Client reviews: Value co-creation through relationship management

Service delivery managers and client relationship managers working at companies that sell services, such as at an infrastructure-focused managed service provider, need to cultivate good relationships with clients. This is only possible through regular, two-way communication. The client should voice their objectives, concerns, and priorities; the service manager should demonstrate the effectiveness of the organization’s value streams.

Client reviews enable the service manager to meet clients, have conversations, and talk about the value of the service. Measuring the success of a service is tricky, and nothing can compare to having a real conversation with stakeholders. The value comes from building those relationships.

“An important precondition for co-creating value through services is a functioning relationship between the service provider, service consumer, and other stakeholders. Good relations are a prerequisite for a cooperative relationship or partnership.”
~ ITIL^® 4: Drive Stakeholder Value, pp 3

The value of a service is not only defined by measurement against contractual agreement: it is subject to sentiment and perception. Services can be technically functional but, if the client is unsatisfied, they are not getting enough value. For this reason, it is very important that the service manager understands the client’s feelings about the service. Client reviews can help achieve this.

It is also important to consider the audience when conducting client reviews. Clients are not necessarily interested in the technicalities of the service. They are often more interested in the end result, such as the website being functional or enabling consumers to make purchases. Centring the review around the client’s priorities makes it a much more valuable exercise.

1.1 THE SCALING PROBLEM

The biggest problem with client reviews is that, when done properly, they are time-consuming. It is easy for a small service provider with fewer than ten clients to meet with each of them regularly and discuss their needs. Building relationships is much harder on a larger scale.

Experience level agreements, balanced scorecard, feedback sessions, roundtables, and so on are all ways of trying to standardize an approach towards relationship management in a way that is streamlined and easy to scale. However, the results from these methods do not replace the need for regular, thorough client reviews.

Above all else, service managers should never put the onus onto the client by relying on them to do something that will help measure how the service provider organization is performing.

The service manager needs to understand as much as possible about the client and the service they are entitled to. An effective client review is impossible without the service manager’s thorough understanding of the client’s needs, their perspective and priorities, the quality of the service they have received, the third parties involved, and so on.

Getting to know clients is a long process that differs between organizations. The important thing is to prioritize understanding the client’s core needs: What is most valuable to them? Getting a rounded understanding of the client’s business and environment is also crucial.

2.1 TAILORING TO THE AUDIENCE

The key to building and maintaining strong business relationships is to know your audience. Understanding clients is much easier when service managers can sit down with their representatives and discuss every element of the service in a dedicated forum. 

The client review activity allows service managers to really engage with clients, including discussing their needs and offering solutions to problems. When the service manager is in front of the client, it is easy to demonstrate investment and engagement with their organization, environment, and needs.

“The purpose of the engage step is to build transparency, continual engagement, and trust between the stakeholders in order to ensure a good mutual understanding of each stakeholder’s preferences and experience.”
~ ITIL^® 4: Drive Stakeholder Value, pp 52

When the relationship between the service manager and the client has become more three-dimensional, the service manager can begin tailoring. It is important to tailor the review and the reports presented in the review to suit each individual client.

It can be helpful to start with a report that is aligned with the client’s contract and includes information about the SLA and service availability, as well as any other basic elements of the service. This standard report is the baseline that should be presented at every client review, but service managers should continually ask what else the client would like to see in the report, starting before their first review (in the onboarding phase). Check if there is more information that the client needs, or something they would like to see less of. The report should be unique to each client because each client will have different needs.

Most clients are immediately interested in anything with the potential to impact the client organization’s service offering; that is, anything that will impact the client organization commercially, such as by impacting productivity or taking their own services offline.

The more clients a service manager is working with, the more time will be spent producing reports. This can be a problem when the service manager has to juggle relationship management with actually managing the service. However, although this process is difficult to scale, the rewards far outweigh the costs.

Service managers should have a good understanding of where their report goes after the client review. There is a secondary audience (usually more senior members of the organization, such as Heads of Departments, COOs, and so on) behind the primary audience (the client). This secondary audience may need more information, such as statistics, from the report than the primary audience. Service managers should include these considerations in their tailoring and ensure that they provide all of the needed information in an open, transparent way. Additionally, it is important to consider the medium of the report. Sometimes a Word document is best, but sometimes a PowerPoint presentation might clarify the key points better.

There may be times when it makes sense for the service manager to ask someone else from the provider organization to attend a review to give their perspective on a topic; for example, a sales director or a technical representative. This will give the client the chance to engage with an expert on a particular area, which can be very helpful if it is a high priority for them.

This kind of bespoke service, tailored to each client, is essential for client retention. Some of the main complaints of service consumers are that service providers are uninvolved, do not proactively communicate, and seem uninvested in their service environment. These complaints are easy to combat with client reviews.

2.2 METRICS

Some reports contain more statistics than anyone needs in a lifetime. Including relevant statistics in your reports is a part of knowing your audience and balancing that knowledge with the need for transparency.

A lot of data and metrics can be removed from the main body of the report and included instead as appendices. This means that the information is available to the client, but they do not have to review it in detail unless they want to.

It’s important to collate the information in a way that your clients will find valuable. Group data into an easily digestible graph or chart. Break everything down so that clients can understand what has changed since the last review in one glance. Finally, provide the information in a way that shows improvements and solutions working well in the environment.

By managing metrics in this way and not flooding people with data, the information can be incredibly beneficial. It will improve the quality of the client review and enable more forward-thinking conversations about the direction of the service relationship.

2.3 THIRD PARTIES

All service providers have to work with third parties who also provide services to the client. Third parties are part of the client’s value stream, so it’s important from the service manager’s perspective to recognize that delivering value is a team effort. 

The report that is presented in the client review should include information about third-party work. The client should understand the lines of responsibility, and the report should clarify where the crossovers are between each service provider. There will probably be things that the third party can do that will make the service unavailable.

The act of producing the report before every client review will help the service manager to understand the landscape of the entire service. Day-to-day, the service manager is unlikely to keep up with everything that the client and third parties are doing. Some things will get missed. The reports are a great time to learn about what has happened recently and ensure that you go into client reviews with all the relevant information.

“Customer experience is shaped not only by the contact between the service provider and the service consumer, but also by factors that are partly or completely outside the service provider’s influence.”
~ ITIL^® 4: Drive Stakeholder Value, pp 23

2.3.1 Tug of war

If we picture them as the centre of the service, the service manager is surrounded by technical teams, other management functions, and the client. They are in the middle of the client, the provider organization, and any third parties, as shown in Figure 2.1.

Figure 2.1 The service manager as the conduit of value

Service managers both juggle information and requests that are being thrown their way from all sides, and field requests for attention that pull them in every direction at once. The only way to manage such varied and numerous needs is to set expectations, delegate, and build relationships with everyone involved.

When value creation is everyone’s objective, it is possible to manage competing demands to get the most valuable outcome. The service manager, though, must be willing to manage in all directions to keep from being overwhelmed.

Client reviews are a great time to review SLAs. Sometimes SLAs are generic, particularly in the beginning of a service relationship, but they can and should be tailored like anything else.

It’s important to understand, for example, exactly how impactful service downtime is for a client. If the SLA is not set up correctly, service managers risk the watermelon effect, where the SLA is technically being fulfilled (green) but the client is unhappy and is not realizing enough value (red).

SLAs may also need to evolve over time as the client’s business changes. If a client on a lower tier of entitlement begins experiencing more demand, they may need to switch to a higher tier. Without regular check-ins with clients, this kind of evolution of needs may not be discussed and the client may remain on the lower tier of service for too long, resulting in under-servicing and reduced value.

3.1 IMPROVING ON BREACHES

Zero percent downtime is an unattainable goal. Everyone, especially clients, should know that problems and incidents will occur and sometimes SLAs will be breached. The difference between a mediocre and an excellent service provider is in how they respond to such breaches.

Contracts are necessary documents, but it should never be necessary to defer to the contract in a client review. Service managers who need to leverage the contract against the client have not built up a solid client-provider relationship. Those antagonistic conversations should absolutely not be typical.

Instead, service managers should go into the client review fully informed about the breach and ready to discuss it openly with the client. A continual improvement approach is most appropriate in this situation. The client will likely be relieved to hear that the service manager is aware of the issue and has proactively thought of some possible fixes.

Service managers need to report transparently across the estate, and particularly with regards to the shortcomings of the service. There is a big difference between a client raising an issue and asking for a solution and a service manager highlighting an opportunity for improvement.

“Adopting the service mindset, including service empathy, is important for turning issues into opportunities to improve services and users’ loyalty and trust.”
~ITIL 4 ^® Drive Stakeholder Value pp 154

A very important part of the client review process is the risks and recommendation section. If there were no problems or incidents to discuss in a client review, and the review ends with no recommendations for improvements, the service manager may have missed an opportunity to create value for the client and the provider organization.

At the end of the review, after discussing the current service, service managers should talk the client through some options for changing their service. For example, if the client organization has grown recently, the service manager might suggest upgrading to a higher tier of service or suggest additional service that the client can use. On a smaller level, the service manager might explain some cheap, bolt-on services that can be added to the contract quickly and outline all the benefits these might offer. Another option is to identify an existing part of the service that the client does not need and suggest removing that from their contract.

It is important that service managers ensure that they only recommend meaningful changes to the client that will make a real difference to their benefit realization. The client should trust that the service manager has thoroughly considered their specific needs and is not simply trying to sell anything they can to them.

Doing this can have a commercial and material impact on the client and environment. This is great from the service manager’s perspective because they can have forward-thinking conversations that will create value in the future.

“In most cases, it is not enough for a service to meet a stakeholder’s actual need for outcomes. The stakeholder also needs to trust that the service provider will continue to provide a certain level of service and improve it over time.”
~ ITIL^® 4: Drive Stakeholder Value, pp 52

Is the client king?

Sometimes the customer is wrong. It happens. The problem is that service managers have two, almost competing, roles: One is to champion their clients and their needs to the provider organization, and the other is to provide the service in a way that is sustainable, scalable, and commercially viable going forward.

When clients make demands that the organization cannot fulfil, it is important to talk with them and find an achievable solution.  

Over-servicing clients is unsustainable. Over-servicing means that the provider organization is not setting realistic expectations, and the client will likely be surprised when their service reverts back to the agreed-upon levels.

Under-servicing is also a problem. A common reason for under-servicing is when a client’s environment is doing incredibly well (few tickets, few problems), and so the supplier under-services that client, thinking that they do not need much support.

It’s very important that service managers promote the provider organization’s processes to the client. A classic sign of over-servicing is allowing clients to circumvent or ignore the internal processes that have been established to control the flow of work through the organization. If the problem management team has a ticket system, but the client insists on raising problems directly with a contact in the team, the client should understand that it may take longer for their problem to be investigated. It is the service manager’s job to explain to the client that if they follow the processes properly (which should be part of the terms of their SLA), they will receive the help that they need.

There are hundreds of organizations out there that can offer valuable services to your clients. Furthermore, the pace of change of technology means that it is harder and harder to provide a unique solution to difficult problems. With the huge amounts of training and development going into the IT space, and with the global reach that organizations have, service providers are no longer distinguished by their technical expertise.

Instead, service providers need to become outstanding in the arena of service management, which means building relationships with clients. Getting close to clients and tailoring your approach through client reviews is the best way of establishing and maintaining long-running service relationships in the modern environment.

Sej Naul is the Head of Service and Project Delivery at Digital Craftsmen LTD, a managed service provider technically focused on infrastructure. Sej has extensive expertise in ITSM and project management.

An exceptional communicator, focusing on value and service, Sej is highly capable of managing multiple clients and projects, ensuring a bespoke and tailored service while navigating the complexities of multi-vendor relationships.