Understanding customer contract priorities

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Understanding your customer is obviously a key part of delivering a successful contract. And of course then having a winning rebid. But how well do you really understand your customer’s priorities throughout the contract period?

Many customers have a lifecycle approach to managing contracts. That means their priorities, and what they are looking at, change at different points during the contract. This can be particularly true of the customer contact with responsibility for managing your contract delivery successfully. Are your delivery priorities aligned to theirs? If not you could find you are having difficulties keeping them ‘on board’. And at the end of the contract find you don’t have the relationship with them you hoped to have. And that could damage your rebid efforts.

Here is one example of a customer contract management lifecycle process:
figure2
Click on the diagram to see a larger version, or to see the original and get more detail on the processes you can access the diagram here:

https://www.gov.uk/government/publications/commercial-capability-contract-management-standards

This is one part of a series of documents and guidance for UK Central Government contract and commercial managers on best practice in managing contracts, produced by the Crown Commercial Service. Other customer organisations’ management processes might differ. But we’ve found a number of elements are similar. And worth understanding for suppliers if they want to align how they work with their customer. And what the customer is most interested in and driven by at different points in the contract.

Let’s pick out some elements that are particularly relevant in our view:

There are clear priorities at different stages of the contract

The customer has a series of priorities at the start during start up and transition, moving onto ongoing (but NOT static) contract management. And then a clear phase where they are focusing on planning for and managing renewal (rebid for suppliers).

Transition

During initial transition the customer is focusing on establishing the KPI model, risks, assessment, governance and expected behaviours for the rest of the contract.

How can you participate in helping them with this to establish a positive basis for the rest of the contract?

Dynamic contract delivery

During the delivery phase of the contract they are managing contract performance, administration of the contract and relationship management (with you and other stakeholders).

But note the emphasis on improvement and innovation. With Joint Improvement Plans, Joint Training and Development, Incentivising Performance, Encouraging Innovation, Change Management, use of a Relationship Barometer.

The customer manager is being tasked with constantly looking for improvements to performance and outcomes (as well as efficiencies). Jointly with the supplier. To ‘Monitor and incentivise performance improvement to achieve the best outcomes’. And ‘Build and improve relationships to drive up performance and optimise outcomes’.

Do you know what your customer’s priorities are during contract delivery? And do you have the approach, processes, and appropriately skilled and incentivised managers in place on your contract to work proactively with your customer to achieve their aims of improving the contract as it progresses?

What do you believe the consequences of not doing this might be for your customer relationships? And your chances of retaining the contract at rebid?

Renewal planning

The customer will be planning for what they call the renewal (from the supplier perspective the rebid). They will, months prior to the official rebid, be starting option analysis, doing early market research and preparing their plans for retendering.

Are you preparing for the rebid months in advance (with a coherent and resourced plan). At least timed in line with your customer’s preparations?

If not you could find that decisions have been made about the scope, specification and nature of the rebid that you have little time to prepare for. And less chance of influencing. Which could nullify a lot of your potential incumbent advantages. And put your chances of winning the rebid at risk.

 

Looking at your own contract management approaches.

Not every customer will manage their contract in line with best practice. Even within the scope of the CCS, not all contracts are yet managed in line with their own guidance. See this report for example: Https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/267693/contract-management-review.pdf

But there is increasing focus on improving how Government manages contracts effectively. And the same applies in the private sector.

We always encourage our customers to treat their contracts as dynamic entities, rather than simply delivering what was originally bid. See for example here: http://rebidding.co.uk/rebidding-solutions/769/ and here: http://rebidding.co.uk/rebidding-solutions/avoiding-the-incumbent-credibility-gap/

If you don’t have an approach that drives your contracts and contract teams to understand your customer’s changing priorities during the contract period. Or don’t have the processes, skills and management approach that enables them to deliver this, you will find you are not building the right reputation or customer support you need to win more rebids.

To see how we can help you improve contract delivery, and win more rebids click here

And to see our own contract delivery lifecycle and how you could put it into action in your business, see a free sample of The Rebid Guide here