Monday, April 13, 2009

Build Relationships on Principle, Not as Strategy

If your firm is among the enlightened ones, no doubt you've been talking about the importance of pursuing client relationships rather than merely projects. The latter is a common trap in our business. Technical professionals are usually more adept at sizing a pump or footing than sizing up a client's personal peculiarities. There's a natural preference for the objective and predictable over the subjective and whimsical.

Yet the strategic value of long-term client relationships is impossible to ignore. A/E firms have long boasted of their repeat business rate. We understand that the most profitable and enjoyable work tends to come from our most enduring relationships. These clients provide the stable revenue base we need, enable us to stretch into new service areas, reduce our business development costs, and, well, they make us feel appreciated.

So if such relationships yield strategic value, it's not surprising that our pursuit of them becomes our strategy. We target prized potential clients. We train our staff in the skills of relationship-based selling. We write capture plans. We scan the business aisle of the local bookstore for more how-to wisdom on building great customer relationships.

But for all the talk about relationships, we're really not all that good at them--for the most part. I've cited the evidence in this space before: Two-thirds of A/E firm clients are open to switching from their current primary providers. Only one in four would recommend their primary provider to another client. Only 16% give their providers an A grade for service. Two-thirds who dump their A/E service provider do so because of perceived indifference.

Why do we struggle so much with relationships? We've all heard the common excuse: "Well, technically oriented people tend to lack basic interpersonal skills. They're just not people people." I don't think I buy that. Sure, the shortcomings are apparent, but are they inherent? Is it aptitude or attitude? Or might misplaced strategy be part of the problem?

When we pursue relationships predominantly for our own benefit, we're missing the most important ingredient: Mutual trust based upon mutual concern. Genuine caring for others is hard to fake, and phony concern compromises trust. That's the problem I have with most relationship-based sales tactics I've read about. They're motivated by self-interest, not sincere interest in the client. And most clients see through the facade.

Thus the truly enlightened firms pursue relationships on principle, not as strategy. They seek out new clients because they see opportunities to help, not primarily to help themselves. They listen because they want to understand client needs, not because it's the path to closing the sale. They find rewards in the relationships themselves, not just in the revenues they generate.

Relationships by strategy typically focus on our needs, and there are some A/E firms truly in need these days. But relationships built on principle transcend self-interest--and a recession--and focus on the client. It's grounded in a confidence that doing business the right way will bring the success we desire. But that success must be the outcome, not the object, of our business. Getting there requires a step of faith. But it's not an uncharted course; some of the very best firms have already walked the talk.

So what about your firm?

3 comments:

John Poole said...

I thinkg AEC professionals have the interpersonal skill but it is not taught in school or encouraged in organization. We're a hard-nosed fist pounding group. We need to ease these softer skills in and it could easily begin with universities.

Tim Klabunde said...

Mel-
You are right on with this post. Relationships thrive when two people are constantly looking for ways to help one another. By selflessly focusing on someone else we succeed as they return the favor. Again, great post!
Tim

Mel said...

Thanks guys; I really appreciate your feedback! John, agree we could do a better job in our universities preparing technical professionals for the real world. But we also have the chance to train and mentor them in our companies. And I can't think of a firm that does that in any structured, consistent way. Another golden opportunity for firms looking for a competitive edge.
Mel