Applications Services Blog
Get the latest thought leadership and information about the role of Applications Services in an increasingly interconnected world at the HP Blog Hub.

Focus on Fundamentals (#23) – Relationship Management, NOT Customer Management

plant.jpgBy: James (Jim) R. Hughes, Global Business Analysis Capability Leader, Hewlett Packard Company

 

Author’s note: The Focus on Fundamentals blog series addresses the challenges that limit applications solution delivery success.

 

 

What are the factors required for creating and maintaining good customer relations? If you read best-practice tips you will find items such as the following:

 

  • Make regular calls to your customer. I get regular calls from my customer representative at my bank. To be honest, I wish she wouldn’t call just to see how I am doing and to ‘check in’.
  • Keep your customer informed. It is clearly a good idea to communicate regularly and address issues immediately. It is also not a good idea to spring surprises on your customer. At the same time, you don’t necessarily want to expose all your internal challenges. You may only raise your customer’s stress level.
  • Listen to your customer. Some people would infer from this that we are to understand what the customer wants and deliver only that, because the ‘customer is always right’. Others would say that after we listen we should become the customer’s trusted advisor and offer guidance and direction.
  • Add value. What exactly does this mean? Upsell customers on services or products that they hadn’t realized they needed? Or, help them devise better ways to be productive, even if that means selling less of your services or products?
  • Be careful what you promise. It is often suggested that instead of over-promising and failing to meet commitments you should keep expectations low by under promising and over delivering—e.g., deliver early or provide enhanced functionality at no additional cost. However, will the customer catch on and expect more the next time?

 

These are basically good things to do when dealing with people in almost any setting. However, there is a fundamental problem underlying all of these tips—they assume that customer relationship management is one way. That is, you as a supplier of services or products have to be careful to manage your customer with the proverbial ‘kid gloves’. As a result, engagements are often characterized by the following:

  • They start on a high note with a cooperative spirit but often deteriorate to where customers are unhappy with their suppliers.
  • Suppliers are often afraid to say ‘no’ to their customers because they don’t want to jeopardize the relationship. They often fall into the trap of allowing ‘scope creep’ by giving away services or product. This inevitably ends up causing schedule delays and budget overruns.
  • Customers generally become suspicious and think that every suppler is out to bilk them. They believe that suppliers seek opportunities to take advantage of them (particularly when the supplier initiates an “upsell” conversation).

 

The focus should not be on managing customer relationships. The problem with this approach is that it views customers as passive—almost like plants that need watering and pruning in order to produce fruit. Since the road runs in both directions, a better approach is to foster bi-directional relationship management. Like a marriage, customer-supplier relationships need to be managed as a partnership—talking with rather than talking at.

 

The key relationship management principles are:

  1. Candor. Both parties must be scrupulously honest. This includes not making any promises they can’t keep, or don’t intend to keep. For example, if the supplier promises a delivery date it must be a one that he can really meet. Or, if the customer agrees to supply subject matter experts with domain knowledge, he must really be able to make them available when they are needed.
  2. Consistency. Strong relationships are ultimately cemented and sustained by both parties fulfilling their commitments. It is important that every promise be fulfilled 100% and that no excuses are made for failure to meet the commitments. For example, if the suppler agrees to include specific documentation, such as a traceability matrix, it must be present when the release is installed. Or, if the customer agrees to complete acceptance testing within five days, he must do it.
  3. Consideration. Both parties have objectives for the relationship. For example, the customer may need services or products to support a major marketing campaign. However, the supplier expects to make a reasonable profit. Neither party can take the other for granted. Both need to work at developing a mutual respect.
  4. Courtesy. Common courtesy may seem simplistic, but suppliers should not treat their customers paternalistically or with condescension, and customers should not approach issues with their suppliers with antagonism.
  5. Communication. Both parties need to initiate and sustain communication. The supplier should not feel obligated to make a weekly call to ‘touch base’. Conversely, the customer should keep the suppler informed of internal changes that could change delivery requirements—suppliers can become jaded if they are subjected to the ‘hurry up and wait’ syndrome. Regularly scheduled meetings between the two facilitate communication.
  6. Cooperation. Working together to achieve a shared vision is essential. All goals, strategies, plans, and schedules should be mutually developed. Risks and rewards should be shared. Both parties need the other for success.
  7. Compromise. It is important that both parties be willing to make trade-offs—something that both can live with—and ensure that the costs/benefits for each party are kept reasonably balanced. Drawing hard lines to get every ounce out of the other party will lead to anger and litigation.
  8. Commitment. Both parties need to commit to successful completion of the engagement. For example, the vendor should not use a bait-and-switch approach when assigning resources and the customer should not allow internal reorganizations to derail a project. Careful succession planning on the part of both parties is key for sustaining long-term relationships.

 

Relationship management is dependent on both earned trust and delivered value. Trust is earned by fulfilling commitments. Value is perceived by what each party gets out of the relationship. If either party is not building trust or delivering value, a mutually beneficial relationship cannot be created and sustained.

 

Previous Focus on Fundamental blogs by Jim Hughes:

 

Previous blogs in the Producing Quality Software series by Jim Hughes

 

Other blogs by Jim Hughes:

 

About the Author

 

Jim-150X210.jpgJames (Jim) R. Hughes, Global Strategic Capability Leader, Hewlett Packard Company

Jim has been with HP for 33 years and currently leads a global Strategic Capabilities Management team, with a specific focus on Business Analysis and Configuration Management. Jim also manages a team within the US State, Local, and Education division of HP. He was a member of the IIBA committee that created a Business Analyst Competency Model and he participated in the development of IEEE standards. Jim graduated from Harvard University, the University of British Columbia, and Ottawa Theological Hall. He currently lives in Toronto, Canada.

Leave a Comment

We encourage you to share your comments on this post. Comments are moderated and will be reviewed
and posted as promptly as possible during regular business hours

To ensure your comment is published, be sure to follow the community guidelines.

Be sure to enter a unique name. You can't reuse a name that's already in use.
Be sure to enter a unique email address. You can't reuse an email address that's already in use.
Type the characters you see in the picture above.Type the words you hear.
Search
About the Author
Jim has been with HP for 33 years and currently leads a global Strategic Capabilities Management team, with a specific focus on Business Ana...


Follow Us
The opinions expressed above are the personal opinions of the authors, not of HP. By using this site, you accept the Terms of Use and Rules of Participation