BPO & Relationship Management
Date: Friday , February 28, 2003
IF YOGI BERRA WAS ASKED TO INTRODUCE THIS topic, he might say: “Selling outsourcing is 70% delivery and the other 70% is about relationship.” Not taking this Yogi Beraism lightly, my experience, as a provider, buyer and now as a consultant, has shown that the relationship plays a vital role in winning outsourcing business. I have seen outsourcing deals won and lost on the basis of the relationship a service provider builds with the prospective client, and relationship is more critical in BPO than in the Information Technology field.
When discussing relationship, the word “partnership” commonly appears. This well-intentioned—but many times a catch phrase—is an indicator of the highest level of relationship desired between a buyer and a provider. Sharing common objectives and goals, assuring ongoing success and being there for the “partner” are the foundations of the partnership.
Confidence and trust starts the relationship, sustains it through negotiations and transition, and becomes the foundation for success during delivery of services. It is also essential if things go wrong. In my last article, I discussed how BPO deals are won on the basis of “risk management” and not just a superior delivery proposition. Trust and risk are the two sides of a coin.
This article addresses how to develop this trust, overcome barriers and leverage for success throughout the entire life cycle of the relationship: prospecting, transitional and mature periods of the business agreement.
Developing the relationship
During the prospecting phase, there is no relationship, so confidence has to be created and trust built with the prospective client. My experience has shown that if one develops this trust in the initial stage, it forms a solid foundation for the future and smoothes the way for developing the business relationship.
First and foremost, building trust requires professional and ethical behavior! There are enough jokes and stories about “snake oil salesmen” who have few ethics and no basis for conviction in their own product. Selling services, IT or BPO, requires that you thoroughly understand the offering, its potential benefit and even its shortcomings. Selling these types of services is not done by buying lunches and dinners or sending gifts. In fact, such actions can backfire and undermine the relationship if trust is not already established.
The most obvious way to build trust is to have credible references. These can be from industry sources (such as publications) or from other clients. A reference from a current client creates instant trust and opens the door more easily than a “cold call.” In BPO, this may mean having “domain expertise” acknowledged by others. I have seen some of the largest IT service providers have difficulty with prospects because —despite their overall track record —the providers cannot demonstrate their experience in a particular domain the client views as important. They must earn the trust by demonstrating their other capabilities and proving that they can learn and deliver services, as promised, without having proven domain experience.
Another way to build trust is to make sure that you understand the prospect’s needs, wants, and—most importantly—what is crucial to them. This requires heightened skills in researching and listening. One of the most effective approaches I have used is to do a thorough research on the company. The table shows various sources one can use to do this research. I have found that research helps you prepare yourself and understand the client’s needs, even before you meet. Also, the research allows you to find other industry sources and relevant references. I have seen successful service providers examine the backgrounds, even the psyches—of key executives—so the providers can pick the “right” person to lead their sales effort.
Another aspect of building trust, early on, is knowing when to say, “We don’t do that, I don’t know or may be our offerings are inappropriate for your needs.” Sort of like the old song “know when to hold them and know when to fold them.” Currently, one of my best clients is a company I had approached several years ago in my role at PricewaterhouseCoopers. At that time, I told them that the PwC offering was not the right strategy for them, and I walked away wishing them luck. However, when they needed a consultant, they remembered my polite exit and immediately awarded us with a contract. Trust builds relationship and relationship builds business.
Sustaining the Relationship
Once the prospect has turned into a client, the relationship changes somewhat. Now the trust must deepen, and this happens as delivery begins to meet expectations and promises. In most outsourcing engagements, the crucial period begins as soon as the contract is inked. This is the time of greatest risk for the client and especially for the executive, who, in most cases, became an internal champion in recommending the service provider. A detailed approach to assuring success during this early period, delivering on promises for the near term results and delighting the customer beyond “stated” expectations will cement this trust and help create a long term relationship with the client.
Another aspect of building and maintaining the relationship is making sure that there is open and frequent communication. This usually takes the form of monthly status reports, quarterly reviews and, often, annual visits to the operation centers. At times, some of these communications may look like marketing, but their importance must not be minimized. It is smart to “advertise” a good relationship, market the achievements and use them to deepen the trust. After all, BPO is all about risk management, and if the risk is managed well, it should be turned into a “reference” call for the next prospect.
One of the adages I like to use is the joy of “no surprises.” In any business venture, there will be times when things do not go as planned and results may not be what was promised. These are the times when the trust must be shored up and not undermined. Early warning of a problem, extra efforts to avoid the problem and going the extra mile to minimize the impact of the problem will earn greater trust. As in a good marriage, the partners in an outsourcing agreement must trust one another through good times and bad, and have confidence that both sides are committed to the relationship. Once this level of trust is reached, the customer becomes a customer for life.
Jagdish Dalal has held senior positions: CIO and VP of e-business at Carrier Corporation, a partner at PriceWaterhouse Coopers handling BPO for Nortel, and VP of information management at Xerox. He now consults with Fortune 500 companies in BPO and IT Services.