Client Relationship Management: The "Cost Value" Dilemma
Holly Lochinger | MyFM “Anthony, thank you so much for speaking with us today. Can we start by me asking; Are you able to give an example of the worst-case scenario where client relationship management had broken down?"
Anthony Murphy “I would say one of the more recent Public Sector arrangements that I had led. Overall, it wasn’t in a good place and was suffering the ongoing effects of a challenging mobilisation and disjointed transition. The initial approach to leading the account had not been well thought through, which led to other compounding difficulties and a strained relationship with customers and senior stakeholders.
This had negatively impacted on virtually every area of performance along with a team that were continually changing direction whilst the chased the next escalation or urgent issue. There was a clear lack of strategy, direction or prioritisation, which increased escalations and a culture of “just chase the ball”. This was a cycle that needed to be broken through the introduction of robust governance, CRM and Strategy.
Whilst I could see minor changes and increased levels of trust and confidence, one of the first bits of feedback that I got from a senior stakeholder was “For the first time, no means no and yes means yes”. And that was something they’d not been accustomed to before”. The answer unfortunately can’t always be “yes”.
Holly Lochinger | MyFM “And what in this instance, had to be said no to?”
Anthony Murphy “There was a location in London that had been heavily defaced by protestors and the outside of that building needed to be extensively cleaned and if not redecorated. Being on a pavement in Westminster, you can't just start working on it without appropriate authorisation, despite the importance and pressure to “get it done”.
The pressure was immense because an important building had been defaced with fluorescent paint. Although, I wasn't prepared to put myself or my team in a position where we were going to start working on a pavement during the day without the correct kind of documentation and approvals in place.
This created quite a bit of an angst but we needed to push back. There were things that needed to be in place to safeguard our own business and team as well.
Having that conversation and giving your team the strength to be able to push back is a key "fundamental”. The team know you'll hold fast when the pressure is on by stepping into the firing line, should it be needed, and this creates confidence.
Holly Lochinger | MyFM “Why do you think it becomes the normal approach for a lot of CRM's to “kill with kindness?” Where does that come from? Because with contracts, boundaries are usually established at the beginning, aren’t they?”
Anthony Murphy “I think it's linked to wanting to be liked. I have seen a lot of instances where the relationship is influenced by whether you like the client, or the client likes you. We all want to like people and get along, but a professional relationship doesn’t need to be determined by “like”. I am fortunate as whilst its always preferable to have that personal link, it also can’t be the make or break of a professional relationship. I see myself objectively as here to do a job first and foremost.
It can also be through a lack of personal self-resilience to step up to the plate and say “No, we can't do that and to have what might feel like an awkward or difficult conversation” or somebody probably doesn't have the confidence, experience, or the strength of character to have that conversation. It could also be that they think it's a good strategy and believe the concept of “the customers’ always right”. People forget that you can have a good relationship and not always see eye-to-eye.
I think the customer might believe they're right - that doesn't necessarily mean they are though. When you employ people within our industry, my belief is the customer has made a recognition “FM isn't a strength of ours, so therefore we're outsourcing. We're employing you and I need you to be my subject matter expert”. This I believe is the difference between “out-sourcing” and “out-tasking”.
Holly Lochinger | MyFM “I'd imagine another factor with the kindness aspect is if they're considered a “VIP client”, and there’s a fear of “What will happen if we say no to the wrong person?”
Anthony Murphy “Yes, there was an element of that as well because they were senior civil servants we were dealing with.
Sometimes when you've had the conversation, you reflect and think “I may have overstepped the mark there”. I've said to my wife on a number of occasions how I've had to have such conversations whilst thinking “ I’m not sure if I'll have a job in the morning”.
Because the pressure to give in is immense but I still believe you've got to have that strength of character to stand by what you believe to be correct as ultimately, that's what the client is paying me for.
With this level of expertise and knowledge, I'm looking ultimately to keep them safe as much as me because any actions we take could bring their name and brand into disrepute as well”.
Holly Lochinger | MyFM “And also long term, if you're not managing expectations then one, they're going to be disappointed or two, the work done is going to lead to even more problems for them”.
Anthony Murphy “Yes and that's the difference between a want and a need. Sometimes what they want is the last thing they need and I've worked with other organisations who have a similar public profile and the customers' brand or reputation needs to always be considered.
The last thing they need is to be in the papers for the wrong reason. We, for instance, could have been out there during the day working on the pavement. And it becomes a prime new story; “Look at the this official body breaking the law”, effectively because the right processes and procedures haven’t been followed in order for us to be out there working. Its easy to find yourself “news-worthy".
We need to remember that everything we do is continually under scrutiny. You may think a behaviour or conduct is innocuous, but to others its far from that or it’s an ideal opportunity for an article. I’ve known of other instances where people going about their day-to-day activities made it onto the local radio, because someone saw something they weren’t happy with.
Those are opportunities that other people will take to publicise the negative and it's just looking at that need assessment correctly and saying “I’m acting in your interest here”.
Holly Lochinger | MyFM “So how did you help a client establish the difference between wants and needs, and how would you go about swaying them so that the needs are prioritised and put to the forefront without losing your job or upsetting people?”
Anthony Murphy “It's very much a case of going through just a methodical process in terms of understanding the wants. For instance, within our industry is a customer who might want to see a cost reduction within the service delivery, so they might be facing an internal cost challenge and therefore passing that down to the customer, down to the supplier. I had this happen with a major manufacturer and supplier to the aviation industry.
An opportunity to reduce cost was within the pest control service. I said, “You're already quite low and if you take it any lower, its’ going to encounter more problems”. We were instructed to do it nonetheless and we did do it.
Now you could walk away from it at that point and say “Well, that's the customer's prerogative. They'll live with the outcome”. After three months of reducing the service they wanted to see this cost reduced, which they clearly achieved.
But the reactive costs over those three months had peaked to a point where it was more than the annual cost of the preventative service. The cost popped up elsewhere. So it was playing that back in a very delicate, tentative way of saying “I know you've asked us to do this and we've done it. We've made that change and you've saved that money. But on the flip side of that, what you've actually done is increased the cost in another area which wipes out any potential saving”.
“The need was to reduce costs, but we've not met that need because it's costing them more money than it did originally. The instruction then that soon followed was to quickly put it back to a preventative type of service which is what we did.
It's having that ability to understand what their challenges clearly cost. They're looking for easy opportunities to reduce the operating costs but they’ve got to be sustainable”. These are what I call “notional savings”. In other words, you make the reduction, save the money, but fail to measure the cost impact of the change.
Holly Lochinger | MyFM “What was the comeback when you had that conversation with them and presented the outcome?”
Anthony Murphy “It was a bad reaction and I remember the guy I was sat in front of. When he saw the impact and information his initial reaction was “So why the hell did you do it?”
I responded “Because you were resolute and instructed us to do it. We had the conversation, and you were still adamant, so we did it. But I'm here now, sat in front of you, telling you the outcome of the decision”.
In ISS we used what we called the “NOSE”, which was “Needs, Opportunities, Solutions and Evidence. If you follow that process in developing robust value propositions it'll prove whether it's a good decision or not. I'm still dealing with scenarios today where customers are reducing service in the name of cost cutting, but they're not truly evaluating the true cost impact”.
Holly Lochinger | MyFM “How did you manage to calm the client down and move on from that? What happened?”
Anthony Murphy “I showed there was a way back. You've got to engineer a back door into every scenario by saying “This is not irretrievable, and we can get this back under control and put the services back in. We can continue then to look at other opportunities”. But part of this as well is the education of the client. This is where trust is built. Trust in your ability as their provider and trust that you have them covered.
Hopefully they will start to learn that principle for themselves and look beyond the obvious, and that's what you're trying to do. So there's an element of "educating your client as you go” and hopefully moving forward you become more involved in the solution and not just the outcome.
Holly Lochinger | MyFM “As in sell them what they want, and then give them what they need? That’s the reality of it, if they want long term results right?”
Anthony Murphy “I've used that principle in leadership of many teams over the years. I always encourage the same approach of saying to my team “we are in the solutions business” our ultimate aim is to give the client a quiet, easy life; take problems away from them and solve those problems.
I had a very good guy who worked for me in Edinburgh who came from managing prestigious hotels, he called it “service with anticipation”. In other words, anticipate the need before the customer even realises, they need it. I’ve always remembered this.
That's where the client sees there's a benefit to you being around. You know they're facing challenges and that's how you work in partnership with them to help them with the problems they've got. And the more you can do that, the stronger the relationship”.
Holly Lochinger | MyFM “How in this instance, were you able to find a balance between the cost versus value? How did you minimise the cost gradually but also maintain the value that was being provided?”
Anthony Murphy “It goes back to investment and that partnership approach in terms of knowing there’s an opportunity for both parties to invest. So, in this example there was technology on the marketplace in that time that you could still have a preventative service, but it was very much tailored to usage.
We followed a similar approach on another contract many years ago with Network Rail. They had countless amounts of manned reception areas up and down the country with security guard cover over a weekend just sitting at a desk. All day Saturday, all day Sunday, until we challenged it with “Why do you have this? This is a sleepy backwater and there's nothing of importance in this office”. The need was one of a prior era when it was very much needed.
Long story short, we then looked at technology, and introduced cameras with movement detection combined with alarm systems. So again, with a bit of technology you can remove that continual long term cost of a guard sitting there, which was usually counterproductive because invariably they weren’t providing the level of assurance for which they were employed.
It was working with the client to do that cost versus value analysis and demonstrate that whilst there will be an initial outlay, you'll get the investment back and there won’t be an increased risk or reduction in your threat detection”.
Holly Lochinger | MyFM “And it demonstrates integrity as well, because as you said, some people literally just do the job that’s been given to them and not look beyond that by saying, well now XYZ’s cropped up, it's going to inflate costs”.
Anthony Murphy “Yes it does show integrity and going back to the Public Sector piece as well, initially we did minimal projects for them but there was a big project opportunity. Although we had to build capability, intelligence, knowledge, and trust for them to give us that work.
From a conversation with a senior stakeholder, I said “one of your ultimate needs is that your facilities need to be available and presentable”. They need to represent your organisation to whoever you're hosting. They also need to have certain levels of security and protection because of the type of people within these buildings. And we got to that point where we developed that trust and that ongoing review process.
The stakeholder could see I was looking at their needs through their eyes and interpreting these needs leads to a stronger relationship and opportunities.
Holly Lochinger | MyFM “That's the catch with honesty, isn't it? When people say “Be honest”, what they really mean is just tell me what I want to hear” but honesty is both sides of the coin, isn't it?”
Anthony Murphy “I've had that situation where somebody said they wanted to maintain “plausible deniability”, which means “As your client, can you please not tell me certain things” and I was really perplexed by that, which is another tricky situation that needs to be managed.
If the chips are down, you need to remember that ultimately you could be called into question along with the company you’re working for. Acting with integrity is something that will be tested by certain situations.. In saying “don’t tell me certain things”, implies to me that they want to retain the option of denying all knowledge of the situation. “They knew and they never told me, could then be a tricky situation”.
Holly Lochinger | MyFM “On a scale of 1 to 10, how many Client Relationship Managers would you say are going along with that?”
Anthony Murphy “I'd say probably a high number for several reasons; they’re not really invested within their own business and just think “Well, this is going to backfire, but I'll do it anyway” or they don't have the ability to actually have that conversation and truly evaluate the likely consequences .
Maybe they don’t have the skills to understand the necessities of what they've been asked to do and thinking beyond. I've always encouraged the “what if” approach to a rationale. It’s having the ability and experience by being trained to have those conversations asking, “Are they doing what they’ve been asked to do properly or are they just executing an instruction?” An unintended outcome can bring a level of gravity to a situation, request, or instruction. In joinery terms; “measure twice and cut once”.
Holly Lochinger | MyFM “It can't be very fulfilling for someone who’s in that line of work, if they’re biting their tongue because they’ve simply become a “yes man”.
Anthony Murphy “You're right, you give a proportion of yourself away each time you do this as well when you don’t or can’t act in a way you see as correct or in line with your values, skills, and experience. You know your own integrity and knowledge. None of us get satisfaction out of getting things wrong. My team do not come into work every day to get things wrong but part of what was driving that was the culture; “Just do as I say, not as I do”. This is very much a master and servant type arrangement”.
Holly Lochinger | MyFM “What would you say to a client who's under a lot of pressure to get things done and they're getting that weight put on them internally? How would you advise them to be that middleman, similar to yourself, between two parties?”
Anthony Murphy “To be truly transparent there comes an element of vulnerability and it could be that the client says look, “This is what I've been asked to do but I don't know how to do it or meet that goal”.
As long as there’s trust and confidence that they’re not going to be ridiculed or taken advantage of, you'd like to think they'd share the “why” as much as the “what”.
Another fundamental piece of advice is providing the whole picture. Considerations get censored and ruled out or not considered when it could be the one thing that works. Work collaboratively and explore all options, not just the obvious ones. I’ve done some great work over the years around exploring options creatively and to avoid jumping into solutions mode. Sometimes, pressure and demands offer no other option, but where you can take the time, take it.
Have that ability to be vulnerable and to be a bit uncomfortable in the situation, but be truly transparent on what it is that you've been asked to achieve and why you've been asked to achieve it. If you understand the “why”, it might be there's another way to achieving the outcome.
Go into it, open minded. Some of these clients have already conceived the solution and they're coming at you like a laser but if you understood a lot of the background, you could diagnose a different solution”.
Holly Lochinger | MyFM “And there might be an even better way that hasn't even been considered, but it's an obvious option that’s a lot more feasible?”
Anthony Murphy “Yes and that initial phase - one of the challenges is the time constraint element. People knee jerk and they simply do it. And then the whole thing explodes in everybody's face, but not if you afford the time at the outset, to have that conversation, paint the broadest pictures, understand all of the elements, the reasons why you know and then you'll develop a much more robust, sustainable solution.
That will strengthen the relationship as well”. I know time and pressure command a reaction, but sometimes to slow down leads to speeding up.
Holly Lochinger | MyFM "For our readers who do work with CRM's - what are the signs that they don't care and they're just there for the money?”
Anthony Murphy “They have a tendency to give a lot of ground. I've had that feedback personally where teams have said to me “You're the first person we've seen to say no”.
I think giving too much ground is an absolute symptom of where I considered the contract to be client led and not service provider or collaboratively led. To some this may be known as "scope creep".
The other symptom of a poor CRM is also somebody who’s exhibiting personal problems themselves. Be that health, welfare or actually just self-resilience. Continual capitulation or a situation that dictates this is not healthy. The secondary is that you get a highly demoralised team through following ill-fated instructions.
One of my more recent teams were brow beaten. They didn't have an identity or feel a sense of pride in what they did because they, too, pride themselves on their knowledge and experience. Their attitude was simply “Well, we've been told to do it”.
Giving people the skills and ability to push back, challenge and have the confidence to do so invariably comes from the top. They need to see it in action and that it’s not necessarily a bad thing and that challenge in the correct way is healthy for all parties.
Holly Lochinger | MyFM “And that’s why time and money is wasted going back and forth. No one has any clarity over what's really happening”.
Anthony Murphy “Exactly. And it flows right through the whole contract. It permeates through everything, no objectives, no structure, no direction, no real attainment because we're constantly chasing different things. And they are very much symptomatic of somebody who's not managing that client relationship very well”.
Holly Lochinger | MyFM “We all want to feel like we're making a positive contribution. So without that, there's not really any incentive to do much of any good is there?”
Anthony Murphy “No, there isn't. You can tell from a team’s decision making. I took on a team and I just couldn't believe that people were coming to me for the most basic requests. Whilst this can align to culture or a specific leadership style they don't seem to have that confidence to make decisions or fear the result of mistakes even. It's a part of that toxic, unfortunate situation.
You see that with high turnover or low morale and motivation. I tried to strive to introduce a culture where its appreciated that everybody has bad days, but you shouldn't have continually bad days. Know your boundaries, what decisions can I take and most of all, make mistakes, just don’t make the same mistakes. Fear of trying is the nemesis of creativity".
Holly Lochinger | MyFM “Anthony, thank you so much for your time. Are there any final thoughts you'd like to add?"
Anthony Murphy “The one thing, I’d say is to truly believe that there can be a more holistic way that both parties through good client relationship management can have their needs met. It doesn't need to be master and servant. Just making margin at any expense or the customer just getting their needs met regardless of the outcome doesn’t bode for healthy relations.
It needs both parties to invest in the relationship in order to get that right. We focus so heavily on contracts and nowhere in the contract does it generally outline how we will conduct business, how will we relate to each other, and maintain an understanding that both customer and service provider can achieve their aims.
Whilst there can’t always be a clear distinction between who wins and who loses, overall both parties need to feel valued and see that value in the relationship. This isn’t text-book or “blue-sky” thinking, but years of experience in both effective and ineffective relationships".
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