Monday, January 28, 2013

Are We Clear About Client Service?

Several years ago, the company I worked for decided to add this statement to its core values: "Our top operating commitment is to set the industry standard for service." This begged the question: What then is the current standard?

We hired a consultant to find the answer by surveying a set of existing and prospective clients within our core markets. The responses we got were a bit perplexing. Clients said the two top traits of outstanding service were expertise and quality. Really? Expertise and quality seemed to relate more to the technical work product than client service. 

That survey was my first clue of apparent confusion about what client service is. Clients and service providers alike seem to blur the distinction between service and services. On the other hand, some tend to define client service too narrowly, as a distinct part of the working relationship rather than the whole of it. Let's consider what client service isn't, and what it is, for our business:

Client service is not about more services. I was consulting a regional A/E firm a few years ago that was seemingly committed to making service excellence the centerpiece of its differentiation strategy. They had hired a corporate client service officer, designated a network of client service managers, and enacted several service-related project procedures. 

Yet when I suggested that their market sector leaders include specific client service goals in their annual business plans, none seemed to understand what service was. Goals included cross selling, adding new services, expanding marketing, making strategic hires—even increasing fees. There was nothing about better communication, more responsiveness, improved accessibility, or higher satisfaction scores. 

In various client service workshops I've conducted, participants often seem to equate better service with expanded services. "We need to let our clients know we can do...," is a common response to my question about how to improve service. A new service may well help you serve your client better, but what about providing better service through the work you're already performing?

Client service is not a distinct activity in the scope of serving the client. Conversely, client service is sometimes reduced to just one of many things a firm can do to serve the client. One well-known professional services marketing guru stated in an interview that trying to differentiate your firm based on superior client service is not likely to succeed. Yet when asked in the next question what differentiation strategies work, she immediately pointed to the "client experience." Does not great service create great experiences?

Last week, I wrote about Hinge's excellent report entitled Why Buyers Buy, which was based on a survey of over 400 A/E/C firm clients. One of the surprising findings (for me, at least) was that only 4% of buyers considered good service an important selection factor. Yet other higher-ranked factors (e.g., delivering on promises) would, in my opinion, fit within realm of client service. The survey seemed to set client service apart as a distinct function.

Perhaps this narrow definition of client service is rooted in a product-oriented view of customer service. In a product company, there is typically a customer service department that deals largely with customer questions, complaints, and returns. There are other departments—such as tech support, marketing, sales, finance and accounting—that also contribute to the overall customer experience.

In our business, the delineation between those functions is not so evident. In many cases, the same individuals who deliver the work also sold the work, bill for the work, provide "tech support," and, of course, are responsible for client service. The experience is still derived from the combination of multiple encounters with the firm, but those encounters are usually centered on just a few individuals. In other words, the client experience is a much more personal and relational transaction in professional services—and much more integrated with the work product itself.

Client service is about satisfying clients. Thus my favorite definition of client service is "the sum of all actions involved in satisfying the client." Does this mean that technical delivery is part of client service? In one sense, it is. You can deliver an outstanding technical work product without providing great service. But a client is not going to credit you with great service if your work is of poor quality. So excellent service must include a strong work product.

That's not to suggest that client service is everything you do for the client. It is how you deliver your work, not what you deliver. It focuses on the interactions you have with the client, the interpersonal dimensions of the project. It is the working relationship. It's what the client experiences in working with your firm.

When I survey clients to determine their perceptions of client service, I usually use a questionnaire that explores 12 primary aspects of service:
  • Meeting expectations: Overall, we met your performance and service expectations.
  • Communication: We kept you sufficiently informed of our progress and any new developments.
  • Accessibility: Our people were accessible when you needed them.
  • Dependability: We consistently followed through on our promises to you.
  • Schedule compliance: We met the established deadlines.
  • Responsiveness: Our staff was responsive and flexible in adapting to your needs.
  • Quality: Our work products met anticipated quality standards.
  • Expertise: We provided the range of expertise you needed, resulting in technically sound solutions.
  • Understanding needs: We listened carefully and demonstrated a thorough understanding of your needs.
  • Recovery: When problems arose, we were prompt and effective in responding to them.
  • Innovation: We were able to think out of the box and provide creative solutions to your toughest challenges.
  • Value/cost: We provided good value for the dollar and effectively controlled your costs. 
The veracity of these 12 service factors has been tested in hundreds of client interviews that I've conducted over the last decade. Various studies of client service have used similar criteria. So I'm confident in suggesting that these comprise an extended definition of what client service really is. Excel in these things and you will have satisfied, loyal clients.

    Monday, January 21, 2013

    Understand Your Clients? New Study Casts Doubt

    There have been relatively few client studies done specifically for the A/E industry. So I'm always glad to discover a new one, especially when the results are made available for free. The latest is generously offered by Hinge, a marketing consulting firm that has become one of my go-to resources. I highly recommend that you to download their report: How Buyers Buy for architecture, engineering, and construction services.

    This study has one of the larger sample sizes that I've seen for our industry—438 buyers were surveyed. I mention this because I suspect that small samples have contributed to the contradictory findings in some previous such studies. Hinge made the study even more interesting by adding 84 service providers to the mix, asking them how they thought clients would answer the survey questions.

    By interviewing both groups, the Hinge report illuminates a problem I've written about in this space before—we don't know our clients as well as we should. The report highlights several discrepancies between what buyers say matters most and what sellers think matters most to buyers. Recognizing those differences—what I call the Value Gap—is important to your ability to succeed in both selling to and serving your clients.

    Below is my take on some of the study results that I found most interesting:

    Your firm's reputation is critically important. In one of the starkest differences between the two groups, 81% of buyers said that developing a reputation for delivering results was the best marketing approach, while only 3% of sellers concurred. A good reputation also topped the list of selection factors, with 58% of buyers identifying it as important. A/E/C sellers were closer to the mark in this case, with 51% concurring.

    So how do you sell a good reputation? The study results offer a clue. When asked to rate the reputations of those firms they worked with, 65% of buyers gave them a rating of 9 to 10 (interestingly, less than half of sellers expected clients to give them such a high rating). But when buyers were asked to rate the visibility of those same firms in the marketplace, only 28% gave them a high rating.

    That reinforces the role of marketing in building a strong reputation. Most clients in this survey see the strengths of the firms they work with, but question whether those strengths are evident to other buyers in the marketplace. The best approach to marketing your reputation is not self-promotion, but demonstrating it through content of value to clients (see also this summary of best marketing tactics).

    Sellers underestimate the value wait, overestimate the value of service. This one took me by surprise. When asked by Hinge what factors ultimately swayed the selection, only 4% of buyers indicated good client service. Similarly, only 2% of buyers said that avoiding poor service was an important factor in choosing a firm. A/E/C sellers thought this factor was much more important to clients—38% expected service to be a top selection factor.

    If you've followed this blog for any time, you know that I consider service excellence a great opportunity to differentiate your firm. The Hinge study findings hardly reinforce my point. But I have other evidence to back my conclusion, including interviews about service with hundreds of clients over the last decade. Why the difference? I suspect the lack of a consistent definition of what good service entails in our industry (a topic I plan to address in my next post). 

    For example, buyers said that the two things they most wanted to avoid were broken promises (32%) and working with firms that were just like everybody else (22%). Those both sound like service issues to me. In my experience, when clients are unhappy with A/E firms not doing what they said, it almost always involves service matters rather than technical ones. 

    I also know that firms are much more likely to distinguish themselves in how they serve their clients (i.e., not just like everyone else) than in their technical expertise. And when clients fire their A/E service providers, it is far more likely to be service related than based on technical failure. So I'm sticking to my guns despite the apparently contradictory evidence.

    Another surprise is that a third of buyers thought that service is a critical selection factor. My observation is that A/E firms generally give little emphasis to service in their sales process. I've reviewed hundreds of proposals, for example, and rarely find any substantial reference to client service or the working relationship (the two are synonymous in my mind). Nor is this likely to be discussed in sales calls, other than perhaps throwing out a few empty marketing slogans (e.g., "we really listen to our clients").

    Referrals are the best way to start the sales process, but clients aren't being asked. Hinge found that 62% of buyers learn about new A/E/C service providers through recommendations from friends and colleagues. And 32% indicate that referrals are a best practice for marketing your firm to them. No doubt referrals contribute substantially to your perceived reputation, as highlighted above.

    The good news is that 68% of buyers said they are likely to refer or recommend the firms they work with. But...80% of buyers haven't given referrals because they haven't been asked; only 5% haven't referred because they're unhappy with the firm. See an opportunity?

    Even when clients are fully satisfied with your firm, most don't initiate giving referrals. They wait to be asked, either by you or another buyer. So clearly, learning how to ask for referrals is another high value marketing tactic—and an obvious topic for another future post.

    How Buyers Buy offers many other interesting insights, so check it out. It can help you close the Value Gap between you and your clients. But the best way to understand what your clients are really looking for is to ask them yourself. That sounds like another great resolution for the new year!

    Monday, January 14, 2013

    Serving Clients as a Subcontractor

    Last week I was conducting a workshop on client service, outlining my service delivery process, when the expected question came: "How can we apply this process when usually we're not working directly for the client?" Indeed, this firm normally worked as a subcontractor to design firms and construction contractors.

    "Well, you do work directly for clients," I responded, "but typically they aren't owners." Admittedly, my process was designed with owners in mind. But the principles of client service delivery hardly change because you're in a subcontractor role. They only become a little more complicated. So let me offer some tips for providing great service when your firm is a subcontractor:

    Persuade the prime to invest some time defining the terms of the working relationship. This corresponds to the "benchmarking expectations" step of my service delivery process, and it's no less critical between prime and subcontractor. I have facilitated several partnering sessions for design-build teams, usually where the parties have worked together before. And I'm always impressed with how many new insights we discover.

    Despite the assumption that the parties know each other, going through the process of benchmarking expectations routinely reveals gaps in understanding what they want from each other. For example, most recently I worked with an architectural firm and an MEP firm that had worked together on several big projects. We found that they were not clear on how each other's design process worked, when coordination between the two was most critical, and what specific information was desired on interim deliverables.

    If you find that hard to believe, I challenge you to try it sometime. I have never failed to uncover important gaps in understanding between firms that have been working together. There's nothing magical in my approach; I simply ask questions that have never been asked. I once led a workshop for an engineering firm and their biggest client. The two had worked together for ten years. Yet the engineering firm didn't know their client's greatest source of frustration relative to the projects they'd performed. They hadn't asked the question.

    Of course, if you haven't worked with the prime previously, benchmarking expectations is particularly important. Don't just settle for a contract, scope of work, schedule, and budget. Take steps to define the working relationship—how you'll communicate, roles and responsibilities, critical points of coordination and decision making, what specific deliverables are needed when, etc. You might use my Client Service Planner as a starting point. 

    Give special emphasis to coordination between disciplines. Coordination errors are the most frequent cause of quality problems in our business, and you can't deliver great service with sketchy quality. Interdisciplinary coordination is a challenge in the typical A/E firm, and the challenge escalates between firms working together. It's helpful to map the two firms' design processes, identifying the proper sequencing of work tasks and critical coordination points. Be sure to clarify specifically what information and data need to be exchanged and when.

    If a contractor is the prime, focus shifts to the implementation of the design. In a design-build relationship, the design firm should benefit from getting early input from the builder on constuctability issues and materials costs and availability. But in addition to outlining the working relationship, you should give attention to aligning goals. I've typically found significant differences between designers and builders in how they view a successful project, differences that can strain the relationship and compromise service to the owner. It's best to try to resolve such differences at the start of the project.

    Develop a joint approach to delivering great service to the owner. As subcontractor, you must again rely on your power of persuasion to engage the prime in this effort. But since both parties benefit, you have a good chance of winning at least some support for it. Your advantage may be in proposing a simple, practical approach that has proven to be effective (e.g., the service delivery process referenced above). The prime probably won't have a common process for enhancing service, so having one can give you added leverage in the discussion.

    I would stress two things: (1) benchmarking owner expectations and (2) soliciting periodic feedback on your team's performance. Benchmarking marks the course for exceptional service; feedback allows you to correct course. You can do benchmarking either formally or informally (see link above). In this case you will need to convince both the prime and the owner to engage in the formal process. Without either party's buy-in, you can still benchmark expectations informally by asking critical questions in conversations with the owner.

    By the way, feedback is also important between prime and subcontractor. Be sure to address how you will periodically assess the working relationship during the project. Your success in working together effectively will ultimately determine how well you can serve the owner.

    Tuesday, January 8, 2013

    Dealing With Conflict

    The strength of an organization is the differences found among the people who comprise it. Your firm, office, department, or project team is blessed by the diverse perspectives, skills, and experiences of its members. Your job as leader is to leverage those varied assets for success.

    But alas, these same differences can be problematic. They can inhibit consensus building. They can lead to misunderstandings. They can undermine collaboration. And they can contribute to conflict between people.

    Occasional conflict should be expected in any organization. It's a product of our humanity, and to tell the truth, some measure of conflict—properly managed—can be constructive. But persistent conflict can afflict a company like cancer. It has the capacity to poison the work environment, impede productivity and quality, and promote employee turnover.

    In my almost 40 years in this business, I've weathered my share of conflict. I've had to confront it head on as a manager, HR director, and now consultant. Following are some tips I've learned for dealing effectively with it as a leader:

    Address lingering conflict early. The longer it persists, the more difficult it is to effectively resolve it. This is where my earlier characterization of conflict as cancer is particularly apropos. Left untreated, conflict tends to spread and become more deeply rooted. I've seen relatively minor disagreements grow over time into paralyzing hostility, drawing others into the fray in the process. As a leader, you can't allow conflict to fester in the ranks. Think it's unsavory to stick your nose into it now? It only gets worse.

    Ask questions to diagnose the root of the problem. Conflict often disguises its causes. It may seemingly start as a simple disagreement or personality clash. The parties involved themselves may mischaracterize the nature of their strife. But there are often underlying causes that even participants don't recognize without further investigation. Some common causes of workplace conflict are:
    • Miscommunication
    • Differing perceptions
    • Contrasting values
    • Personality differences
    • Ego
    • Stress
    • Competition
    • Sensitivity/hurt feelings
    • Skills deficit
    • Organizational/work process dysfunction
    Obviously, some root causes are easier to resolve than others. But you will benefit from better understanding what's really behind a conflict in any case. Simply acknowledging the root of the discord is helpful, even if the cause cannot be readily remedied.

    When you're probing for understanding, take care to avoid putting the involved parties on the defensive with your questions. You may well have to confront misbehavior later, but start the process by encouraging open dialogue and diagnosis, without jumping to judgment.

    Focus on the issues, trying to keep emotions under control. Damaging conflict typically is more emotion-driven than issue-driven. People will tell you that it is about this or that matter, but the real problem is how it makes them feel—and consequently how their feelings influence their actions. The root cause may be issue-driven, but the resulting conflict usually is propelled by emotion.

    So you want to try to quell the emotion to begin working on the solution. Set the tone by your own response. Don't let yourself be pulled emotionally into the fracas. Be calm, open-minded, empathetic. If both parties are present, don't let the dialogue escalate into an emotional outburst. You can encourage them to share how the conflict has made them feel, but instruct them to keep the discussion as constructive and unemotional as possible.

    Restrain personal attacks in negotiating a resolution. Nothing intensifies conflict more than letting it get personal. If the fight has warranted your intervention, it probably has already crossed that line. One or both parties has gone beyond attacking opinions or perceptions, to disparaging or demeaning the person holding them. You won't be successful disarming the conflict as long as personal attacks continue.

    Some people don't seem to be able to disagree without being demeaning. This tendency is all too evident in the public square these days—witness the political and cultural debates that routinely stoop to impugning the character and motives of the other side. In resolving conflict, you'll want to set boundaries regarding personal attacks, both by helping the involved parties recognize what behavior crosses the line and intervening when that happens.

    Make resolution the priority rather than winning the argument. In the tug and pull of conflict, both sides are usually focused on coming out on top. But mediating the conflict should be directed more to negotiating a truce than declaring a winner. What if it's clear that one side is right and the other wrong? Don't compromise truth for the sake of resolving conflict; instead work to persuade the erring party about the correct position.

    Try to find a third alternative before settling on a compromise. Many a conflict is resolved through compromise, but that often requires both sides to give some ground on something they believe strongly in. A better choice would be to find another alternative that both can embrace. It's not always possible, but it's certainly worth exploring.

    Seek apologies and forgiveness when appropriate. According to one informal survey of business executives, there's a common sentiment that forgiveness is a philosophical or religious concept that is inappropriate to discuss in the workplace. I respectfully disagree. Offering apology and extending forgiveness are so indispensable for healthy relationships that I cannot imagine why we would want to ignore its value in the context of workplace conflict.

    This is the equivalent of pushing the reset button. You cannot effectively resolve conflict as long as there is lingering resentment. What better way to end hostilities than for both sides to offer a sincere, "I'm sorry; I was wrong. Please forgive me."? Of course, you accomplish little by pushing people to mouth the words. Instead you must convince them, privately, that this is the right thing to do.

    Define practical, achievable corrective actions. Whatever circumstances and actions led to the prolonged conflict should be corrected if possible to prevent recurrence. Plus resolving the conflict usually requires still other specific actions. Determine what steps are needed, working in concert with the affected parties as appropriate, and seek their commitment to do their part going forward. Then monitor and reinforce follow-through.

    By the way, if conflict and discord are relatively common in your organization, you want to examine the reasons why. Organizational culture plays a big role. I've seen firms where managers can argue passionately with each other, even seemingly crossing the line in personalizing the conflict, only to consistently resolve the matter successfully. In such firms, I've found there's usually a strong value for acting in the interest of the whole—in other words, the organization ultimately wins most every argument.

    In other firms, such clashes are rarely constructive because of prevailing individualism and self-interest. What about your firm? Do your people tend to fight for the right reasons? If not, you will be wise to establish ground rules for airing dissent and treating differences with respect. The goal is not to eliminate all conflict, but to harness it for the good of the organization and your employees. Like fire, conflict can burn and destroy, but can also be controlled to generate energy and light.