By Michael Blankman
Often when describing the roles and responsibilities that are required in an outsourced relationship, the terms most often bandied about include sales, operations, legal, compliance, marketing, technology, product management, and the list goes on and on. In reality the most important role is that of the Relationship Manager. In different industries the names have changed or evolved over time and often terms such as banker, client manager, business leader, team leader, client liaison or whatever else is the organizational flavor of the month are used to describe this role.
Protector of the revenue is another good one! The relationship manager is ultimately responsible for the client, whose work is being outsourced.
Historically, in banking, the relationship manager has operated in one of two ways. Either he or she is used to having primarily a back-office focus and eschews the upfront business role or, on the other hand, believes that it is all about being the client front man. Often what both agree on is that they aren’t responsible for anything relating to outsourcing. In fact, relationship managers are so critical to a projects success that they should generally be well versed in all aspects of the arrangement, including both the initial decision-making process and ongoing management components.
What an RM Includes?
RM’s job includes responsibility for communicating changes in strategy, cost and process. The RM has to be known through all the client touch points and as more than the guy who is going to immediately going to raise the red flag and distance himself from all issues. There is nothing worse then an RM who immediately and hysterically dishes out the blame because they don’t have a real awareness of the process and can’t communicate it effectively to the client. Most often in these relationships the clients are very poorly informed as well.
Accepting responsibility for the entire relationship and being willing to learn all the intricacies of the process will yield significant dividends down the line – this is not easy to learn.
Quality management is also a big part of their responsibility and one that they often do not see as part of their purview. To do this, they need to understand at a high level the broad operational and technological facets of the business. This can only be done by meeting regularly with those areas of the business in a formal fashion, and to really understand why KPI’s are important to their clients, how they are reported and the frequency.
Functioning as a conduit for ongoing Client Communications is also important. Although it isn’t possible or advisable for the RM’s to handle everything directly with a client they should always know what is being communicated. Clients must be operationally conversant as well to really understand how they are being serviced. This can’t happen in a vacuum and only with the RM as the champion of the effort. RM’s should review performance results directly with clients. Too often, not enough time is spent educating a client on what is being tracked and why. The ability for the RM to articulate this helps immensely in setting a quality framework for the relationship. There are many instances when an RM makes matters worse because they don’t understand the process, rather than acting as a calming influence. Only through consistent communication can you frame the relationship story.
Ensuring they are a ‘Known Quantity’ at the outsourcer is also important for an RM. They should know all the key players and their roles. RM’s should have relationship review meetings that include not only their “Ops and Systems staff” but also key management from the vendor. The familiarity has to be more then a site visit during the sales process. On an ongoing basis, having converted clients visit the vendor’s location is important and the RM’s shouldn’t be using that as an opportunity to meet vendor management for the first time.
Dealing with Clients
Strategic pricing is a critical component of the relationship manager’s responsibilities. Developing and implementing an overall pricing strategy is very important. Understanding and articulating operational performance is a critical variable.
Pricing can’t be done on an ad hoc basis. RM needs to know operationally how well clients are being serviced. The results should have already been communicated and discussed with them all along. Clients should understand directionally how things are going and understand their performance contextually.
The first time you discuss pricing with a client shouldn’t be when you want to increase it. These dialogues need to happen as an ongoing part of the business process. Everyone needs to make money but negotiations cannot happen unless the foundation has been put in place, brick by brick.
Re-pricing communications should start at least six months before any effective date. Being a banker and having schooled in operations and relationship management, I have had to deal with very stereotypical relationships. Once while managing a call center quality crisis certain key relationship managers were asked to be available on site to answer agent questions. There were several who felt that it wasn’t their responsibility to “walk the floor”. Perhaps though, no role has grown more dramatically and nuanced then the relationship manager.
There is no more room for the old turf battles between operations and client management. RM’s are now part of the sales process and introduced to clients before any business has been won. They have responsibilities for cross-selling other products and growing retentive revenue.
Contact the author at: [email protected].