A large number of IT projects end in failure. This has an adverse effect on both the service provider and their clients. One of the root causes of these failures is that the service provider does not have a good enough understanding of what the client expects, which can lead to long-term problems. To varying degrees a project failure will impact a client’s business and the revenue stream of a service provider.
Several strategies have been suggested to help improve and better manage client expectations. These include:
- Distinguishing between the implicit and explicit expectations of clients
- Building deeper relationships with clients
- Maintaining clear communication channels
- Being open and honest
- Managing project timelines in an effective and efficient manner
Managing client expectations is vital when it comes to successfully meeting the requirements of clients and making it more likely that a project will succeed in meeting its objectives. As project success rates rise, the service provider will then be more likely to maintain a consistent revenue stream and more opportunities for growth are likely to present themselves.
In South Africa, just over half of all software projects end in failure (Smith, 2002). The top three reasons for projects failing are:
- Incomplete requirements and specifications
- Changing requirements and specifications
- Lack of user input
It thus becomes important to better understand and address the root causes of project failures.
Managing client expectations is a way of ensuring greater success for both the client and service provider.
Explicit vs Implicit Expectations
Client expectations can broadly be split into two categories:
Explicit expectations are usually verbalized by the client in the form of specific figures and outcomes that they expect the service provider to meet. In cases where the client does not provide the relevant information, the service provider should make every effort to acquire this information (Modi, 2009). Explicit expectations may be stated in the form of:
Implicit expectations are usually not stated or presented in any formal manner; they are “expectations the client holds without telling you” (Modi, 2009). Several factors may influence these:
- The client’s organisational culture
- The reputation of the service provider
- Industry benchmarks
A good way to also understand implicit client expectations is to think deeply from the perspective of the client. Sometimes the client might communicate implicit expectations indirectly through another statement, for example:
- Client statement: “I’ve heard that competitor X has recently automated their entire client onboarding process.”
- Possible implicit statement/question: “What are you as a service provider looking at doing when it comes to improving the client onboarding process in our organisation?”
Risk of not Meeting Expectations
Service providers that do not have a good enough understanding of what the client wants are unlikely to maintain a positive and healthy working relationship with that client. This in turn impacts the productivity of a service provider working on client projects (Scranton, 2013). In the short run these misunderstandings and mistakes might be manageable but, if no corrective measures are taken in the long run, the service provider is likely to run into a number of problems.
The service provider may suffer reputational damage if their perceived level of service is not matching client expectations. The situation becomes worse when this perception is communicated to other clients and prospective clients in the industry (Scranton, 2013). For a small to mid-level service provider, a key part of their initial growth will come from building successful relationships with their clients. These positive relationships help create greater awareness of the company’s products and hence new clients are more likely to trust the service provider to deliver solutions. Reputational damage would stifle potential new revenue streams and existing clients will be less inclined to provide new pieces of work.
Guidelines for Success
Considering what is at stake, service providers need to actively think about how best they can understand and manage client expectations. Research suggests that there are several strategies that a service provider can make use of when it comes to ensuring that client expectations are proactively managed.
1. Building a deeper relationship
It’s of great value to take an interest in developing a relationship with a client that goes beyond a business relationship. Most clients would like to do business with someone they like and feel who cares for their needs (Hopkins, 2006). Getting to know the “client’s family situation, how they spend their free time, where their interests lie and, most importantly, what motivates them on a daily basis” (Olguin, 2012) can all help deepen the personal relationship between a service provider and client. Based on this, a client is more likely to trust the service provider and provide a much better description of what they expect. At the same time, the service provider is able to better understand the implicit expectations of the client.
2. Regular communication
A key part of building a deeper relationship with a client is to maintain a good communication channel. Delivering both good and bad news in a proactive manner makes it easier for a client to deal with problems (Olguin, 2012). At the same time, the clients’ expectation of what is happening or what still needs to be done stays realistic. While a healthy communication channel is important, boundaries also need to be established in terms of when the client can gain access to the service provider (Scranton, 2013). Spending excessive time on client projects may have a negative effect on the personal lives of individuals and lead to increasingly unrealistic client expectations.
3. Making the Right Promises
When communicating with the client, situations will often arise where the client expects an outcome that may not be possible or realistically achievable given the capability of the service provider. At this point the service provider needs to be “clear, open and honest” about what they can and cannot provide (Riviere, 2010). Making promises that cannot be delivered upon may lead to reputational damage. While the client may be disappointed in the short run, in the long run the service provider will build a reputation for “trustworthiness and honesty” (Modi, 2009) and this will ultimately lead to a better working relationship.
4. Managing Project Timelines
Often a service provider will need to go a step further than simply telling the client what can and cannot be done. Whether it’s something as simple as an email or an SLA document, it’s important to be clear in writing about what is expected (Riviere, 2010). Such an agreement should at the very least cover the explicit expectations of the client. Items on this document may cover:
- Budget – Providing an accurate estimate to the client on the overall expected cost of a project or solution (Olguin, 2012).
- Scheduling – Explain how the project work will be broken down into smaller items, how it will be completed and the responsible stakeholders (Riviere, 2010).
- Reporting – Over the course of a project it is important to provide regular feedback on the work done. The client will appreciate the fact that they are getting what they paid for (Scranton, 2013), and both the client and service provider can have regular engagements about what has been done, what can be done better, and anything else that needs to change (Sneed, 2009).
In a situation where the client wants to modify an agreement, the service provider needs to be clear on two points:
- Are these modifications realistically achievable?
- Be clear to the client on the cost of these modifications and any other disruptions which may occur.
Many service providers spend a significant amount of resources on winning a piece of client business. However, all that time and effort will be wasted if the same amount of energy is not put into “managing the client’s expectations after the business is won” (Olguin, 2012).
Managing client expectations is vital when it comes to successfully meeting the requirements of clients and thus making it more likely that a project will succeed in meeting its objectives. As project success rates rise, the service provider will be more likely to maintain a consistent revenue stream and more opportunities for growth are likely to present themselves.
Hastings, C. (2013, September). What Clients Really Want: Client Relationships and Implicit versus Explicit Expectations. Retrieved from www.rhstrategic.com
Hopkins, T. (2006, September). Building Client Relationships. Retrieved from www.entrepreneur.com
Modi, R. (2009, December). How to Effectively Manage Client Expectations. Retrieved from www.strategyexpert.com
Olguin, A. M. (2012, May 07). 6 Tips to Managing Client Expectations. Retrieved from Inc.
Riviere, A. S. (2010, November). 5 Ways to Manage Client Expectations. Retrieved from gigaom.com
Scranton, A. P. (2013, July). The Top Five Tips For Managing Client Expectations. Retrieved from www.forbes.com
Smith, J. (2002, August). Why information technology software projects fail in South Africa. Retrieved from UJ Library and Information Centre.
Sneed, V. (2009, December). Proving Your Worth: Managing Client Expectations. Retrieved from KRC Research.