Friday, January 20, 2012

Where Are the Service Leaders?

In my last post I mentioned a survey conducted for my previous employer that failed to identify a leader among our competitors in providing great client service. Instead, clients pointed to individuals within those firms who exemplified service excellence. Since then, my search for service leaders in the A/E industry has turned up few exceptions to the norm.

Why? In a hotly competitive business hard hit by a persistent recession, where A/E services are increasingly commoditized, why haven't more firms pursued service excellence as a means to distinguish themselves? Perhaps they're unconvinced that great service is an effective differentiator. The evidence of this is limited but compelling:
  • There's a big gap between A/E firms and their clients in how much importance is assigned to service. Technical practitioners think their expertise sets them apart (80% of time, according to one survey). Clients say the experience (client service) is equally as valuable as the expertise they receive. And they usually fire A/E firms not for technical shortcomings, but poor service.
  • Service excellence is in short supply in our business. In one survey, only 16% of clients gave an "A" score for the service they received from A/E firms. Another survey found that only one-fourth of clients would recommend their primary service providers. I've conducted hundreds of client interviews and would concur that while firms generally get good scores for service, it's rare for a firm to receive excellent scores (e.g., 4.5 out of 5) from most of their clients.
  • Exemplary service delivery produces bottom-line results. We can all agree that people often pay more for great service. Does this apply to our business? Well, don't your most loyal clients--presumably happy with your service--generally provide the highest profits? Data from other professional service sectors supports this conclusion: Those firms providing the best service (determined by meeting certain client-validated criteria) earned 30% higher profits, 35% greater client retention rates, 7-9% higher fees, and 200% faster growth.

So there's a strong argument to be made for becoming a service leader among the clients and markets you serve. How do you get there? I've written a good deal in this space about strategies to improve service and strengthen client relationships. You can search this blog for specific guidance, but let me suggest a few steps that are particularly critical:

Create the vision. The number one reason few firms achieve service excellence is that few explicitly pursue it. Yes, I've seen the corporate values and mission statements posted on walls that espouse devotion to clients. But how many firms have specifically defined what that looks like, how it's done, or how to measure it? How many have expressly committed to being a service leader?

To get started on the road to service excellence, you need a vision, a priority, a charge. You'll not get there without an overriding culture of client focus, as described in my last post. And, of course, you'll need effective leadership to gain everyone's buy-in and follow-through.

Establish a service delivery process. Most firms rely on their client managers and project managers to do the right thing for the client. But rare is the firm that can meet the standard of service excellence depending entirely on individual competency. Would you entrust your technical work products to such a laissez-faire approach? What is the "right thing" anyway?

You need standards; you need consistency. Otherwise service levels will vary across the organization (as is usually true). The larger your firm, the greater the divergence in service levels if you don't have some specific direction. I developed a service delivery process years ago that has worked well for my clients who have applied it. Plus many clients have enthusiastically embraced it.

I recognize that there are many aspects of service excellence that are not addressed in such a process. There is always a human element--interpersonal skills, chemistry, relationship building--that can't be reduced to a step-by-step approach. But a service delivery process can provide a foundation for further development of such personal competencies through training, coaching, and feedback.

Benchmark service expectations. Admitting that very few firms will commit to following my six-step delivery process, let me recommend a shortcut. You should at a minimum do these two things: (1) mutually define expectations and (2) gather regular client feedback. Just doing these two steps will probably distinguish your firm from all your competitors--and spare you unnecessary trouble with your clients.

Benchmarking expectations involves uncovering what the client wants the working relationship to be. In my experience, when an A/E firm fails to provide good service, it's usually rooted in a lack of understanding expectations. Our contracts and work orders outline scope, schedule, and budget, but typically say little about communication, information sharing, decision making, managing changes, or tracking satisfaction. Yet these latter activities go a long way in determining the client's overall experience.

Get regular feedback. Once you've determined what the client really wants, how do you ensure that you're delivering it? I find it amazing that while A/E firms all claim to provide great service, only 20-25% of them collect client feedback to confirm it's true. Just as clients often don't share their expectations unless you ask, they often will not inform you when you fail to meet those expectations. From the many client interviews I've done, I can assure you that many grievances are not shared until asked.

To gather feedback, I advocate a combination of (1) regular client conversations (by a third party; see below) and (2) a formal questionnaire. Some firms rely entirely on using a questionnaire. But in my experience, questionnaires generally provide less insight into what the client's thinking than asking similar questions in conversation. On the other hand, a questionnaire better enables tracking service performance across the firm and over time.

Assign a Client Advocate to every key client. Sometimes it's better for a third party to solicit client feedback or to respond to client concerns. Many clients are reluctant to confront your project managers with problems, especially if the PM is perceived to be part of the problem. I could share many examples of this. So I've long advised that you assign someone other than the PM, preferably someone not directly involved in the project, to work with the client to confirm satisfaction and address concerns.

PMs frequently get distracted with the technical aspects of the work, neglecting the "soft side" of keeping the client happy. They can also become shortsighted, focusing more on the project than the long-term relationship. Your Client Advocate ideally fills that void. His or her job is to make sure that the client is satisfied, both with the expertise and the experience delivered, and that the relationship is nurtured for the long haul.

The above steps, of course, fall short of all that's needed to become a service leader. But together they comprise a strategic beachhead in beginning the pursuit. Do these few things and your firm will already be in rare company.

1 comment:

Angelina said...

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