Revenue is an outcome of great Relationships
What is Relationship-Led Growth?
The world is an incredibly noisy place. Buyers receive hundreds of marketing and sales messages throughout the week: from emails, to ads, to direct messages, to calls and even text messages. There is simply no shortage of methods to the madness.
Companies are screaming through their proverbial megaphones causing their ideal customers to feel overwhelmed with the poor outbound outreach and fatigued with the broken, impersonal lead-gen activities thrown at them daily—sometimes hourly.
Your customers are tired of being hounded, harassed, scammed and manipulated throughout their buying journey.
Organizations who don’t adjust their go-to-market approach will lose millions—all because of tired, outdated and out-of-touch sales and marketing tactics.
This leads to missed opportunities, missed quota, declining conversion rates, and rapidly rising costs to acquire. Every single one of your data points—and most importantly, revenue—will suffer if you don’t do something about it now.
Smart organizations will shift their focus and align all their activities and metrics on something fundamentally inherent to business: Relationships. Because smart leaders know relationships drive revenue.
That is the power of Relationship-Led Growth.
Relationship-Led Growth (RLG) is a go-to-market motion that builds revenue-generating relationships at scale by fostering affinity, enabling conversations and nurturing relationships with stakeholders across your entire industry ecosystem.
Understanding Relationship-Led Growth
Relationship-Led Growth (RLG) isn’t a framework to exchange warm introductions. This is a potential outcome—as well as a channel you can pursue as part of your RLG implementation—but it is by no means RLG in its entirety.
The vast majority of available referrals are what we call Affinity Referrals. They’re referrals from people who have never spoken to you directly, nor have they worked with you—but have built up a level of trust in your people and your ideas and are willing to mention you when someone asks about a relevant problem or topic.
RLG isn’t a demand generation framework, either. Yes, RLG can help you generate demand, but it involves both your sales team and outbound strategies as well as customer success and retention strategies.
RLG isn’t a sales and marketing strategy. It is a go-to-market strategy that involves building a relationship culture in your organization, and aligning all business activities and business metrics around building relationships at scale.
Why Relationship-Led Growth?
Relationship-Led Growth is the natural next step in the maturity progression for sales-driven organizations.
1️⃣ Network-Led Growth: When you first started your business, it was all about who you knew at that point in time. You needed the business and you reached out to those people who you have either worked with you prior or those close to you who have connections to the types of people who could use your expertise.
👉You likely didn’t have your niche, revenue model or POV figured out yet.
2️⃣ Reputation-Led Growth: As the business grew, you developed a reputation for delivering great results. Many clients openly or indirectly referred you business. If this didn’t happen, you likely wouldn’t be here reading this.
👉 You likely started seeing patterns in the type of clients that benefited the most from your product/service and were also the most profitable for you. You also figured out your POV and niche, though it likely didn’t fully crystalize just yet.
3️⃣ Networking-Led Growth: As your business grew, so too, did your network. You purposefully and strategically expanded your network. You attended events, joined industry groups, and started building relationships with key influencers.
👉 By this point you likely developed a solid POV on how business in your industry should be done, figured out who your best-fit clients are, and identified what pain points of theirs you can solve better than anyone else.
4️⃣ Sales-Led Growth: You grew to a point where it made sense to build out a sales team to purposefully drive net new business.
👉 To be successful here, you figured out sales processes, created a solid pitch that anyone in your company can repeat, and implemented technology and systems to enable sales conversations and relationship nurturing.
5️⃣ Your current business state: Stagnant. Your growth rate has declined (or completely flatlined) because you’re coming close to only replacing the natural churn that exists in your industry. Your reputation is still strong, you have seasoned business development people, your POV still resonates, but you aren’t growing because your current growth model doesn’t have enough scale.
💡 You need the next stage of growth. You need Relationship-Led Growth. This shift in your mindset and business model will allow you to:
👉 Build affinity at scale
👉 Have more inbound conversations
👉 Enable more and better outbound conversations
👉 Better nurture existing relationships with clients, partners, KOLs, etc.
Without Relationship-Led Growth, you are likely experiencing the following:
👎 Plateauing growth rate: Your reputation-led and sales-led motion has taken you as far as it can. You do great work, and your sales team is doing well building 1:1 relationships, but your business has scaled to the point where you are only replacing natural churn.
👎 Constant pivots: You know what you’ve done historically is no longer working, but you seem to be pivoting from one channel, tactic, or strategy to the next without clear growth or ROI to show for it.
👎 Unscalable and unsustainable growth model: You are dumping money into incremental sales staff and resources, and into paid media to generate leads, but the unit economics seem to be getting worse and worse as you scale. The fact that you’re constantly pivoting and not seeing the ROI or positive unit economics is causing you to cycle through marketing and sales resources at a rapid rate. Which in turn only further exacerbates pivots and unfavorable unit economics.
👎 Obsession with short-term results: financial pressures have turned your attention to cost cutting and short-term revenue gains. Which yet again, exacerbates pivots and declining unit economics as you turn more and more to transactional activities in hopes of making immediate topline impact.
How is Relationship-Led Growth different?
The problem with most [fill-in the-blank]-Led Growth strategies is just that—it’s a strategy, not a business solution. But Relationship-Led Growth isn’t a strategy. It’s a go-to-market framework that puts relationships at the center—meaning the execution of any strategy must be based on a relationship-focused mindset:
👉 How is this helping move the relationship forward?
👉 Will this get the person excited about the next step?
👉 What are they skeptical about that is preventing us from taking the next step?
👉 Who’s opinion or input will they look for to move forward?
👉 How can I help them gain consensus on taking the next step?
Community-Led Growth vs Relationship-Led Growth:
Customers build affinity to brands through people, ideas and groups. Community-Led Growth is a strategy in which companies build and nurture communities centered around enthusiastic customers, committed partners and related industry leaders/influencers. A community may also be centered around an idea or theme that supports your business goals.
When done well, these communities add significant value to the brand experience. This helps with customer acquisition, retention and account expansion. It’s a powerful strategy and the tactics of which may very well be part of your RLG implementation, but building a community is only one strategy in building strong revenue-generating relationships.
To adopt a relationship-focused mindset is to understand that customers don’t build relationships directly with a company or a brand. They build affinity to the brand through meaningful interactions with ideas, and relationships with people and groups related to your brand or company (such as employees and customers both past and present, as well as influencers in your industry). So when building relationships at scale, the objective is to develop an idea that resonates, enables and connects with people who relate to that idea, and engage in groups that will understand and support the idea. This builds affinity to your brand.
So while Community-Led Growth generally involves developing a centralized community focused on your industry, category, or business idea, RLG focuses on the entire ecosystem of individuals, and the communities they are a part of. This can include building a community of your own, but doesn’t have to.
Partner-Led Growth vs. Relationship-Led Growth:
Every business, as it matures, develops either formal or informal strategic partnerships to drive revenue. These partnerships can be with either 1.) companies or individuals that are above or below in the supply/value chain; and 2.) companies or individuals that offer adjacent products or services.
These partnerships can take on a variety of models—anything from simple referral partnerships, to co-marketing and co-selling agreements.
While partnership programs can definitely be part of a Relationship-Led approach, the main difference is that RLG really focuses on the individual stakeholders rather than organizations. This means an RLG implementation will focus on building individual relationships with partner organizations.
Additionally, RLG will also heavily focus on building relationships with industry influencers and KOLs in an effort to build more affinity via their audience.
Marketing-Led Growth vs. Relationship-Led Growth:
The Marketing-Led approach has traditionally been one of lead generation. In recent years, a greater focus on demand generation has upended traditional channels like content marketing, SEO, email marketing and paid media (SEM and social). The more modern approach is one of educating and adding value to your customer until they are in buying mode.
The problem is that even with this change, the Marketing-Led approach still focuses on revenue as the primary KPI and traditional revenue-marketing principles.
RLG, on the other hand, focuses on human behavior and follows a predictable relationship journey. This mindset and approach allows you to really focus on building relationships at scale. Because revenue is an outcome of great relationships.
This doesn’t mean that we don’t measure revenue impact. We do. But we also measure things like ICP engagement to understand affinity, and referral revenue and combined LTV (direct revenue + referred business) to understand the strength of the relationship.
Sales-Led Growth vs. Relationship-Led Growth:
Sales-Led Growth is very effective, but it has its limitations: a sales person can only have so many conversations, and manage so many deals at any given time. This means that Sales-Led Growth is linear.
Another critical issue that has plagued sales professionals in recent years is the decreased effectiveness of traditional outbound methods (cold email, cold calling, LinkedIn InMails, to name a few). The traditional sales-led motion has a heavy focus on getting the initial meeting, with the mindset being seller-centric.
But buyers are tired, overwhelmed and inundated with sales and marketing outreach. Inboxes are flooded and most cold emails get ignored or end up in spam. Cold calls are generally ignored or screened by AI assistants. Data shows that getting a response from prospects has become much more difficult.
The problem, again, is in the mindset. Nobody wants to be a prospect. Nobody wants to be hunted. But most people are open to building a relationship and having conversations.
This is why RLG is complementary to a Sales-Led organization. It’s a force multiplier. It allows your sales team to have more and better quality conversations, all while driving affinity at scale. The focus is on creating affinity, and building more paths to conversations, so that when the time comes, your sales person isn’t a random person, but someone who already has some trust built up in the eyes of the prospective buyers, and by extensions, your organization.
Product-Led Growth vs. Relationship-Led Growth:
A product-led approach isn’t really an option for most organizations.
A management consulting firm can’t offer a free trial of its services because of the high resource utilization requirements of the business model.
A heavy machinery manufacturer can’t send you a free million dollar piece of equipment to try, because of all the logistics costs and safety compliance implications.
A contract manufacturer can’t give you a free production run because of all the tooling and setup requirements needed upfront.
But there are some lessons from PLG that can be applied in RLG.
The entire idea of PLG is to focus on the product, have customers try the product for free, and then transition to paid customers.
So how can you implement the “try before you buy” strategy to build relationships? To build trust and help buyers get over their skepticisms?
A management consulting firm can put their people front and center in their marketing, so that familiarity and trust is built with the people who will eventually do the work way before there is work to do. Even before there is a conversation to be had.
A heavy machinery manufacturer can provide equipment videos, customer video testimonials and the necessary technical specs.
A contract manufacturer can provide a virtual tour of the facility as well as product samples.
The point is that PLG concepts traditionally designed for SaaS, can be adapted to build relationships in other industries with a People-First, Relationship-Led mindset.
Based on these concepts, we developed a Relationship-Led Growth Go-To-Market Framework focused on velocity. The faster you help your customers meet their success milestones, the stronger your relationships will be. This means better pipeline velocity, higher retention rate and more customers becoming passionate advocates.
We start by building affinity to your brand, because awareness isn’t enough. You can buy awareness, but you have to earn affinity. The goal is to get your target audience excited. We do this through a variety of owned-media tactics—because if you own the media, you own the narrative and the audience.
Then we leverage that affinity to start conversations with the right people. We do this through a mix of Relationship Enablement™, paid media promotion and content co-creation playbooks.
Last but not least, we take those conversations and nurture them into profitable relationships. At this stage, the focus is on Relationship Enablement™ and providing value outside of the core product or service through education and value-add experiences. Often this gets back to many of the same tactics and media properties that are used to drive affinity.
Ready to make Relationships your business priority and grow revenue?
Reach out to Mike. He loves to talk about this stuff!
Connect with him on LinkedIn.
