Relationship management in construction

[edit] Introduction

Relationship management is the process and strategy of continuing a level of engagement between an organisation and its target market, client base, stakeholders, business competitors, and so on. Strong commitment and continuous multi-level understanding is required for relationship management to be successfully implemented.

In construction, the rise of joint venture and partnering contracts, as well as supply chain collaboration, has increased the focus on collaborative elements of project team management. Although many construction companies still overlook the importance of maintaining stakeholder relationships effectively.

It is important to effectively manage relations between project parties as time delays, cost overruns and quality defects can be the result of relationship deterioration. By improving some aspects of the relationship, the chances and implications of poor performance can be reduced.

[edit] Business relationship management

It is important to cultivate and maintain a positive relationships with vendors, suppliers, distributors, subcontractors, and all other business stakeholders on a project. A vital part of this is ensuring all contractual agreements, including payment terms etc., conform to the parties’ expectations.

Networking is a central part of building solid and lasting business relationships. The ability to ask good questions and listen well is an essential networking skill. Strong bonds often form out of mutual interests and common ground happened upon through conversation.

Internally and externally, business relationship management relies on interest being shown towards people, in a business and well as a personal sense. If the layers of formality can be reduced, with personal information forming part of business interaction, then the relationship is more likely to result in mutually beneficial results. Developing a healthy and friendly project ‘culture’, in which everyone feels like their work and point-of-view is valued, can often be key to the success of a project. Not only this, but such culture can be a major attraction in terms of new employees and clients.

Good business relationship management can lead to loyalty, which is important in terms of finding suppliers and subcontractors that can be trusted, with regard to tender bids as well as project delivery. Professionalism should be demonstrated at all times, as well as open and honest communication, efficiency and consideration when dealing with their needs and requirements.

[edit] Customer relationship management

Customer relationship management is the process of establishing and maintaining a strong rapport between the organisation and its customer base as a means of building support or loyalty. This includes data and sales analysis, as well as brand management, to maintain customer interest in the organisation.

The aim of relationship management is to create a partnership between the organisation and its audience rather than considering the relationship merely transactional. By feeling that an organisation responds to their needs, customers are more likely to continue using their products and services. Additionally, by maintaining a level of communication with customers, the business is able to identify potential sources of costly problems before they come to a head.

While an organisation may choose to hire a relationship manager to take on this responsibility, it may also integrate these duties with other positions, such as marketing or human resources. Marketing departments are highly involved in maintaining customer relationships, with targeted campaigns aimed at increasing new and long-term interest.

Such techniques can include:

• Post-sale surveys.
• Announcements and newsletters.
• Customer engagement during development phases.
• Social media engagement.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki

• Bid strategies.
• Can relationships in and between organisations make tangible differences to business performance?
• Client & architect, developing the essential relationship.
• Collaborative practices.
• Construction organisations and strategy.
• Corporate social responsibility in construction.
• Human resource management in construction.
• Integrated project team.
• Joint venture.
• Leadership.
• Leadership styles.
• Partnering.
• Partnership.
• Performance management plan.
• Recruiting and retaining talent in the construction industry.
• Supply chain management.
• Team management.