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Purpose - The aim of the present study is to examine the role of personal interaction in customer relationship management in the project business. The research question we address is: How is personal interaction intertwined with the management of customer relationships in the project business? Design/methodology/approach - We connect an extensive knowledge of personal interactions in industrial business relationships with research on social interaction in the project business to enrich our understanding of customer relationship management in that business. Exploratory case study is used to empirically examine two firms providing project business solutions. One provides highly-tailored technological solutions to the process industry, and the other professional engineering services to that same industry. Findings - The study reveals two specific functions that connect personal interaction with customer relationship management. These two functions explain the importance of personal interaction and disclose the contents of interaction that should be considered in relationship and project management. Furthermore, we illustrate how two situational factors influence and are influenced by personal interaction.Originality/value - The study suggests specific conceptualization of personal interaction as a part of project business management.
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Personal interaction and customer relationship
management in project business
Tuija Mainela
Department of Management and International Business, University of Oulu, Oulu, Finland, and
Pauliina Ulkuniemi
Department of Marketing, University of Oulu, Oulu, Finland
Abstract
Purpose The purpose of this paper is to examine the role of personal interaction in customer relationship management in the project business. The
research question addressed is: How is personal interaction intertwined with the management of customer relationships in the project business?
Design/methodology/approach The authors connect an extensive knowledge of personal interactions in industrial business relationships with
research on social interaction in the project business to enrich their understanding of customer relationship management in that business. Exploratory
case study is used to empirically examine two firms providing project business solutions: one provides highly-tailored technological solutions to the
process industry, and the other provides professional engineering services to that same industry.
Findings The study reveals two specific functions that connect personal interaction with customer relationship management. These two functions
explain the importance of personal interaction and disclose the contents of interaction that should be considered in relationship and project
management. Furthermore, the authors illustrate how two situational factors influence and are influenced by personal interaction.
Originality/value The study suggests specific conceptualization of personal interaction as a part of project business management.
Keywords Customer relationship management, Project management, Business relationships, Personal interaction, Project marketing,
Interpersonal relations
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Introduction
Project business represents an industrial marketing setting in
which the business is built around discontinuous, unique and
complex deliveries of projects (Cova and Hoskins, 1997;
Mandja
´k and Veres, 1998). It has attracted considerable
research interest, especially during the last two decades
(Tikkanen et al., 2006). Management of project business is
said to involve two primary levels management of projects
or project portfolios and management of customer
relationships (Skaates et al., 2002). Management at both
levels is complex especially owing to the unique qualities of
the projects and the discontinuity of relationships inherent to
the project business (Cova and Hoskins, 1997).
One of the main characteristics of the project business the
fact that projects are unique results from the specific
requirements of the customers that are turned into project
offerings through intensive interaction between the
individuals involved (Skaates et al., 2002). Personal
interaction can also be a means of managing discontinuity,
for instance the “sleeping relationship” phase (Hadjikhani,
1996) occurring in project business relationships. When the
economic relationship between the business parties ends at
the point of project completion, personal relationships are
often maintained and may be utilized in some future project
bidding process (see Havila and Wilkinson, 2002). Therefore,
social relationships and personal interaction are important
determinants of project business management.
The personal interaction is acknowledged to represent one
of the key issues in business and industrial marketing, both in
terms of practice and theory. Organizational relationships are
always a result of the actions of the individuals representing
the organizations (Granovetter, 1985) and social relationships
form the channel for doing business (Halinen and To¨rnroos,
1998). Personal interaction was defined as a key element of
interaction between organizations already in the interaction
approach (Ha
˚kansson, 1982). Later research has defined
basic and complex functions for social relationships, with
positive and possibly negative influences on business
relationships (Halinen and Salmi, 2001). Different types of
social relationships may also be activated for different
purposes (Mainela, 2007). Discontinuous relationships and
unique and complex projects make personal interaction a
salient aspect of the management of the business relationships
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
28/2 (2013) 103– 110
qEmerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858621311295245]
Received 17 February 2011
Revised 22 August 2011
Accepted 3 November 2012
The financial support of Tekes – the Finnish Funding Agency for
Technology and Innovation is gratefully acknowledged. The authors wish
to thank the anonymous reviewers for their comments and the
organizations for their invaluable collaboration. The authors have
contributed equally to the paper.
103
generated. However, personal interaction has attracted scant
attention in research on the project business.
The aim of the present study is to examine personal
interaction in customer relationship management in the
project business. The paper answers the research question:
How is personal interaction intertwined with the management
of customer relationships in the project business? We take into
account both the management of the customer relationship as
a whole and the management of single projects. We connect
the research on the specificities of project business with an
extensive knowledge of personal interaction in industrial
business relationships to form an initial framework for the
study. The empirical part of the study examines two different
kinds of project business firms. One provides highly-tailored
technological solutions to the process industry and the other
professional engineering services to that same industry. On
the basis of the case analysis, we define functions of personal
interaction and situational factors that connect personal
interaction to the management of project business
relationships at the two levels. By acknowledging the
influence of both the functions and situational factors of
personal interaction, project business firms could use them
create coherent customer relationships.
Customer relationships in the project business
Personal interaction in project marketing
By definition, a buying and selling project entails the
coordination of buyer and seller activities, as the details of
the project are agreed during extensive buyer-seller
interaction (Skaates et al., 2002). Person-to-person level of
interaction is an integral part of the business exchange as
business interaction is inseparable from the personalities,
experience and attitudes of the people involved (Ha
˚kansson,
1982). Even the emotions of the individuals play an important
part in the interaction (Andersen and Kumar, 2006; Bagozzi,
2006). Tacit knowledge in particular must be exchanged in
the form of personal communication and cooperative work
(Olkkonen et al., 2000; Lehtima¨ki et al., 2008). Personal
interaction is also required to exchange social values (Halinen
and To¨rnroos, 1998) and it may undermine the contribution
of price in determining the behaviour of the two parties (Uzzi,
1997). It is a means of demonstrating commitment and
creating trust in a business relationship (Mouzas et al., 2007).
Trust created in the personal interaction determines the
quality of the relationship between organizations (Child,
2001).
However, the person-to-person interaction could just as
well have a negative influence on the business relationship as
it often is a basis for inconsistencies and ethical considerations
(Ford et al., 1986; Fisher, 2007). The economic exchange is
rarely able to rid itself of the non-economic exchange
baggage, such as kinship and friendship, altruism and gift
giving (Easton and Araujo, 1994). Personal relationships and
social structures can also be the reason why identical
economic or technical problems produce different solutions
(Granovetter, 1992).
Although personally involved, the individuals acting in
business relationships represent their organizations in the
business relationship (Halinen and To¨rnroos, 1998).
Consequently, personal interaction can be examined at the
relationship level too. Industrial marketing and purchasing
research (e.g. Ha
˚kansson, 1982) describes close, open,
mutual and respectful business relationships. These
descriptions are closely tied to the personal interactions
between the representatives of the companies (Ford et al.,
1986). The day-to-day personal interaction manifests as social
bonds between the firms (Thorelli, 1986). In project business
this representation is particularly important as projects exist
only on paper during a considerable part of the period of
marketing the project. The product linkage therefore comes at
quite a late stage in the process. This makes project marketing
as the selling of ideas (Jansson, 1989).
In the project business, the buying process always involves a
large number of actors in different countries with multiple
roles and the distances between the firms and differences in
their requirements can be larger than in conventional
organizational buying (Bonaccorsi et al., 1996; Ford, 1980;
Owusu and Welch, 2007). To bridge these distances and
diminish the differences, personal interaction is a necessity.
Furthermore, on completion of the project, the economic
relationship between the business parties ends and the
relationship enters a sleeping phase (Hadjikhani, 1996). In
this phase, personal relationships are often maintained and
may be utilized in a future project bidding process (Havila and
Wilkinson, 2002). Personal interaction may create a personal
bonding micro-culture in a business relationship, which over
time results in cordiality, comfort and trust in the relationship
level (Witkowski and Thibodeau, 1999).
At the relationship level the negative aspects of personal
interaction can be especially related to the discrepancies of
self and collective interest (Medlin et al., 2005; Medlin,
2006). While collective interest may be built through strategic
plans, individuals’ self-interests are far more complicated to
manage. A conflict of interest may emerge between a firm and
an individual representing it (Fisher, 2007) or between two
individuals representing different intra- or inter-organizational
parties to a business relationship (Plank and Newell, 2007).
Plank and Newell (2007) emphasize that a supplier’s sales and
support staff in particular relate personally with the buyer and
that may create conflicts of interest.
The variety of the personal interaction in project business
relationships has been recognized at the community level in
terms of relevant actors in the project marketing milieu, a
concept introduced by Cova et al.(1996). Accordingly, the
milieu refers to the nature of the context in which project
business firms operate. Within the milieu, project business
firms have to generate or maintain credibility and to be a part
of informational and social networks through personal
interaction by individuals representing them. Cova and Salle
(2000) emphasize community level rituals in the interaction
during the sleeping relationship phase. For example, taking
part in external industry-level meetings is a kind of ritual that
may help keep the relationships alive during non-project
periods. In terms of the socialization to the milieu, the rituals
are important to belonging to the specific circle or tribe (Cova
and Salle, 2000). According to Child (2001) especially in
certain cultures the membership of the same social group and
past experience related to that shared experience is a basis for
organizations’ reliance on each other (see Mouzas et al.,
2007).
Results from the literature review suggest that it is personal
interaction that to a large extent connects relationship
management and project management over time (see
Figure 1). Personal interaction is a part of project business
relationships at three interaction levels. At the person-to-
Personal interaction and customer relationship management
Tuija Mainela and Pauliina Ulkuniemi
Journal of Business & Industrial Marketing
Volume 28 · Number 2 · 2013 · 103 110
104
person level the interaction is focused on exchange of tacit
knowledge, social values and trust creation. At the
relationship level, the personal interaction is the means of
initial idea selling , distance reduction over the project
planning and implementation and maintenance of the
relationship at the sleeping phase. At the community level,
representatives of the firms use personal interaction to engage
in the informational networks and socialize in the milieu.
Participation in community level rituals also keeps the
relationship alive during the sleeping phase.
Methodology
Case study strategy
With regard to the basic assumptions concerning the nature of
reality and knowledge, this study adopts the realist
epistemological orientation presented by Easton (1995). In
the authors’ opinion, there is a reality to be discovered and
that reality is independent of ourselves. However, reality is
cognizable and accessible only through human cognition.
Reality is not obvious, self-evident or transparent and
therefore the researcher’s main project is to discover which
causal powers act in which ways as they seek to understand
the nature of the objects they examine. Individuals who have
experienced the phenomenon under study can describe the
events and their experiences of them, and so outline the
reality. A challenge for a researcher is to analyse the personal
accounts to form a coherent picture of the whole. All social
phenomena are accepted to be concept dependent and
theory-laden, which gives understanding and interpretation a
central role in research. Thus, the meanings are seen to be
created as an interaction between the researcher’s concept
system and the concept system of the object of the study.
The empirical part of the research is an explorative case
study on two project business firms (see Table I). One
provides highly-tailored technological solutions to the process
industry (and is hereafter referred to as Mining Technology
Plc.) and the other provides professional services to the
process industry (hereafter referred to as Engineering Services
Plc.). We chose one case company from manufacturing
industry and the other from a service industr y so as to be able
to examine the personal interaction in what are anticipated to
be different project business contexts. The core of the
business of the manufacturing firm is its technological
knowledge and products related to a specific production
process. The professional service firm markets its strong
expertise in project management and technical engineering.
Data collection and analysis
The primary empirical material used in the present study
consists of 16 interviews with managers of the selected firms.
The thematic interviews dealt with customer relationship
management and marketing of the supplier firms, in general.
From Mining Technology Plc., we have eight interviews
(about eleven hours). The data related to Engineering
Services Plc. consists of 8 interviews (about nine hours).
The key informants in the study are those managers who deal
primarily with customer relationship management in their
daily work. The informants from Mining Technology
represented management at senior, area, product line and
sales levels. The data drawn from Engineering Services Plc.
includes five interviews spanning senior manager, area,
quality and service management input from the supplier. In
addition to these, three interviews with representatives of the
customers of the firm were incorporated. Soon after the
interviews, the recordings were transcribed verbatim.
The transcripts formed the raw data for the analysis which
was then imported to NVivo software intended to assist
qualitative data analysis. We started the analysis using the
theoretical pre-understanding as a loose guide to identifying
the various aspects of personal interaction from the data. Data
from the two cases were first analysed separately by two
researchers using data-based categories to allow the
managers’ perceptions to emerge from the data. All the
instances in which the interviewees talked about personal
interaction were identified and assigned data-based codes. At
that point the researchers compared their initial findings. As a
result, we defined two functions of personal interaction and
two situational factors that combine personal interaction with
the management of project business relationships at the
relationship and project levels.
Case study on two project business firms
The empirical analysis led to the identification of presence and
expertise as the two functions of personal interaction in project
business relationships. These are the functions that work at
both relationship and project levels and connect personal
interaction and management of customer relationships in the
project business. The study will now describe the two functions
and empirically illustrate their different types. On this basis we
model personal interaction as an essential part of customer
relationship management and depict two situational factors
that influence the personal interaction.
Presence as a function of personal interaction
As a globally operating service firm, Engineering Ser vices Plc.
wants to have a strong local presence and be near to its
customers. Therefore, it has offices in over 45 countries that
facilitate constant personal interaction with its customers.
This enables the company to operate very flexibly as customer
needs arise; the local experts can immediately be in contact
with the customer, and at the same time a large network of
experts around the world can be mobilized to respond to
particular customer needs. The company has chosen to use
this type of scattered organization based owing to the type of
professional services it provides. The importance of personal
contacts and a local presence cannot be overstated throughout
the project, especially during the initial phases when the
customer needs are still emerging. In some cases, the local
office is in reality a sole representative, who may even be
Figure 1 Personal interaction in project business relationships
Personal interaction and customer relationship management
Tuija Mainela and Pauliina Ulkuniemi
Journal of Business & Industrial Marketing
Volume 28 · Number 2 · 2013 · 103 110
105
physically located at the customer’s premises. This illustrates
the importance the company places on being in personal
contact with its customers:“In fact, the structure of our
organization is such that we have a huge number of small
offices around the world [...] We are able to provide a local
service there close to the customer and this can mean that we
have one or two engineers there sitting at the premises of our
customer. This enables us to get insights into the customer
processes which allow us to come up with new ideas to
improve them (Vice President, Business Area, Engineering
Services Inc.).Being close to customers who have sites all over
the world is also an important aim for Mining Technology Plc.
While the service firm engineers may even sit in the premises
of the customer, the key account managers of the Mining
Technology Plc. emphasize the challenge of being available
and paying attention, but at the same time not wearing out the
relationship. This makes the personal interaction systematic
but not constant. The higher the level of interaction the more
careful the supplier firm managers tell themselves to be:
I need to be careful because I’m not as big a boss as he is (the General
Manager of customer) to not to wear down the relationship. I’m asked to the
meeting when our General Manager meets the General Manager of the
customer [...]. Then I’m asked to visit the General Manager of the customer
when they are not happy with something in our relationship. They trust that
I will take the message to our General Manager or Division Heads [...]. It is
important that there is a person in between who gets to the top management
of both companies. In a way, when they talk to me they trust that they are
talking to our General Manager (President, Market Area, Mining
Technology Plc.).
In addition to organizing key account style management using
staff with long experience with specific customers, the local
salespeople have an important role in staying in contact with
local site personnel. The customer relationship management
conducted by local sales and maintenance people is of a
different type and at a different level. It can be seen as a kind
of lighter interaction intended to demonstrate availability and
interest in the customer and get information, as is illustrated
in the following:
We maintain regular customer contact through the salespeople. We have
divided the customers between different sales managers [...]. We have people
in local offices, like in Mexico [the Division] has own salesman who then
reports to me (Vice President, Sales & product line, Mining Technology
Plc.).
“Through chat you get some tips how they [the
representatives of customer] think. It may be that it is not
the viewpoint of the whole company but it is valuable to know
what this person thinks [...] a view about the customer’s
thinking and focal net, the issues that need to be taken into
account in the customer’s decision making (Vice President of
a Division, Business Development, Mining Technology Plc.).
At the highest level, the personal relationships often raise a
question about intermediation on request. This generates
occasional personal interaction between the managers. An
example of such interaction is the “fatherly talking-to” as
illustrated in the second quotation which follows. The fatherly
talking-to is always connected to personal interaction with
managers at the top level of organizational hierarchies of the
customers. The personal relationships that provide a channel
for it have a history of several years, are based on personal
level trust and a chemistry between the parties, which
facilitate effective troubleshooting too.
In all these projects in which I have been involved it has had a kind of
calming effect that the customer has had a direct, project-passing route for
discussions if they are worried about something (Vice President of a
Division, Business Development, Mining Technology Plc.).
Somehow he [General Director of the customer firm] always finds out when
I’m in town. Then he invites me into a kind of fatherly talking-to, he is an old
man who uses the same kind of liturgy in which he tells me how important a
customer they are to us and what we could do better. Then if there are any
problems he quickly moves to ask me to handle the problem because those
kinds of problems are not allowed in our relationship (Senior Vice President,
Mining Technology Plc.).
To conclude, presence is created through three types of
personal interaction; constant, systematic and occasional.
From the customer relationship management perspective, it is
essential to acknowledge the influence of these different types
on the customer interface. While constant interaction is
primarily focused on the project level, systematic interaction is
more related to the relationship level and the occasional
interaction is activated when needed on either level. Different
types of personal interaction in creating presence are also
relevant considering the consistency of the interaction with
the customer. Constant and systematic interaction tends to
lend consistency to the interaction. The occasional interaction
is highly person-related and its role is emphasized in
troubleshooting events and therefore its influence on the
relationship and the success of the project can be critical.
Expertise as a function of personal interaction
From the customer’s perspective, the business area in which
the project firms operate in is very much characterized by the
trust the customers place in the professional service provider
and the reliance that they develop on that provider, and more
specifically on the particular experts involved in the projects.
From the customer’s perspective, the projects may involve
great financial risks and even business secrets which lead to a
greater emphasis on close personal relationships. Customers
Table I Basic information on the case firms
Mining Technology Plc Engineering Services Plc.
Services Process technologies for the mining and metals industries Engineering and project management services
Turnover EUR 740 million EUR 650 million
Projects Projects vary from equipment deliveries worth some e10 million, to
technology packages valued at e3-70 million and large turnkey
projects worth up to e200 million. Project duration ranges from
around ten to 36 months
Projects vary from a simple engineering service to a complex
Engineering, Procurement, Construction and Management (EPCM)
project. Project duration ranges from a few weeks to two years
Size The company employs some 1,800 people in 18 countries The company employs some 8,000 people and has operations in 45
countries
Personal interaction and customer relationship management
Tuija Mainela and Pauliina Ulkuniemi
Journal of Business & Industrial Marketing
Volume 28 · Number 2 · 2013 · 103 110
106
feel that it is safer and easier to use the service provider and
specific, known experts than to start negotiating everything
from scratch with a new service provider.
It is typical of the industries of the case firms that the circles
of contacts in them are quite small; there are not so many
organizations and people that operate in a specific project
industry. Within these small circles those individuals changing
jobs can have an important role. Those who have experience
of working in several organizations in the industry value chain,
and in various roles in the projects, develop a broad industry
experience that is highly influential in and valuable to
managing customer relationships, as the following quotation
illustrates:
Another issue is that our personnel have been hired from the plants. They
have industry experience, planning experience, sales experience and project
experience. So [our strength in the eyes of the customer] is the sum of these
two things: we have completed many projects and have the experience and
expertise of our personnel to thoroughly cover everything that is needed in a
project (Vice President, Sales & product line, Mining Technology Plc.).
The personal experience and knowledge of an individual can
as well be related to a specific customer organization and its
needs and decision making structures. In addition the
personal contact nets within the customer organization give
access to the customer. A shared employment history is a
particularly strong basis for the customer trusting an
individual’s expertise, as illustrated in the following quotation:
We actually have quite a lot of people here working with us who originally
worked for our customers. Many of these people of course bring personal
relationships to us. People in our customer organizations feel that it is easy to
phone your ex-colleague and ask him to provide certain services as you can
rely on the fact that he knows what you need (Vice President, Business Area,
Engineering Services, Inc.).
An interesting issue where the customer expertise becomes
tangibly intertwined with project management is in the events
of troubleshooting in the projects. Troubleshooting may be
required either in the project selling phase or later in the
project implementation stage when specific people are tasked
with solving the problems, as is illustrated in the following:
There was a local CEO as a main negotiator with respect to price and even
with my benevolence we could not agree about the price. The negotiations
were in deadlock [...]. Knowing that I had made a deal with [the manager of
another subsidiary of the customer] and we got along well, they [the
customer] suggested that I should continue the negotiations with that
manager. And we found a solution (President, Market Area, Mining
Technology Plc.).
We conducted a project with [a customer] in Mexico for which all the
planning was done in Chile. I basically worked for the maintenance of the
relationship between the companies. However, I was involved in the project
when there were some problems. Then I took part in the negotiations about
continuation (Senior Vice President, Mining Technology Plc.).
Our customer data, in particular, emphasizes the third type of
expertise; that related to specific projects. In case of the
Engineering Services Inc there was a very long history of
cooperation between one of the interviewed customers and a
particular expert of the service provider. The cooperation had
remained intact regardless of the fact that the original service
firm had been the subject of a buyout by the service provider.
The original small engineering office only provided a small
part of the engineering needed in typical infrastructure
projects commissioned by the customer and other types of
engineering services were bought from other engineering
companies. After the acquisition, the small engineering
company became a part of the case company which was
able to offer a full range of engineering services. However, due
to strong personal contacts and a need to rely on positive
previous experiences, the customer continued to buy only the
specific part of engineering from this particular expert that
was by then a part of the case company:
People don’t change even though they change the badge in their overalls. It is
the same people who continue the work [...]. Yet, if the particular engineer
gets sick it doesn’t help that there are some 6000 engineers at the service
provider, if they don’t know anything about our project. During a project,
everything is very person centred (Head of mainte nance services at the
customer organization of Engineering Services Inc.).
Furthermore, the issue of expertise can be seen as one reason
for the possible separation of customer relationship
management from the actual project management. Owing to
the magnitude and significant financial value of the projects
conducted by the case firms, the decisions on the projects are
made carefully utilizing all the available expertise. This means
that different people handle different phases or topics of
negotiation and different people may be responsible for selling
and then implementing the project.
Technical people talk about technology; project managers talk about the
conduct of the project, those who are responsible for investments talk about
profitability and when we come to the highest level the only issue discussed is
trust (Vice Pre sident of a Division , Business Development , Mining
Technology Plc.).
In summary, expertise as a function of personal interaction
relates to three areas of expertise. Industry and customer
expertise might be seen as the most influential at the
relationship level. Project expertise is more focused on single
projects although those may be repetitive. As the Engineering
Services case illustrates, the full potential of the relationship
may not be exploited if the personal interaction relies solely on
project expertise. If the interaction had included more
industry and customer expertise, the relationship could have
involved a broader set of services in other engineering areas.
The Mining Technology case highlights customer expertise as
a basis for relationship consistency and effective
troubleshooting in both relationship and project related
issues. On the other hand, the magnitude of its technology
projects makes it necessary to divide responsibilities within a
single project between several project-level experts, and that
may produce inconsistencies at the relationship level.
Summary of the empirical analysis
In Figure 2 we summarize the empirical analysis and present a
conceptual model of personal interaction in the management
of customer relationships in project businesses. The main
Figure 2 Personal interaction in management of customer
relationships in project business
Personal interaction and customer relationship management
Tuija Mainela and Pauliina Ulkuniemi
Journal of Business & Industrial Marketing
Volume 28 · Number 2 · 2013 · 103 110
107
suggestion here is that personal interaction is a key
determinant of customer relationship management at both
project and relationship levels. Moreover, we argue that it is
actually the personal interaction that connects the two levels
through two specific functions; presence and expertise. The
presence function originates from the need of the project firm
to be close to the customer and is actualized in constant,
systematic and occasional interaction. The expertise function
originates from the specific capabilities and knowledge
deployed to solve problems on behalf of the customer. It
manifests itself as industry, customer and project expertise.
The two functions of personal interaction are influenced by
two situational factors; consistency of the actors and
troubleshooting events. These factors create specific
contexts for personal interaction. Within these contexts
personal interaction can either facilitate or hinder the
customer relationship management. The functions also
influence the situational factors making the effect on the
constructs a two-way one.
Conclusions
The present study combines research on project business
management with research on industrial buyer-seller
relationships to study the role of personal interaction in the
management of customer relationships in project businesses.
When the previous research emphasizes the forms and
influences of personal interaction at different levels, we depict
two specific functions that combine personal interaction with
customer relationship management. These two functions explain
the importance of personal interaction and disclose the contents
of interaction that must be considered in relationship and project
management.Furthermore,weillustratehowtwosituational
factors influence and are affected by personal interaction.
As illustrated in previous research, the roles and influences of
personalinteractioninbusinessrelationship management are
multifaceted and complex to manage (e.g. Cova and Salle,
2000; Halinen and Salmi, 2001; Mainela, 2007). Our
exploratory study continues in this line of reasoning but
suggests specific conceptualization of personal interaction as a
part of project business management. The project business firm
is able to be present when required both during and in between
projects only through the fact that it has individuals representing
it. The presence function therefore originates from the need of
the project firm to be close to the customer and is actualized as
constant, systematic and occasional interaction.
Second, the project business revolves around an expertise
that is inevitably individual. However, the concept of expertise
and its influence on customer relationship management has
not been emphasized in previous research on project business.
Jansson (1989) examined the lengthy idea-selling phase in the
project business that can be successful only if the customer
trusts in the expertise of the project business firm. We
elaborate on this to consider an expertise function that
originates from the specific capabilities and knowledge
deployed to solve problems on behalf of the customer. It
manifests itself as industry, customer and project expertise.
Finally, we suggest that these functions of personal
interaction provide the means to manage the discontinuity
of relationships and uniqueness and complexity of the
projects. These are seen as creating specific challenges for
the management of project business (Cova and Hoskins,
1997; Mandja
´k and Veres, 1998).
This study makes a managerial contribution by opening up
the concept of personal interaction and its specificities in
relation to customer relationship management in the project
business. By acknowledging the influence of both the
functions and situational factors of personal interaction,
project business firms could use them to generate coherent
customer relationships. Although personal interaction and
social relationships are assets that are difficult to manage for a
firm, acknowledgment of the variety of situations where
business and personal interaction intertwine would help
companies to organize to exploit them most effectively. The
project business firms need, in particular, to consider how
they create a presence and apply expertise in managing their
customer relationships. The importance of these social
aspects emphasizes the selection of key staff for specific
projects and specific tasks. It also creates a need for the firm
to take care of the continuity in its relationships at the
personal level and, thereby to avoid high staff turnover.
In the present exploratory study, we have generally
attempted to explicate the influence of personal interaction
on customer relationship management in the project business.
However, in any future research it would be important to
examine how personal interaction and social relationships
have evolved over time from a dyadic perspective during
consecutive projects. This would permit a more detailed
analysis of the relationships between personal interaction and
the situational factors identified. A longitudinal research
approach with continuing access to certain project business
firms would also allow examination of the influences of
personnel changes on the consistency of interaction in both
management of projects and project business relationships. It
would also be interesting to compare social interactions in
customer relationships that are managed through formal key
account management systems with those that have emerged
through informal personal relationships.
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About the authors
Tuija Mainela is a Professor of International Business at the
Oulu Business School of the University of Oulu. Her current
research interests include dynamics of business networks,
social relationships and individual level acting in business,
international entrepreneurship and international opportunity
development. She has published in, for example, Industrial
Marketing Management,Scandinavian Journal of Management
and Journal of International Entrepreneurship. Tuija Mainela is
the corresponding author and can be contacted at:
tuija.mainela@oulu.fi
Pauliina Ulkuniemi is a Professor of Marketing at the Oulu
Business School of the University of Oulu. Her current
research interests include value creation and interaction in
business relationships in different industry contexts, especially
in business services and project business. She has published
in, for example, Journal of Purchasing and Supply Management,
International Journal of Service Industry Management and
Industrial Marketing Management.
Executive summary and implications for
managers and executives
As a globally operating service firm, Engineering Services Plc
(not its real name) wants to have a strong local presence and be
near its customers as it works with them on a project.
Therefore, it has offices in over 45 countries that facilitate
constant personal interaction. This enables the company to
operate with flexibility as customer needs arise; the local
experts can immediately be in contact, and at the same time a
Personal interaction and customer relationship management
Tuija Mainela and Pauliina Ulkuniemi
Journal of Business & Industrial Marketing
Volume 28 · Number 2 · 2013 · 103 110
109
large network of experts around the world can be mobilized to
respond to particular needs.
The importance of personal contacts and a local presence
cannot be overstated throughout a project, especially during
the initial phases when customer needs are still emerging. In
some cases, the local office is in reality a sole representative,
who may even be physically located at the customer’s
premises. Being close to customers who have sites all over
the world is also an important aim for Mining Technology Plc.
(again, not the real name). The key account managers of
Mining Technology Plc. emphasize the challenge of being
available and paying attention, but at the same time not
wearing down the relationship. This makes the personal
interaction systematic but not constant.
In addition to organizing key account style management,
using staff with long experience with specific customers, the
local salespeople have an important role in staying in contact
with local site personnel. The customer relationship
management conducted by local sales and maintenance
people is of a different type and at a different level. It can be
seen as a kind of lighter interaction intended to demonstrate
availability and interest in the customer and get information.
The firms are the focus of the study “Personal interaction
and customer relationship management in project business”
by Tuija Mainela and Pauliina Ulkuniemi who combine
research on project business management with research on
industrial buyer-seller relationships to study the role of
personal interaction in the management of customer
relationships in project businesses.
An important suggestion is that personal interaction is a key
determinant of customer relationship management at both
project and relationship levels. It is actually the personal
interaction that connects the two levels through two specific
functions; presence and expertise. The presence function
originates from the need of the project firm to be close to the
customer and is actualized in constant, systematic and
occasional interaction. The expertise function originates
from the specific capabilities and knowledge deployed to
solve problems on behalf of the customer. It manifests itself as
industry, customer and project expertise.
Project business represents an industrial marketing setting
in which the business is built around discontinuous, unique
and complex deliveries of projects. One of its main
characteristics – the fact that projects are unique – results
from the specific requirements of the customers that are
turned into project offerings through intensive interaction
between the individuals involved. Personal interaction can
also be a means of managing discontinuity, for instance
during the “sleeping phase” when a project is completed and
the economic relationship between the parties ends, but when
personal relationships are maintained to be used in a future
project bidding process.
The roles and influences of personal interaction in business
relationship management are multifaceted and complex to
manage. This study suggests specific conceptualization of
personal interaction as a part of project business
management. The project business firm is able to be present
when required both during and in between projects only
through the fact that it has individuals representing it. The
presence function therefore originates from the need of the
project firm to be close to the customer.
Second, the project business revolves around an expertise
that is inevitably individual. Previous research has examined
the lengthy idea-selling phase in the project business that can
be successful only if the customer trusts in the expertise of the
project business firm. This study elaborates on this to
consider an expertise function that originates from the specific
capabilities and knowledge deployed to solve problems on
behalf of the customer. It manifests itself as industry,
customer and project expertise.
Finally, it is suggested that these functions of personal
interaction provide the means to manage the discontinuity of
relationships and uniqueness and complexity of the projects.
These are seen as creating specific challenges for the
management of project business.
By acknowledging the influence of both the functions and
situational factors of personal interaction, project business
firms could use them to generate coherent customer
relationships. Although personal interaction and social
relationships are assets that are difficult to manage for a
firm, acknowledgment of the variety of situations where
business and personal interaction intertwine would help
companies to exploit them most effectively. The project
business firms need, in particular, to consider how they create
a presence and apply expertise in managing their customer
relationships.
(A pre
´cis of the article “Personal interaction and customer
relationship management in project business”, Supplied by
Marketing Consultants for Emerald.)
Personal interaction and customer relationship management
Tuija Mainela and Pauliina Ulkuniemi
Journal of Business & Industrial Marketing
Volume 28 · Number 2 · 2013 · 103 110
110
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