldest customers in the state and the computers were being updated and that they were purging all the old account numbers to match the new system.  This got me thinking about long term business relationships and how they have evolved in my financial life.

Not long ago my wife decided to change milk delivery service and I called to cancel our old drop off.  The lady answering the phone seemed genuinely upset that I would drop them.  She indicated that we had been with them over 20 years and she would be sad to see us close our account.  She offered to keep the account open in case I ever needed anything the other service did not provide.  I felt bad so I told her that would be fine, knowing I would never use them and now the milk box sits sadly empty on the front porch.  Although we rarely saw our milk man, we always left Christmas gifts for him and the service was fantastic.

My grown daughter & son recently each bought their first new cars and these were the first vehicles in years that we did not buy from our local dealer and the same salesman sold us 3 cars.  This was unusual for a big city dealership that changes salesman like dirty diapers.  When we bought our last car there he was gone so we still bought a car and then later he called wondering why we did not buy it from him.  He had changed sales areas and we did not know it and felt bad about it when we found out.  We have bought the same brand of cars for the last 15 years anyway.  We stayed with them when people told us that domestic cars were junk and that imports were the only way to go.  We felt like they made a good product and we had had great luck with them.  I even bought stock in the company when it was teetering on brink of bankruptcy to show support for them (Jeff’s note: I almost bought stock in them as well, but after consulting with my dad he told me “dont risk what you cant afford to lose”, so I didnt buy it).  I did not really think too much about making money, but I did sell when they did not take government money and doubled my money.  Of course I could have hung on to it and made 9x killing on the stock.

My wife has had the same hair dresser for 15 years or more, we have had the same VISA card for longer than the company we got it from stayed in business, we have been season ticket holders for the local pro football team since 1967 (handed down by my father in law).

Without ever giving it much thought we had helped provide a living for the people that worked at these companies and helped them survive the ups and downs of the economy.  Even though some of them you never meet, I always felt I had a relationship with them and the company they worked for that was beneficial to both parties.  They provided us with good service and we continued to spend our money with them.  We could have gone to other companies for less money but felt like we should stay with them if the cost was close.

Jeff’s note: I’d have to agree with this – if the people im purchasing a product from have a good product and treat me well, I see no reason to switch, even if the cost is a little more.  I’ll gladly pay a bit extra for service any day of the week.  I’d rather get it from the person/company that I know has it for a reasonable price than try and find something new and jack around with it for 2 weeks. (This is probably where  I get it from)

Readers: Does the business of relationships extend into your financial life as well?  If so, how and with which products?  Are there some products that you’d change at the drop of a hat regardless of your relationship?

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27 thoughts on “The Business of Relationships

  1. I think this applies to small, local businesses more so than anything else. It’s very important to support small businesses, but it’s something that I haven’t really done much of.

    We have a local coffee shop that is having a hard time. Reading this has got me thinking about frequenting it a bit more…just to see if I can help him out.

    • Personally, I dont think this applies to one type of business any more than the other – if they have a good product with good service, I dont care if they are a 1 person operation or a 1 million person + company. That being said, I usually do try and give the local guys a little preference if their product is within range of the large guys.

  2. I do stay with a business if the product and service is good. I don’t stay out of just pure loyalty though. I find that some small local businesses have entitlement issues. ‘We are local so you must go to us’. A good example is when my daughter was a toddler. She was drinking soy milk. I wanted to buy it in bulk. I was hoping for a small discount buy not expecting it. I went to our local hippy grocery store that had been around for over 20 years. I was a familiar face and knew some of the employees an managers. I told them what I needed. They were guaranteeing that I would be coming into their store twice a month to get groceries and milk in bulk. The end result was no discount and I had to go to two separate offices every time and than go to the check out. The worst was the customer service- it just sucked! Next I went to Wild Oats (it was just sold to Whole Foods). I walked in and was handed over to the day supervisor of dairy. He got me what I needed, I was given a small discount for buying in bulk, walked my groceries out and handed me his card. He said, ‘call ahead and we will have it waiting in the front.’.
    Needless to say, the local store lost my business. It was one of many tries over the years to support them. In the end I figured they didn’t want my support!

    • That’s the worst part when something like that happens – but if you give them multiple chances to impress you and they never do, then there’s simply not much that you can do. People shopping there are either used to a terrible experience, or they dont mind it. I’ll tolerate it up to a point, (as I think most people will) but eventually the market will take care of them.

  3. Hello Jeff’s Dad, really enjoyed reading your post! I’m a creature of habit and agree with you Jeff that as long as the service is good you have my business. I have all my insurance with the same company going on 25 years now, holy cow am I that old? I have shopped around but the discounts I get can’t be beat and the service is just fine.

    • I agree paul – and insurance is one of those things that I have been paying for for 10 years and have only just recently used. I dont know what it’s like at other companies, but the hail damage claim I made was an easy one. Totally painless and i’ve got no reason to switch now. They are also the lowest price, so you cant beat that with a stick.

  4. I think it is different with us yougins (am I allowed to still be called that at 30). For most non-service arrangements it is just a commodity. I love sprint been with them for 8 years, would I change if they doubled their prices? Yup. Same with my bank.

    Not sure I am leaving my CPA anytime soon.

    More importantly, what team do you have season tix to and when is Evan visiting and going to a game?!

    • I agree with the commmodity – I’ve been with verizon for ages and have had no problems, but if the service starts getting expensive, I’d switch. I just find no reason to right now – I know they are the lowest price and I still have good service, so I have no complaints.

  5. Good article by the Oracle himself. I was also thinking about this topic recently in my choice of cell phone carrier. Even though I had been with one for nearly eight years, I dropped them because I perceived them to be failing in getting useful devices on their network. I can’t say the service I got from my new carrier has been bad, but it also hasn’t been great. I’ve found myself wondering whether or not the decision to switch was premature. Time will tell, as I just signed up for another 2-year contract extension with the current carrier.

    Today more than ever, business relationships are often defined by quality of service, especially with so many competitors vying for the same business. I try to do right by my clients every time, while continuing to innovate, so they keep coming back to me. If I’ve been successful, I’ll have clients that don’t even think twice to consult me on their problems, and many won’t even bother asking for another opinion.

    • Thanks for stopping by.
      I agree that quality of service plays a huge role, unless the audience is captive, such as it is for my student loan. the service sucks, but i still have to use them.

  6. This also works well with mechanics. My in-laws have been using the same mechanic for 10+ years. I started using a mechanic once I moved to where I am living and was happy with their service – I knew I could also trust them because he didn’t pressure me to get the repair done right away. I have found that staying with the same mechanic works well, but in some cases it is better to try out new services (like insurance) – it helps it stay competitive and provides jobs just the same. Maybe not as personal, but still.

    • Great point 20s finances. I actually had a good mechanic that I’d always go to where I used to live, but dont have one where I currently live (that could be good or bad) but I havent had any car problems in the past 2 years, thankfully.
      I feel like when a human face gets put on the service (esp in a small town like where I live) it makes it easier to stay with the person.

  7. I like my bank/insurance provider because they treat me well. I don’t foresee ever leaving, but I have to agree with Evan in that if they did start treating me badly, I’d consider it.

    I think in general I’m the type to be loyal to a trusted product or service. It’s just easier than reinventing the wheel every time.

    • I agree lindy – i’d rather be loyal and get the same service i’ve always gotten then switch every 2 years and not know how things work and end up missing out on benefits or having to pay for things that used to be free.

  8. Well, I am having flashback memories of getting milk delivered to our house when we lived in Wisconsin …..oh wow….40 years ago. Looking back, that was pretty darn cool. Now, we have to go to the grocery store for milk.

    I will stay with a company for the duration. I am not fond of change at all. I have been with Cingular now AT&T for 11 years.

    • I know what you mean lisa – I’m still kind of waiting for the bank thing to shake out, though it looks like after BoA stopped with the fees that’s going to be all until they dream up a new revenue stream.

  9. I grew up in the New York area with parents who believed in long term business relationships. Overr the years, I think I maintain long term relationships with friends (nearly 40 years), banking (40 years), medical (25+ years) and various other. If they perform well for me, I return the loyalty. I think I sound a little old fashioned?

  10. I grew up in India where only relationship matters.Sometimes even we just go in to shops and buy things without paying. We trust each other that payment would come the next time I remember to bring my wallet. Newspaper, milk, vegetables, fish flowers can be home delivered from the local stores. People even discuss sports and politics for hours with the corner tea stalls.

  11. Mr Dad,
    Loved the fact that your Dad did a guest post, fantastic! I’m calling my pops as we speak to get him to write for us.
    As for binding relationships i think that a strong personal or business relationship is worth a premium in todays world. If you trust, respect and like the person you are doing business with than the cost for service should not be as big as concern as the value derievd.
    As a financial planner and owner of our firm thats the foundation of our business.

  12. Hello Jeff’s Dad. Thanks for writing on the site. It is so great to read a different voice. I think loyalty has it’s place but it really depends on the industry these days. Some are very volatile and as much as you would like to stay, circumstances lead to a move. For me I think it is a balance of getting what you need and providing what you are supposed to and staying happy in that process. It seems now that most companies are satisfied if you put in 3-5 years. That is considered long term.

  13. I think it’s a lot more difficult these days to maintain long term relationships. People changes job all the time and I never see the same face when I go to my credit union. Of course, I only go in once every year or so.
    I got our car from the same internet sales manager though. He changed job and sent out an email to his list so I knew where he was. I shopped around, but he gave me almost the best price and eventually matched the lowest price offered. I’ll probably check with him again if we need another car someday.

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