Tel: +44(0) 1303 862970
www.acstraining.org.uk

Article : 'Client Relationship Management in Construction and Civil Engineering'

In the coming years, it is the intention of many construction and civil engineering companies to establish a position as a main player on national or international markets. Key staff such as Project Managers, Contracts Managers, Site Managers and Quantity Surveyors are being required to be pro-active in their management of the relationship with existing and potential customers at regional, national and international levels, as well as expanding their focus to initiating and managing internal relationships at various levels in order to effectively offer the full-service pallet of products, services, disciplines and r?les that is necessary to compete for larger projects such as PFI newbuild with FM follow on.

The management of procurement and contracts is shifting. Where traditionally the relationship was contractual and often adversarial, the accent is moving to framework and partnering contracts on Design-Build and PFI projects, and the emergence of ECI (early contractor involvement) arrangements currently favoured by public sector clients. Contractors are focussing increasingly on generating repeat business, with some firms achieving this for upwards of 70% of total turnover. Repeat business is often significantly more profitable than new business due to the reduced business development costs, minimal ?run-in? costs, and the ability to focus more quickly and accurately on the needs of a client that you know. The increasing prominence of supply chain management also demands more continuity in the partnerships with suppliers and sub-contractors.

That is to say, the trend is to take the ?r? out of the word contract, and put the emphasis on the human contact as a way of differentiating yourself from the competition. The implication of this is that construction and civil engineering professionals will be required to adapt their strategies to winning and retaining new clients, as well as fulfilling a different role when sitting round the table with external consultants and sub-contractors.

Managing business-processes means managing people-processes. The very root of the word ?management? is the Latin meaning ?hands?. That is to say, we are continuously faced with handling relationships during the respective phases of pre-qualification, bidding and the running of the projects themselves.

Relationship maintenance is much like the maintenance of your car or your central-heating system. Both of these are subject to wear-and-tear, ageing and break-down, and thus to updating and maintenance. Similarly, relationships need the same amount of preventive and corrective attention if we are to gain the full benefits out the relationship, and to ensure that we do so in the future. At the level of the individual manager, Relationship management is about listening to, informing, and negotiating with the client and key stakeholders. At organisational level this information needs to be shared, both vertically and horizontally.

We can define that life-cycle of the client in terms of four distinct phases : prospecting, bidding, customer management and account management. In each phase, the commercial player may deploy a variety of instruments, each with its own set of specific skills.

In the prospecting phase, the manager is seeking to initiate new contacts upon which to build, with a view to pre-qualify for tenders. This means that he must become skillful in the art of following up formal or informal leads ; he must get the most out of ?corporate hospitality? situations such as receptions, dinners, or sporting events ; he needs to be comfortable in presenting his company to others during one-to-one interviews or formal group-presentations, whereby he is able to clarify the identity, products, services, disciplines and market-position of the firm.

In the tendering phase, skill is required at understanding the functional, technical and contractual needs of the client in order to produce a bespoke bid. In a partnering project, the tender phase can involve a number of one-to-one and group meetings and presentations with the client organisation. The individual communication skills can clearly make a difference when it comes to awarding the contract.

In the customer management phase, ie during the project itself, it needs to become second nature to listen to and inform the customer (or the representative of the customer such as the Resident Engineer) on a regular basis, as well as being able to negotiate in situations where the client feels that he is receiving a level of quality that falls short of that which has been agreed (irritations, complaints), or conversely in situations where the manager feels that the client is demanding and expecting a level of service / quality that is over and above that which has been agreed. Similarly, the relationship needs to be managed with external parties such as consulting engineers, suppliers, and sub-contractors.

In the account management phase, we must ensure that a one-off customer becomes a regular client that offers us revenue and continuity in the future on a partnering basis. This is the phase that begins with a thorough close-out, and is followed up by ongoing commercial targeting and relationship maintenance.

Over recent years, technical and commercial staff are getting involved at a much earlier stage, and are therefore in the position to build and maintain relationships with clients and key stakeholders, and to access parts of the client organisation that Business Development cannot reach. By offering these members of staff specific people skills training in the art of managing relationships with all the key players, they can contribute significantly to achieving a successful outcome in the respective phases of pre-qualification, bidding, project management, and generating repeat business.

The modern market has obliged managers in construction and civil engineering to make the step from builder and number cruncher to relationship manager. The client expects a contractor to be represented by a human face ; to feel assured that the contractor understands his needs and concerns ; to experience a high quality and continuity of project management throughout the project. In the jungle of interested parties both within and outside the contractor organisation, relationship management has become a vital tool in exploring, designing and securing our own future.


Adrian Hackford, ACS Training