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Collaboration key to FM-client relations

6 September 2013

Uninformed clients, inconsistent account managing and “rogue selling” are some of the factors to blame for the lack of loyalty in the FM sector, according to industry operators.

The need for clients to understand their requirements and for providers to deliver on promises, are some of the imperatives highlighted by FM providers and experts to improve industry relationships.

The comments come in response to a survey published earlier this week warning that FM providers are risking their contracts with clients because of poor relationship management.

It said that loyalty between service provider and client is lower than in any other sector, with only six per cent of clients surveyed considering their providers as “trusted advisors”.

Some FM providers have argued that the situation is more positive than the survey highlights, while other operators have acknowledge that issues do exist.

Norland group services director John Maidment said that “rogue selling”, where contracts are won at low margins, did not help client/provider relationships.

“Poor loyalty and high levels of churn are always going to be a characteristic of markets which use price as a differentiator,” he said. “It’s just a matter of time before the existing relationship is undercut by a new provider with deeper pockets.”

“The provider is working on the basis that the margin will be grown during the duration of the contract which leads to the antagonism described in the survey.

“Both sides of the industry must balance cost and value and find ways to ensure quality is being specified and delivered.”

FM consultant John Bowen argued that the client also has a responsibility to buy at the right price but can often be hampered by a lack of understanding about what they need.

“That contributes two factors,” he says. “Firstly if they didn’t know what they needed, their specification was almost certainly wrong and that alone will lead to dispute when the supplier tries to deliver to the contract. And secondly, if you don’t know what you need how can you judge what you should be paying?”

The survey also concluded that relationships and loyalty was better with smaller providers, defined as companies with a turnover of less than £250 million.

Bowen suggested that account managers in larger companies are often moved around and were not at any one account long enough to build relationships.

Several providers that FM World spoke to, including Norland and G4S, said that they invested heavily in monitoring and maintaining relationships, resulting in good levels of customer retention.

Emcor group executive director Christopher Kehoe said that its experience of client relations was more positive than the survey suggested. He pointed to the success of using BS11000 in Collaborative Business Relationships to provide a roadmap.

He said: “This research underlines the need for FM companies to work collaboratively with their customers, and with Emcor having now achieved BS 11000 accreditation with five customers, across both public and private sectors, we believe that the FM industry is beginning to recognise the importance of effective collaboration and the benefits it can bring.”

G4S said that relationship management was built in at a contractual level via established reporting mechanisms.

“We conduct annual surveys of our contracts and these are echoed at the local level with customer satisfaction monitoring of individual contracts which generate very high response rates from service users of around 90 per cent,” a spokesperson said.
“Many of our clients are more than happy to provide positive public endorsement of our services, and have been extremely supportive in helping us to win industry awards.”

Norland’s Maidment said that it had customer retention levels of 90 per cent but and that loyalty came when providers delivered on promises and continued to add value year on year.

“Providers have to work really hard to be seen as trusted advisors by their clients,” he said. “It doesn’t just happen. It’s up to providers to ensure they are offering something different and then actually walk the talk.”

Read our feature on the BS 11000 standard here.