Many businesses in the world are willing to adopt and embrace new technologies and processes to drive customer engagement and loyalty, while others are hesitant to adopt new methods and processes. When it comes to global business, there’s also a strong push towards being customer-centric, digital and inclusive. These are the same three ideas that guide the practice of ‘guanxi’ (pronounced ‘kwan-shee’), the Chinese word for business connections.
However, the term ‘guanxi’ is often misunderstood or used in an airy-fairy way, which is why we’ve created this guide to explain what it is, its importance in Chinese business and how to cultivate and develop guanxi.
What is guanxi in Chinese business?
Guanxi is a relationship between two or more parties that develop through trust, respect, mutual benefit and collaboration. In Chinese business it can refer to the relationships between companies and between individuals.
One of the core concepts of guanxi is that of “harmony”, which means the relationship between two people or two businesses that is based on trust, respect, mutual benefit and collaboration.
This means that you shouldn’t do anything to harm the relationship between the people you work with or customers, or you will be doing them harm. You might even be harming yourself by doing this.
Furthermore, businesses which are not engaged with their guanxi will likely fall behind in terms of innovation, technology and customer service.
Why is guanxi important in business?
In short, businesses which are ‘connected’ with their customers have an advantage over those which are not. This is because customers are likely to be more loyal, attentive and generous when dealing with brands and services they trust.
Trustworthy partners are also likely to deliver quality service, as they have been chosen with care.
That’s why it’s so important for businesses to develop and maintain strong guanxi with their customers, as without it, customer relationships will suffer.
Furthermore, when customers take the time to write reviews or talk about their experiences on websites like Google or Tripadvisor, businesses can use this as a chance to reflect on their own and improve.
Furthermore, if a business doesn’t have any guanxi, it will likely struggle to grow.
How to build and develop guanxi in business
Develop a culture of gratitude – Chinese business people are known for their warm and genuine hospitality, and it’s no secret that this is a major selling point.
Customers will most likely feel very grateful when dealing with a brand or company that they can trust. This will help to build strong guanxi and will encourage future business relationships.
Have a clear mission – Being clear about what you stand for means that your brand will have a much easier time establishing a strong bond with customers. As a result, you’ll have a much greater chance of achieving success and building long-term relationships with your customers.
Reward good behaviour – Tucked away in the back of a supermarket or in an office building, it’s easy for customers to feel guilty when they don’t buy something that they know they should. Instead of scolding or shunning them, though, try to show your gratitude instead. This will send a much stronger message and will encourage an offender to change their behaviour.
Expose yourself to employees – Employees want to work for brands and organizations that exude power and authority. This means that you can’t keep hiding in your office, but you also can’t be afraid to get close to your employees and introduce yourself, ask questions and let them know what you’re interested in.
This will help to build strong guanxi, as well as create a culture of transparency and communication between teams.
The power of words and examples in business
Businesses which are connected with their customers have an advantage over those which are not, according to this definition. However, businesses which are not connected with their customers won’t likely be able to reap the same benefits as those which are.
To build and maintain guanxi, you need to use your words and active your businesses’ goodwill by engaging with your customers.
Words are powerful, and they can shape perceptions, change habits and open doors to new ideas.
When you use your words, you’re sending a message to your customers that you value them and want to serve them with the best possible service.
By actively engaging with your customers, you’re also sending a message back to them that you’re interested in building long-term relationships.
Conclusion
Guanxi is a relationship between two or more parties that develops through trust, respect, mutual benefit and collaboration.
In Chinese business, guanxi is the base of the relationship between companies and between individuals.
When you know how to cultivate and develop guanxi, you can better serve your customers and grow your business .
To grow your business, you need to be connected with your customers. This means that you have to know how to cultivate and develop guanxi.
