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Client Experience & Development... spotlight
11 August 2021
Two of our Construction & Built Environment Sector team, Peter Jubb and Norman Taylor, have both been in business ownership and client management roles throughout their tenure, particularly in Architecture & Design and Construction. And, as we all know, engagement and relationship management’s just as important as carrying out the work itself. It’s all about understanding the job at hand, the client’s long term goals and planning these together. So, in this spotlight piece, we ask them the key elements to a successful relationship from different perspectives.
We’ve spent the vast amount of our careers in client facing roles. How have you seen these roles change over the years in the sector?
Peter – The way client facing roles are performed and the skills needed to do so, have changed significantly over the last few years, and the pace of change continues to accelerate.
Things have shifted from a sales led approach where clients were persuaded (or not) of the features and benefits of the product or service offered, to a more strategic, Insight based approach, based on gathering much more data on the client’s business plans, market sectors and the impacts of external factors such as climate change.
Those in client facing roles must be much more adept at understanding what clients need, not just what they think they want and adopting a problem-solving based mindset to give them the best value propositions.
The ability to interface account-based marketing skills (outbound) and digital marketing campaigns(inbound) is key, in reaching out to the clients you aspire to work and forming excellent relationships
Norman – Many Architects and other professionals have adapted their approach to their client facing roles as the market’s changed over time. Client loyalty’s no longer a given and requires a focused effort to maintain. It’s noticeable that as senior roles in organisations are taken up by younger people, they rely less on long term relationships and more on the ability of Architects to respond to things such as MMC and BIM. Therefore, more focused engagement with clients is needed to ensure they’re aware of your evolving expertise.
CRM’s been particularly challenging over the past year where the industry’s had to adopt different ways of communicating with clients. Using Zoom and Teams offers an opportunity keep in touch with more clients on a regular basis and it’s here to stay. Having said that, there’s no replacement for face to face meetings and should be a regular feature of developing Client relationships.
I remember being on a leadership course many years ago where it was quoted that only 30% of client relationships are based on an assumed level of technical competence with 70% being on the ‘softer skills’ like communication, problem solving, empathy etc. That really stuck with me… How well are these softer skills in abundance in the construction and built environment sector?
Peter – There’s an improving landscape in terms of softer skills training, but one of the challenges is that these are being retro-fitted into people who are already well into their career cycle.
There’s also an issue with the piecemeal nature of how softer skills training’s delivered, rather than a real examination of what people need and how that applies to their businesses.
This was why I created the Rising Stars Programme with Terry O’Mahony, CEO of the Construction Leaders Club 5 years ago to address this problem and provide construction professionals with an opportunity to acquire business, leadership, emotional intelligence, relationship building and communication skills.
The softer skills, also have to be applied in the context of an organisations business model and personality/brand; these are key features of Fortus’ new business development and marketing audit service, where we aim to provide clients with greater clarity and direction.
Norman – Architects generally have a well-developed “soft skills set ” by the nature of their work and have the communication skills needed when presenting design concepts and projects. However, this generally sits with more senior people in a practice. Soft skills need to be developed to all levels in a practice as this determines the culture and perception of the business.
The ability to convince a client that he can entrust his project with you is often key to getting appointed and, within certain sectors, can be the deciding factor over fee level.
The service you provide as an Architect is about time, quality and cost but those alone will not make a satisfied client. Relationship Management’s the key and can pay dividends; focusing on understanding your client, creating the right impression, taking responsibility and having a client focused approach.
At Fortus, we started to implement a Key Account Management strategy a few years ago which has an ultimate purpose to develop stronger long-term, mutually beneficial relationships with specific clients in order to meet strategic goals and optimise value for all. Whilst this is long term, we’ve seen some tangible benefits already. It’s not a widely adopted practice in our space; is it so in the construction and built environment sector and should there be more focus on this?
Peter – In truth, I haven’t seen many companies apply what I would call a ‘true’ key account management approach to their client base.
A large number of SME companies in construction professional services are still getting to grips with producing a proper marketing plan or embedding a CRM system. To create a really good key account system you need to decide the criteria for a client being a key account in the first place; this could be based on the following:
- Turnover and profit data on clients and sectors
- Clients who fit your values
- Clients who can provide you with pipeline longevity
- Clients who champion value over price
Customer Journey Planning/market research/strategic planning meetings are foundational parts of creating and maintaining a resilient and agile key account process.
There is no doubt that a properly conceived KAM system could provide construction organisations with better results, by being more forensic in their approach.
Norman – The use of true Key Account Management systems isn’t commonplace within Architectural firms. This partly a cultural thing and is also because of the perceived commitment needed.
From my experience, they can be hugely beneficial and there should be a greater focus on this. It enables a business to be objective about how their skills and experience fits with a particular client type and sector as it’s easy to fall into the trap of aspiring to work for a client or within a sector because of the perceived kudos it will bring.
Many clients do want to see that an Architect has similar sector experience. If an Architect’s particularly skilled at selling his practices approach, he may be successful. If you don’t have this ability or experience, then consider making strategic appointments to meet your objectives. Always appoint the best people you can afford and have acknowledged expertise.
We know the sector has a reputation for being guilty of falling into the ‘race to the bottom’ trap and focusing selection decisions too much on price which often undervalues the importance of developing relationships. How prevalent is this practice currently and what needs to change to improve this?
Peter – This practice is all too prevalent, both in the public and private sectors. Even after the ‘Egan and Latham reports’ in the 90’s, the industry’s regressed to a lens focused on the lowest price, believing this to be best value, which it isn’t.
In the public sector for instance, what’s the justification for framework mini competitions when you’ve already pre-qualified for inclusion? If the procurement process doesn’t allow value to be recognised properly at the expense of price, this is a real issue for those who want to demonstrate it. There are some encouraging signs on the horizon, including the Construction Innovation Hub’s ‘Procurement Value Toolkit’ where clients are being asked to consider more value-based selection.
Construction professionals also need to work harder to make their value more visible and relevant to client’s problems, which at Fortus, is addressed within their business development and marketing audit process.
Norman – Sadly “lowest price wins” is still the predominant culture in our industry and in particular Contracting where margins of 1.5% aren’t uncommon.
Architects and Designers who have developed a particular expertise or reputation can command good fee levels, as can Architects with a strong brand. In some sectors, where expertise is held with a few Architects, fees are reasonable. Some sectors, such as housing and retail, have a culture of low fees and high expectations.
So what can be done to combat the “race to the bottom”. In reality, very little, as fee bidding’s a competitive process and one of the biggest clients, the government, talk about “best value”.
Technology and MMC are two potential routes to delivering projects more quickly and efficiently thus enabling Architects to maintain a reasonable margin.
We’re seeing increased activity in the sector around business owners wanting to explore their options with regards to succession planning. Typically the business owners will have the relationships with the clients as well as being responsible for revenue generation, which can often drive down the business value if the business is too dependent on them. What can businesses do better in this area?
Peter – The sands are definitely shifting towards business owners considering succession planning more seriously. The covid-19 pandemic’s prompted owners to re-evaluate the status of their businesses and their own positions within it.
Many SME professional consultancy businesses have challenges around work generation and business perception, in that the owners have the principal relationships with clients, built over many years and the clients often perceive those owners as being the business, with little visibility to other members of the team.
Succession planning gives breathing space and growing room for senior managers to transition to work generators and client champions. But the lesson’s to avoid the previous situation of just having one to one relationships, and instead allowing more staff to build relationships with their opposite numbers.
The ‘Rising Stars Programme’ was created to align senior management business skill development with the aspirations of owners in preparation for exit.
Norman – Sadly, many Architects and Designers are unaware of the options available to them when it comes to planning for succession and exit. As a result they leave it too late to properly plan.
The lack of this knowledge and an unwillingness to plan long term has led to many practices either selling the business below its true value or closing. The lack of a well-developed succession plan often leads to senior people leaving the business as they can’t see a clear path to ownership. This can mean the options for succession start to diminish.
Often the most senior person’s also the majority shareholder which makes it difficult for younger Partners or Directors to buy in.
If your practice has issues around succession, Fortus has a specialist team who can help you find a path to successful retirement – there’s a number of options for you to consider, so drop us a line and see.
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