Customer Empathy - What is it and Why it Matters

I'm going to start this article with a story... I worked with a project manger who once had a contract with a private developer to build a commercial retail building on a cost reimbursable construction management agreement. The job was about $5M - the PM put together a budget that fit with the client's pro forma, the client did some work with the consultant team in the background to finalize the drawings and specs, and the job went ahead.

Every month, my colleague provided the client with a financial update that said the project remained very close to the target budget. The contract documents they were working from were decent and there were no major surprises along the way... The job finished on time, with no major safety issues, and with no litigation. At the final meeting with the client, the PM delivered one last piece of good news - not only had they finished on time, but the job was actually under budget! They had underrun the construction budget by about $250k and the client was getting the building at a reduced price.

Good news all around, right?

The client was FURIOUS.

After some questioning, it turned out the PM knew all along the budget was fat and that the job would come in under budget, but he kept that under his hat and never told the client until the last day. The client meanwhile had a contingency in his own books for unexpected costs... he had made cuts to the project scope with the consultant team because he kept getting reports that they were very close to spending the full budget and he was worried the job could run over budget. Construction projects have a tendency to cost more than advertised - he only had so much money to work with from the bank and if it went past his contingency he would be in trouble.

To save money, the owner had made scope cuts to a lighting package that in other similar properties had been shown to increase the attractiveness of the property to tenants and led to higher lease rates. If he had known about the construction cost underrun at the beginning of the job, he would have installed the more expensive lights and his building would make him more money for as long as he owned it. By the time the job was finished, to rip out the current lights and replace them with the better ones was cost prohibitive.

Not only that, but the contractor was working on a fee schedule that included a percentage of construction cost, so the builder would actually have MADE MORE MONEY if they had added the lights.

What is the moral of this story? Understanding your customer is incredibly valuable...

Customer Empathy

Customer empathy is the ability to grasp the perspectives of your clients. It involves stepping into your customer's shoes, seeing things from their vantage point, and understanding the incentive structure within their world that produces results for both the individual you are working with and the business they work for. Empathizing with customers helps you to build stronger relationships with them, improve customer satisfaction, and deliver the service and final product that best meet their needs.

I have met many project managers in the construction industry who focus on delivering the requirements as per the contract, drawings, and specs. From a legal perspective, this is technically correct - the owner has hired the contractor to build whatever it is in those documents. But the reality is the quality of your project is what is perceived by your customer.

If I had to choose between:

Installing the wrong flooring, painting the walls the wrong colour, installing a door with the reverse swing, and having a customer who is over the moon ecstatic about the project.

Meeting every single clause in the contract exactly as its written and having the customer refuse my phone calls because their so upset with how the job went...

I'm choosing the first option every day of the week.

The difference between the two is empathy for the customer. When you understand what their motivations are, and what is important to from their vantage point, you can key in on those things and deliver a work product that gets them excited.

Although the first option is technically worse, it is the one that will land you repeat work and referrals from the customer.

What You Might Look For

There are many different potential incentives and motivators for the people on the owner's side of the table, and there are some common things that often show up with different types of customers:

Managers of public sector projects are often less concerned about costs, and more concerned about outside perception. Many of these people are happy to pay a bit more if it means the project stays off their boss's radar, or out of the news.
Customers with a revenue generating asset that starts producing cash at turnover (apartment buildings, factories, grocery stores, etc.) are often focused on schedule because each day the job is under construction is a day they aren't making money.
If the building is going to be sold (ex - residential or commercial condos), the owner might be focused on cash flows tied to presales. In this scenario, if sales are weak, they might want you to slow down to preserve cash until sales pick up.
When working on a project for a big business with high margins, project managers are often willing to pay to make problems go away. The less headaches, the better the job.
On the other hand, if you're working directly with the owner of a small business who is funding the project themselves, every dollar you spend is coming right out of their pocket. That $5,000 change order is their family's summer vacation, and they might be laser focused on getting the best value for every expenditure.

Project Success Criteria

At the end of the day, every client will have different motivators... one of the best ways to find out what is important to them is simply to ask.

I've had a lot of wins by defining project success criteria at the very first kick off meeting with the client. I ask the person sitting across the table what it would mean for a project to be considered successful in their eyes when I hand over the keys. It usually takes a few iterations to drill down on the answers before we get to something concrete, but once we have it the answers I'll document them in the meeting minutes and then park that item.

Having defined success criteria is like having the answers to a test before writing it - at every decision point along the way, you can measure your decision against what success means. Then at the the final meeting, you can pull out the first set of minutes and show how you knocked it out of the park!

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