What is more important? Relation or good technical background in sales cycle ?

Both are important,but good relations with descision makers and customers comes first.  Good relations  would  be essential for  building mutual  trust. After that good tecnical knowldge would  enhance the trust cycle and would help in building and maintaing a long term business relatioship.

Product knowlege is important which works as an enabler in relationship building by sharing knowledge.

BOTH ARE MUCH NEEDED BUT I WILL VOTE TO RELATIONS.............

Relations hands down 

i have seen people with awesome technical knowhow struggling to close deals .

and  I have seen many sales  professional closing deals on just plain relationship management skills