The FM market presently is dominated by the large groups, with smaller firms clustered in niches. So do these large players make better suppliers? Peter Black reports.

Quite a contentious issue but there is a strong train of thought that supports smaller companies are more customer-focused because they have to be.

If a large company has a medium size or large contract this will form a small percentage of its turnover so will they care as much as a smaller company?.

One question often raised is - How important therefore is it for customers and suppliers to work together, as partners?

Partnering has become highly valued within the facilities management and M&E services arena; this is not just a fancy name for doing things the way they’ve always been done, but embracing the client’s culture and values to ensure every relationship is going to be unique.

Quite often it is evident that smaller organisations do have this natural ability and the values that says every customer’s environment is different, what they do is different and what they want from their service providers is different, therefore the majority of smaller organisations will work a lot closer with their Clients and potential Clients and won’t make assumptions and  won’t tell customers what they need. Instead they spend an awful lot of time listening.  

Do large Suppliers make good partners?  More importantly do they listen?

Another key factor in facilities management is the length of the contract, does the service get better in a long-term contract or does having to re-bid annually make providers more aware of the need to excel?

Timescale is probably irrelevant as long as you get the right people facing the customer it doesn’t matter how long the contract is because it’s about managing relationships, reviewing your service provision and working incredibly hard at getting close to customers to understand them, their business needs and the business world they’re operating in. Success is about being customer centric and the ability to demonstrate this, because not all customers are the same or need the same things.

People skills

People do business with people, and within the FM and M&E services business, many are of a technical bias, however not all of the managers and employees in this sector are naturally team players  and this supports the fact that many Building Managers, equally being technical types, are looking at life in terms of black and white.

It’s always expected that anybody can work in customer care, but there is more and more evidence that you have to find people who are altruistic and sympathetic, people who understand about relationship building and who can listen, people who are actually interested in the client, and more importantly have the right attitude.

Many of the smaller companies have recognised this, and have moved away from hiring key personnel from other larger M&E companies, because whilst individuals from this background have the technical  experience or skills.; it’s not so easy to train them in customer care.
 
Can smaller companies afford to focus on improving customer service when margins are so small?

Yes, because customer service is the differentiator. The larger companies often are the best and worst M&E companies, so smaller organisations concentrate on competing with those organisations who don’t give good service.

Smaller companies recognise It’s not about cutting costs, because if they cut your costs you’re basically cutting what you’re paying your staff.  They focus on having well-run contracts, driving productivity, offering value for money and taking all the end user’s problems away not by attracting lower skilled labour”.

Treat your customers well. Get that relationship right and it sets the standard for good contract relations.”

Do suppliers really want to add value to customers?

Adding value to an FM and building maintenance services is different from demonstrating added value from a product-based business.

There are also differences between the service provider, building services sector and technical FM (which provide a tangible product and service), and the internal FM structure in an integrated service offering support to the core business.

In a typical FM scenario there are several major differences:

• The Client purchases are intangible
• The service may be based on the reputation of a single person or department
• It’s more difficult to compare the quality of similar services
• The buyer cannot return the service
  

The main difference between  adding value to a service and that of a product is that in addition to the traditional ‘4 Ps’ – product, price, place, and promotion – services  includes people, physical evidence and process, as well.
 
To add value to an FM and building maintenance service smaller companies are better positioned to  demonstrate the aesthetic appearance of the business from the outside, the inside, and the general presentation of their employees

Do Clients get the best service by selecting on price alone?

A reputable service provider will always seek to add value to the service it provides. However, as customer power and market maturity have reduced most services and products to the status of commodities and cost, a new way of adding value must be adopted.

This is particularly so in the building services industry. A precise, fully specified tender is in some ways the ultimate commodity, with price the only differential. But by building a relationship with a company many smaller suppliers have learnt that it is possible to differentiate yourself from others involved in the tender process.
 
A move to relationship marketing in this sector implies that a much broader approach must be taken by what historically is a traditional delivery cost based business, with people throughout the organisation now being required to be totally involved in selling the company, and developing relationships with their opposite numbers in the customer company at the earliest opportunity.

The ultimate aim of a good relationship is to become seamless with one’s customers and suppliers. This strategy is often found in organisations that have integrated outsourced FM services.

 Strong market brand

A strong market brand offers customers (and other relevant parties) added value based on factors over and above its functional performance. It should demonstrate: who you are, what you do, how you do it, where you are going – and where you are now. A company’s brand is manifested through people, services, environments and communication but all too often they are hidden in the detail.

In the building and FM services sector, branding has often been seen as a ‘soft’ approach for a relatively hard industry, creating identity is expensive, and it is difficult to measure whether you are really getting value.

In a traditional environment where:

• Products and services were the basis of value.
• The customer’s greatest problem was purchase risk management
• The customer created their own solutions
• Performance was measured as product benefits and price
  

We must now move to a definition of value that has the customer, not the product, at its centre. Customer value is created when perceptions of benefits received exceed cost of ownership.
 
A perceived value to a client shouldn’t be on price alone but include the whole of a company’s reputation: its culture, identity and image.

In Summary

The new breed of marketing-savvy Facility Managers will identify that the rapidly changing customer needs and wants determine the impact of those changes on customer satisfaction, and increases the rate of product and service innovation and delivery.  Therefore it is crucial to develop value added strategies to gain their competitive advantage.  

Too many customers, however, forget relationships and service and allow procurement to tender for a standardised commodity with price the only differentiator.  The difficulty is the chosen supplier may not be what you want – would you choose the cheapest brain surgeon?!

Peter Black -  Managing Director
Lorne Stewart Services
420 Kenton rd
Harrow
Middlesex
HA3 9TU
0208 732 2000
www.lornestewart.com