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Journal of Business & Industrial Marketing

Personal interaction and customer relationship management in proj ect business

Mainela Tuija, Ulkuniemi Pauliina,

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To cite this document: Mainela Tuija, Ulkuniemi Pauliina, (2013) "Personal interaction and customer relationship management in project business", Journal of Business & Industrial Marketing, Vol. 28 Issue: 2, pp.103-110, https://doi.org/10.1108/08858621311295245

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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

• r

project portfolios and management

• f

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

• fferings

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

• ften 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

• f 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 q Emerald 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

• rganizations for

their invaluable collaboration. The authors have contributed equally to the paper.

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• 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

• f 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

• f

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

• f 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

• nly 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

• rganizational 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

• f 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

• rganizations’ 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-

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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 industry 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 Services 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

• ffice is in reality a sole representative, who may even be

Figure 1 Personal interaction in project business relationships

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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

• rganization is such that we have a huge number of small
• ffices 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

• f 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

• f 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

• f 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

• ccasional 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

• n 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

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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

• f contacts in them are quite small; there are not so many
• rganizations 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

• f 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

• f 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 maintenance services at the customer organization of Engineering Services Inc.).

Furthermore, the issue of expertise can be seen as one reason for the possible separation

• f

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 President 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

• f customer relationships in project businesses. The main

Figure 2 Personal interaction in management of customer relationships in project business

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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

• riginates 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

• n

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

• f interaction that must be considered in relationship and project
• management. Furthermore, we illustrate how two situational

factors influence and are affected by personal interaction. As illustrated in previous research, the roles and influences of personal interaction in business relationship 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

• riginates 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

• f 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

• n 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

• perate with flexibility as customer needs arise; the local

experts can immediately be in contact, and at the same time a

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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

• f

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

• riginates from the need of the project firm to be close to the

customer and is actualized in constant, systematic and

• ccasional 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

• f

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.)

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