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FMI Quarterly/June 2012/April 1, 2012

Doing What You Promised, On Time

Doing What You Promised, On TimeAs you roll out customer satisfaction initiatives, take a page out of the playbooks of companies in the service industry.

So many people are urging contractors to refrain from defaulting to the tag line “on time, on schedule and on budget,” that talking about it has almost become a cliché in its own right. Make no mistake, the advice still stands. The real question is, “How does a construction company demonstrate a real and higher-order understanding of, and commitment to, a client’s needs, not just lip service?”

The answer lies in proactively managing customer service — the third and final “piece” of the business development jigsaw (alongside marketing and sales), and the one which is so often taken for granted. Executing and delivering a project is where contractors feel at home. After all, this is where the rubber hits the road — where we get a chance to do what we do best, build something. It is the other two “pieces” of the jigsaw that are seemingly so foreign and pose the greatest challenge to most companies — handling the “black art” of marketing and efficiently managing our resources to nurture leads, develop selling propositions and close deals (i.e., sales).

The reality is all too often very different. While customer service is the easiest and most tangible component to grasp mentally, only very skilled contractors do a great job of truly bringing the concept to life within their organizations. Faced with today’s pressure on margins, it is easy for employees to focus on production, not on customer service.

Customer service deals with delivering value to the client to ensure both success on today’s project and winning the next. This service needs to happen 100% of the time. Your customer service process is what your field, project management and administrative functions are doing to ensure the clients get everything they have been promised in both the contract requirements and the procurement process (i.e., “sales promises”).

What are the rewards of getting customer service right? The answers are obvious: increased customer retention, positive word of mouth, improved reputation in the marketplace and opportunities for increased revenues. The flipside results are no more complex when poor customer service is provided.

Highly successful contractors create distinct linkage among the three components of business development (sales, marketing and customer service) and make the process real for those who promise — and those who must deliver what is promised to your client (see Exhibit 1.) We can control the messaging during the work acquisition phase, but any perceived “service quality gap” in the delivery phase creates dissonance between the client’s understanding of what has been promised and the reality of its perceived delivery.

Doing What You Promised, On Time - 2

There is the heart of the issue, how your perceived ability to deliver directly impacts your brand — the outcome of what you say versus what you do. Although you might like to believe otherwise, the reality is you do not have complete control over the brand. Your brand lives in the minds of your clients, competitors, industry influencers, employees and others. Though the name and logo belong to you, what they represent and the image they conjure are an entirely different issue.

SERVICE QUALITY GAPS

Thinking through a service quality gap model is bread and butter to those who make their living in the service industry. Think of hotels, airlines, restaurants, banks and any other “true service” industry where service quality depends on so many variables. Employee action (or inaction), uncontrollable events, disgruntled customers, an uncertain service delivery — all of these impact whether the promise is matched in delivery. This all adds up to “heterogeneity” — the ever-present variability that is a key difference in delivering services rather than factory-produced widgets.

Companies in service industries constantly seek to eliminate problems that can arise because of heterogeneity. Using service quality gap models, they seek to identify and find ways to close the customer satisfaction gap. By using the same approach, construction companies, too, can identify and isolate some of the key problem areas. Identification of specific gaps is a first step in mitigating service quality gaps.

A key factor to consider is the service interface line separating the customer and company (see Exhibit 2). To what extent is your project team considering the impact of its actions “above the line”? Contractors who do this well are those who have created a best-of-class customer service culture.Doing What You Promised, On Time - 3

You can identify gaps through evidence supplied by customer surveys or through candid conversations, observations and discussion by experienced participants. Some typical gaps and underlying causes include:

Provider Gap 1 — Not knowing and/or communicating what clients expect

  • Failure to understand basic and higher-order needs during the work acquisition phase
  • Failure to communicate known expectations to all individuals involved in the project
  • Insufficient relationship focus — are we making the right “touches”
  • Failure to understand the needs of other stakeholders — owners, community, architect, users, etc.

Provider Gap 2 — Having poor-quality designs and standards

  • Poor process/service designs in general (billing, change orders, project updates)
  • Absence of client-driven standards (something specific for this project, rather than our “usual” approach)
  • Lack of physical evidence (appearance of our people, equipment, project site, etc.) that matches our desired brand

Provider Gap 3 — Not delivering to defined standards

  • Failing to deliver the promised paperwork, reports, etc.
  • Deficiencies in our people, whether through lack of information, education or motivation
  • Client’s failure to fulfill its role by not providing the information we need to make decisions
  • Problems with intermediaries and other stakeholders (other trades, consultants, advisors, etc.)

Provider Gap 4 — When promises do not match performance

  • Simple overpromising, raising client expectations beyond our capacity to meet
  • Inadequate internal cross-project communication
  • Failure to manage ongoing client expectations
  • Lack of ongoing client management satisfaction

Look back at a recent project and consider how many service quality gaps you can identify. Then consider how many of these gaps could have been avoided through a more methodical approach to improve customer service and therefore satisfaction. Many construction companies conduct detailed post-job reviews to assess how operational performance could be improved in the future, but how often does one take the same approach to improve customer service?

For companies that live and die in the service industry, these are questions they continually ask of themselves. How can we improve queuing efficiency, how can we reduce the time between order and delivery, how can we improve the customer experience, and so on. Should we not ask ourselves similar questions in the construction world?

ADDRESSING SERVICE QUALITY GAPS

Service quality gaps exist, but then what? How does a contractor demonstrate a real commitment to client needs, not just lip service? By default, the solution begins and ends with your people. The solution seems to be simple: instruct your employees to be “customer-focused” or “put the customers first”. This approach is so general, so vague that it leaves the average employee wondering what those words really mean in practice. What is it that I am supposed to do differently, better, more frequently, not at all, more forcefully, more gently, etc.?

One successful approach is to break down concepts of customer service into manageable portions and then provide tangible examples or “sticky stories” to focus desired behaviors. Here are five dimensions of service quality (RATER, for ease of memory) that can be shared easily and adapted to fit your company. What would achieving high marks on “RATER” look like in your company?

Reliability

  • Provide service as promised
  • Handle client/project problems dependably
  • Perform services/information right the first time
  • Provide services/information at the promised time
  • Maintain error-free records

Assurance

  • Employees instill confidence in clients
  • Employees are consistently courteous
  • Employees have the knowledge to answer client questions or know where to go to find the answers
  • Employees who handle surprises and crises calmly and with confidence

Tangibles

  • Quality of equipment
  • Visually appealing facilities
  • Employees with a neat, professional appearance
  • Good jobsite and field office housekeeping
  • Maintenance of equipment at high standards of functionality, safety and appearance

Empathy

  • Give clients individual attention
  • Deal with client issues in a caring fashion
  • Have the clients’ best interests at heart
  • Understand the needs of the clients
  • Be open and available at all times

Responsiveness

  • Keep clients informed as to when services will be performed
  • Provide a decisive and prompt reaction
  • Be willing to help clients
  • Be ready to respond to clients’ requests

POWER OF THE PEOPLE

The success of this approach rests on the capability and willingness of your people. The curmudgeonly project manager or superintendent who spends his or her time barking orders with a “my way or the highway” approach will likely consider talk of service quality gaps and RATER as “soft”. In today’s market, companies are looking for the secret formula that will edge out the competition and fill their backlog. The formula is no more than creating a relentless appetite for customer service in your people.

What strategies can you employ to achieve this renewed focus?

  • Hire the right people. In addition to technical competence, select for service awareness and competency.
  • Develop people to deliver service quality. Train for interactive skills and encourage teamwork.
  • Provide needed support systems, such as supportive technology, equipment and effective internal processes.
  • Ensure that existing and contemplated incentives reinforce the right behaviors. Eliminate those incentives that encourage counterproductive behaviors in your team members.
  • Retain the best people. Treat employees as customers and measure and reward strong service performance.

Ultimately, a service culture is key to closing Service Quality Gaps. A service culture exists when giving good customer service is a natural way of life in the company and time is spent seeking ways to become ever better in delivering great customer service.

CUSTOMER SERVICE MAPPING

Exploring how a client is “touched” during the course of the project sets you on the right track. Understand the quality of the interaction from his or her perspective, not yours. Consider how a guest’s experience is handled at a premium hotel such as the Four Seasons brand. The brand conjures up an image of a smooth, relaxed “Four Seasons experience”. What appears smooth on the surface takes a great deal of time, effort and energy behind the scenes to ensure the result meets client expectations. It is the apparent calm of a swan, while beneath the surface, the legs are kicking furiously.

By developing your own process flow chart, you can document the optimal process for your work and identify possible Service Quality Gaps. Consider Exhibit 3, a simple process, which demonstrates the actions supporting a straightforward overnight stay.

Doing What You Promised, On Time - 4

There are four primary components in this process:

  • Customer actions
  • “Onstage” contact employee actions
  • “Backstage” contact employee actions
  • Support processes and systems

The level of client interaction, client visibility and internal interaction (back of house) varies as the guest moves through the process, but all efforts should be aligned to achieve the best possible outcome. This is no different from a construction project, with its wide cast of characters on-site or supporting from the office. Yet how often do simple issues become huge headaches as a result of poor internal communication or lack of awareness of customer concerns? To make matters worse, rarely is the client represented by a single individual. More likely, many different entities are acting on behalf or in support of the client, including owner’s representatives, in-house users, facilities managers, consulting engineers and numerous other stakeholders.

Developing and using this approach may appear to be an onerous undertaking. You do not have to map the entire construction experience with every possible interaction. An easy start is to bring together a cross section of employees from both office and field and spend time analyzing some of the key touch points in the construction process. Where are the key challenges, what are the most common items to fall through the cracks? After all, failures of communication between the field and project management teams are a constant source of gripe, frustrating for all involved. What is the impact on the client, and what can be done to smooth out or overhaul a step in the process to yield a more positive result?

Every interaction with a client, influencer or other stakeholder should be treated as a service encounter. Each encounter is a moment of truth and can be crucial in determining customer satisfaction and loyalty. How do we use these opportunities to build trust, reinforce quality, build brand identity and increase loyalty?

ACTIVE CLIENT MANAGEMENT

Determining “how we’re doing” is key to identifying and addressing service quality gaps and potentially dissatisfied clients. Apparently, this is more difficult than it appears, evidenced by the large number of contractors who have not formalized a process for acquiring client feedback.

On one hand, you are concerned about being seen as needy or unsure of yourself. This can lead you to ask for little or no feedback, particularly during project construction. Perhaps you leave it all until project completion, on the basis that you do not want to encourage bad news and rock the boat while the project is under way. Perhaps you do not ask for formal feedback at all, because it is a “regular client who likes us”.

All these options fail to acknowledge one simple fact. There is no one-size-fits-all approach when it comes to seeking client feedback. Some clients may want to provide monthly updates, others none at all; perhaps some leave feedback to project managers, while others want to communicate only at senior levels. The only way to determine the right approach is to discuss and agree to the options on the front end of the project — how often we will check in, who will do so, how formal, written feedback or verbal, and so on. At the very least, do not lose an opportunity to capture a positive client reference. Just as important, however, is learning of a service quality gap at an early stage. In addition, do not rely on those closest to the project to solicit the feedback. If they are neck-deep in the project, they are less likely to assess feedback in the wider context of the client relationship.

Remember those client expectations and how failure to reach them leads to a service quality gap? Well, why not make a big deal of those expectations and ensure they are communicated to all project team members. Posting a “customer charter” at the project site puts those expectations in plain view. Again, this moves you beyond “cost, quality, schedule” and focuses on conceivably softer, though highly important, issues; environmental concerns, access issues, respect for the nearby community, a client’s value set. In one swoop, this act focuses your people’s actions and at the same time broadcasts your intent to the client — a great marketing opportunity.

BRANDING YOUR APPROACH

How does this approach to customer service provide you with a competitive advantage in the marketplace? It boils down to whether you are “doing what you promised”. More importantly, is your approach something that is institutionalized and replicable to the extent you are confident in delivering for the next client and the next project? This is where branding comes back into play. Can you develop a favorable relationship between the customer and your brand, and can you keep it fresh to make the association readily accessible in the customer’s mind?

How can you leverage the brand if you are in the midst of pursuing a new client? You will not yet have had the opportunity to demonstrate this in action. The key is to translate the experience with other clients and demonstrate how it will be applied to the prospective client. To clarify, this is not simply providing an inch-thick stack of project résumés. There are a number of people with equally impressive résumés of similar completed projects. Focus energies on how it is your understanding of the prospective client’s needs, customer service, identification of service quality gaps — the focus on service quality that truly sets you apart from other contractors.

As with many concepts, you have to “walk the walk” to truly create a unique point of difference. Simply saying “me too” is not going to cut it.

Excellent customer service must be a top priority for everyone in the organization. Actual change, not marketing spin, separates you from the competition and delivers value — and therefore your ability to win (or lose) repeat work. As you roll out customer satisfaction initiatives, take a page out of the playbooks of companies in the service industry. Strive to make service quality a part of your living culture, not just a tag line. ■


CASE STUDY: Southwest Airlines and Customer Service

In the U.S. airline market, Southwest Airlines has long been touted as being the most successful at managing service quality gaps. For years, legacy airlines pursued customers on the basis of “full service”, while Southwest focused on a low-cost carrier model, which seemed to resonate with customers. It is true to say there are many issues which impacted Southwest’s success over the years —fuel hedging, use of nonunion labor and single-model aircraft fleet, to name but a few. While these impacts have a real cost impact, other aspects of Southwest’s model were successful because of a focus on customer service.

Customer value starts with the customer
While this might seem obvious, many companies have built their service proposition around their capabilities and not customer needs. Service definition should start with the customer — which services do not improve service quality (and therefore can be removed) and which are highly valued by customers and may be added or expanded at relatively low cost?

The importance of people
Southwest Airlines recognized the importance of employees from inception. In a no-frills environment, there is little for customers to “consume” other than the experience with the airline’s people. In a service environment, it is essential to recruit, train and nurture employees who buy into the service proposition that involves cross-discipline activities — flight attendants who clean planes, for example. Unwillingness to perform a variety of duties means frontline staff can become a cost burden and a liability, not an asset to the organization.

Manage customer expectations
Arguably, the most effective part of Southwest’s strategy is carefully creating and communicating the “no-frills” value proposition to customers. If customers buy in to this contract from the beginning, and are under no illusions, then the opportunity to exceed expectations is created and even the good humor of the flight team becomes a “free” extra.


Stephen Boughton is a consultant with FMI Corporation. He may be reached at 813.636.1245 or via email at sboughton@fminet.com.

 

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