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Presented by: Mike Phillips & Axium Why Firms Collecting Feedback are More Profitable and How to Join their Ranks

Increase Firm Profits Through Client Feedback

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Most firms still suffer a chronic inability to convert their client value into financial prosperity. Profitable firms use methods of understanding and tracking their clients in order to maximize their value. Collecting and incorporating client feedback is the simplest and most effective method of achieving this. This presentation shows AE firm leaders a simple but powerful system to collect and utilize client feedback in order to: . Increase project profitability . Reduce mistakes and project liability . Boost client satisfaction and marketing effectiveness . Increase staff satisfaction and accountability . Improve staff training and assignments

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Page 1: Increase Firm Profits Through Client Feedback

Presented by:

Mike Phillips &Axium

Why Firms Collecting Feedback are More Profitable and How to Join

their Ranks

Page 2: Increase Firm Profits Through Client Feedback

About The Presenter

Mike Phillips AIA President

Phillips Architecture PADesignFacilitator LLC

Mike Phillips AIA, IIDA, ASID, is the President and Founder of Phillips Architecture PA, a 20-year old multi-disciplinary design firm in Raleigh, NC, name to the PSMJ Circle of Excellence and winner of ZweigWhite's Best Firm to Work for award in 2007 and 2009.

A registered architect and certified interior designer, Phillips has incorporated his more than 25 years of commercial interiors and architectural experience into the development of a method of collecting and incorporating feedback to benefit design firms and their clients.

Page 3: Increase Firm Profits Through Client Feedback

Agenda

• State of the Design Industry

• Feedback Systems

• Design Firm Challenges

• Collecting Effective Feedback

• Using Feedback to Improve Your Firm

Page 4: Increase Firm Profits Through Client Feedback

State of the Design Industry - Challenges

• Recession tightens our client’s budgets

• Tighter credit reduces number of projects

• Firms compete for fewer projects

• Competition drives down fees (37% below cost!)

• Firm’s costs climb (12% each year)

trends

Page 5: Increase Firm Profits Through Client Feedback

State of the Design Industry - Future Trends

• Firm’s costs continue to climb (inflation coming)

• Staff benefits & training budgets shrink

• Reduction in design school graduates

• Growth in required level of expertise

• Increased client problems & liability claims

respected

Page 6: Increase Firm Profits Through Client Feedback

State of the Design Industry - Current Status

According to a recent survey by Salary.com,

US Professionals listed as the Top 10 Most Respected in the US include:

Page 7: Increase Firm Profits Through Client Feedback

Doctor $Teacher

$ Firefighter $ Scientist

$ Engineer

$ Architect

$

Professional Avg Salary

State of the Design Industry - Current Status

Source: salary.com annual survey

150,00049,90044,00088,00063,00043,000

Industry profits

Page 8: Increase Firm Profits Through Client Feedback

Source: 2009 PSMJ Resources, INC.

State of the Design Industry - Current Status

#1 problem

Page 9: Increase Firm Profits Through Client Feedback

2008 study by theConstruction Specifications Institute

Found the biggest problem that Clients and Builders have with Architects and Engineers is:

WASTE!

(wasted time, effort and expense)

State of the Design Industry - Perception

Asking for feedback

Page 10: Increase Firm Profits Through Client Feedback

Agenda

• State of the Design Industry

• Feedback Systems

• Design Firm Challenges

• Collecting Effective Feedback

• Using Feedback to Improve Your Firm

Page 11: Increase Firm Profits Through Client Feedback

Traditional Feedback Methods

Method Process Issues Result

Written Reports

Outsider asks client

Data is old and filtered

‘Senile’ Data

Page 12: Increase Firm Profits Through Client Feedback

Method Process Issues Result

Written Reports Outsider asks client Data is old and filtered ‘Senile’ Data

Written Survey

Client writes “story”

Difficult, client avoids

No Data!

Traditional Feedback Methods

Page 13: Increase Firm Profits Through Client Feedback

Method Process Issues Result

Written Reports Outsider asks client Data is old and filtered ‘Senile’ Data

Written Survey Client writes “story” Difficult, client avoids No Data

Verbal Survey Staff asks client Very difficult, often too subjective

‘Soft’ Data

Traditional Feedback Methods

Page 14: Increase Firm Profits Through Client Feedback

Method Process Issues Result

Written Reports Outsider asks client Data is old and filtered ‘Senile’ Data

Written Survey Client writes “story” Difficult, client avoids No Data!

Verbal Survey Staff asks client Very difficult,often too subjective

‘Soft’ Data

Generic Survey

Client wrestles with randomness

Survey too long, difficult,client avoids survey

Skimpy Data

Traditional Feedback Methods

Page 15: Increase Firm Profits Through Client Feedback

Method Process Issues Result

Written Reports Outsider asks client Data is old and filtered ‘Senile’ Data

Written Survey Client writes “story” Difficult, client avoids No Data!

Verbal Survey Staff asks client Very difficult,often too subjective

‘Soft’ Data

Generic Survey Client wrestles with randomness

Survey too long, difficult,client avoids survey

Skimpy Data

Custom Survey

Survey customized for design clients

Survey short, but conciseData = objective, current

Helpful Data

agenda

Traditional Feedback Methods

Page 16: Increase Firm Profits Through Client Feedback

Agenda

• State of the Design Industry

• Feedback Systems

• Design Firm Challenges

• Collecting Effective Feedback

• Using Feedback to Improve Your Firm

Page 17: Increase Firm Profits Through Client Feedback

Design Firm Challenges

ProfitabilityStaff

Retention

Staff Performance Liability

MarketingLeadership

mechanics

Page 18: Increase Firm Profits Through Client Feedback

Design Firm Challenges

Profitability

Liability

Marketing

Mechanics

human systems

Page 19: Increase Firm Profits Through Client Feedback

Design Firm Challenges

ProfitabilityStaff

Retention

Staff Performance Liability

MarketingLeadership

Mechanics

HumanSystems

profitability

Page 20: Increase Firm Profits Through Client Feedback

Design Firm Challenges - Profitability

Minimum profitfor viability:

10%

Design Firmsaverage:

8%

Source: ZweigWhite

Profitability

chart

Page 21: Increase Firm Profits Through Client Feedback

liability

Collect Feedback to:

• Measure firm’s value from

Client’s perspective

• ID issues to improve value

• Set fees more by valueScore Range: 1 – Unacceptable, 4 – Met Expectations, 7 - Exceptional

Client Name Avg. Score

Ranking

Gene Laughlin 6.1 Excellent

EnergyFarms 5.8 Exceeded Expectations

Cinematica 5.4 Exceeded Expectations

Tri-City Jewelers 4.5 Met Expectations

Issue Avg. Score

% Below Acceptable

Accuracy 3.2 21%

Budget 5.4 2%

Helpfulness 5.8 0%

Design Firm Challenges - Profitability

Page 22: Increase Firm Profits Through Client Feedback

Profitability

Liability Claim: Every 5 years

Costs to Firm: Nearly $1M

Client Problems: 6% Billings

Source: XL Insurance Company

Liability

chart

Design Firm Challenges - Liability

Page 23: Increase Firm Profits Through Client Feedback

marketing

Identify Pattern of Problems:Improves firm’s

immediate and long-term response

Design Firm Challenges - Liability

Page 24: Increase Firm Profits Through Client Feedback

Profitability

Liability

Effort:

11% of Budget

Effect:

Less than 25% Commissioned

Source: ZweigWhite

Marketing

chart

Design Firm Challenges -Marketing

Page 25: Increase Firm Profits Through Client Feedback

leadership

Confirm Value to New Clients:

Independent confirmation of your firm’s value

to prospective Clients

Become Existing Clients’ Expert:

Promotes ‘expert’ statuswith your firm’s existing Clients

Project Name Avg. Score

Top Category

ANC Institute 6.2 Budget

Wilson Building 6.0 Helpfulness

1110 Benson Dr. 5.1 Quality

Fitness Center 4.9 Responsiveness

Score Range: 1 – Unacceptable, 4 – Met Expectations, 7 - Exceptional

Category Avg. Score

% Above Excellent

Budget 6.2 30%

Helpfulness 5.4 23%

Quality 5.2 17%

Responsiveness 5.1 6%

Design Firm Challenges -Marketing

Page 26: Increase Firm Profits Through Client Feedback

Profitability

Liability

Marketing

Create Best Fit:

Match team’s abilities to client’s needs

Manage Client Results:

“You can’t manage what you don’t measure.” - Peter F. Drucker

Source: Drucker Institute

Leadership

chart

Design Firm Challenges – Leadership & Management

Page 27: Increase Firm Profits Through Client Feedback

performance

Track Your Team’s Results:

Identify best assignmentsfor each team member

Improve Your Team’s Results:

Identify best trainingfor each team member

Client Name Designer Name Score

Gene Laughlin Michael Walker 6.0

EnergyFarms Amy Pace 5.6

Cinematica Joan Franklin 4.7

Tri-City Jewelers Michael Walker 4.2

Designer Avg. Score

Category

Pam Day 2.4 Budget

Michael Walker 3.0 Budget

Joan Franklin 3.8 Quality

Pam Day 4.3 Responsiveness

Design Firm Challenges - Leadership

Page 28: Increase Firm Profits Through Client Feedback

Profitability

Liability

Marketing

Leadership

Hawthorne Effect

“Whatever is measured, improves.” Elton Mayo

Source: Harvard Business Review ON-Spot

StaffPerformance

chart

Design Firm Challenges – Staff Performance

Page 29: Increase Firm Profits Through Client Feedback

retention

Use Feedback Data to:

Improve performanceand encourage growth

Use Feedback Process to:

Enhance accountability andimprove focus on clients

Designer 12 Month Average Score

CurrentAverage Score

Pam Day 3.4 4.8

Michael Walker 3.7 4.2

Joan Franklin 3.9 4.0

Otis Day 4.3 4.9

Designer Average Score

Client

Nikki Young 5.8 AT&T

Nikki Young 5.5 Wells Fargo

Nikki Young 5.2 Silverton

Nikki Young 4.8 Spirit Group

Design Firm Challenges – Staff Performance

Page 30: Increase Firm Profits Through Client Feedback

Profitability

Liability

Marketing

Leadership

Annual Turnover:

12% of Staff

Cost of Each Departure:

>$100,000Source: PSMJ Resources

StaffPerformance

Staff Retention

3 reasons

Design Firm Challenges – Staff Retention

Page 31: Increase Firm Profits Through Client Feedback

Profitability

Liability

Marketing

Leadership

Top 3 ReasonsWhy Good Staff Leave:

1. ‘Talents Not Seen’ 2. ‘Contributions Not Appreciated’

3. ‘Growth Not Supported’

Source: PSMJ Resources

StaffRetention

StaffPerformance

charts

Design Firm Challenges – Staff Performance

Page 32: Increase Firm Profits Through Client Feedback

pie

Use Feedback To:

• Make talents visible

• Know instantly when applause is earned

• Know specifically where

support is helpful to staff member’s growth

Designer Avg. Score

Category

Joan Franklin 2.7 Schedule

Michael Walker 2.8 Helpfulness

Joan Franklin 2.9 Responsiveness

Matthew Arnold 3.1 Accuracy

Design Firm Challenges – Staff Performance

Page 33: Increase Firm Profits Through Client Feedback

Profitability

Staff Retention

Staff Performanc

e

Liability

MarketingLeadership

Mechanics

HumanSystems

sim to expectations

Design Firm Challenges

Page 34: Increase Firm Profits Through Client Feedback

Components of Client Expectations

Mechanics

HumanSystems

Page 35: Increase Firm Profits Through Client Feedback

Client Value Components

RELATIONSHIPS

DELIVERABLES

HumanSystems

Mechanics

3 H Sys

Components of Client Expectations

Page 36: Increase Firm Profits Through Client Feedback

Quality

Responsiveness

HelpfulnessEffort and Assistance

QuickReaction

Do the Right Thing

RELATIONSHIPS

DELIVERABLES

Components of Client Expectations

Page 37: Increase Firm Profits Through Client Feedback

Quality

Responsiveness

Helpfulness

Accuracy

Schedule

Budget Help ManagingCosts

Help ManagingTime

Do the Thing Right

Effort and Assistance

QuickReaction

Do the Right Thing

RELATIONSHIPS

DELIVERABLES

4 square

Components of Client Expectations

Page 38: Increase Firm Profits Through Client Feedback

Tracking Project Results

High Profit

Loss Average Profit

BreakEven

Target Profit

“Oh no. We didn’t do it right.”

“Great Job. Do it again the same way.”

Page 39: Increase Firm Profits Through Client Feedback

Tracking Project Results

High Profit

Loss Average Profit

BreakEven

Target Profit

add cfb

Page 40: Increase Firm Profits Through Client Feedback

Tracking Project Results

High Profit

Loss Average Profit

BreakEven

Target Profit

CLIENTFEEDBACK

scale

Page 41: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7

Tracking Project Results

Page 42: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7

quads

Tracking Project Results

Page 43: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7

clients

Tracking Project Results

Potential Expert

Poor Fit Burn Out

Page 44: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7

A

B

C

D

E

Clients

LEGEND

ExpertPotential

Poor Fit Burn Out

Tracking Project Results

Page 45: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7

A

B

C

D

E

ClientsLEGEND

ExpertPotential

Poor Fit Burn Out

design team

Tracking Project Results

Page 46: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7

A

B

C

D

E

Design Team

LEGEND

ExpertPotential

Poor Fit Burn Out

proj type

Tracking Project Results

Page 47: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7

A

B

C

D

E

Project Type

LEGEND

ExpertPotential

Poor Fit Burn Out

Tracking Project Results

Page 48: Increase Firm Profits Through Client Feedback

High Profit

Loss Average Profit

BreakEven

Target Profit

Unacceptable - 1

Needed Improvement - 2

Acceptable - 3

Met Expectations- 4

Exceeded Expectations - 5

Excellent - 6

Exceptional - 7ExpertPotential

Poor Fit Burn Out

agenda

Tracking Project Results

Page 49: Increase Firm Profits Through Client Feedback

Agenda

• State of the Design Industry

• Feedback Systems

• Design Firm Challenges

• Collecting Effective Feedback

• Using Feedback to Improve Your Firm

When to ask

Page 50: Increase Firm Profits Through Client Feedback

Collecting Feedback - WHEN

$ $ $Project Start

Low

Hig

h

Project Closeout

FB FBFBFB FBFBFBFBFBFB FB

MeetingKey

Deliverable

Designer’s Increased Value

Start Finish

MeetingEnd of Phase

End of Phase

FB = Send Survey & Collect Feedback

How to ask

Page 51: Increase Firm Profits Through Client Feedback

Collecting Feedback - HOW

STEP 1. Gather Feedback Effectively Objective Professional

Systematic Comfortable Concise Fast & Simple

STEP 2. Resolve Issues and Celebrate Successes

Utilizing face-to-face communication, live phone calls, meetings, lunches.

Who asks

Page 52: Increase Firm Profits Through Client Feedback

Collecting Feedback - WHO

Firm Leaders

Team Leaders

Team Members

Accounting

Marketing

Has Client Contact

Face-to-face

Page 53: Increase Firm Profits Through Client Feedback

Collecting Effective Feedback - Top Ten Techniques

1. Make comfortable to use for all parties

2. Ask questions that create the best reports

3. Ask process-oriented questions

4. Ask questions regarding client’s expectations

5. Ask questions that reduce firm’s liability

Page 54: Increase Firm Profits Through Client Feedback

6. Collect feedback throughout project

7. Collect feedback in trackable format

8. Collect feedback to allow instant alerts

9. Use email to buffer & facilitate understanding

10. Collect & review feedback fast (< 5 minutes)

Scatter plot

Collecting Effective Feedback - Top Ten Techniques

Page 55: Increase Firm Profits Through Client Feedback

• Automatic Centering Starts at “Met Expectations”

• Fast & Easy Intuitive to use, 2 seconds to score

• Captures Detail 60 level answer scale

Measure by Client Expectations

Collecting Effective Feedback

Page 56: Increase Firm Profits Through Client Feedback

Viewing Collected Feedback

1 Answer

1 Survey

Trend Line

Sender: Billy BibbitRespondent: Nurse RatchedCategory: ResponsivenessProject: Activity Center

1st year effects

Page 57: Increase Firm Profits Through Client Feedback

First Year Effects: Phillips Architecture

ProfitabilityStaff

Retention

Staff Performance Liability

MarketingLeadership

Increased 27% after first year, now top 2% in US

Zero claims or ‘penalties’ in last three years

Improved client loyalty, especially during recession

Improved assignments & training; leaders more accountable for team

Feedback scores improved 42%, metrics published

No key staff defections to other firms

Collecting Effective Feedback

Page 58: Increase Firm Profits Through Client Feedback

• State of the Design Industry

• Feedback Systems

• Design Firm Challenges

• Collecting Effective Feedback

• Using Feedback to Improve Your Firm

Agenda

Page 59: Increase Firm Profits Through Client Feedback

Using Client Feedback to Improve Your Firm

ProfitabilityStaff

Retention

Staff Performance Liability

MarketingLeadership

Improve Your Value& Billings to Clients

Improve Awareness and Response to Client Problems

Track Client Loyalty, Improve Referrals, Resolve Issues

Improve Leaders’ Awareness, Improve Staff Assignments & Training

ImprovedAccountability &Reduction ofWasted Efforts

Improve Your Recognition ofStaff Contributions

Page 60: Increase Firm Profits Through Client Feedback

Questions?

Mike Phillips AIA President

Phillips Architecture PADesignFacilitator LLC

Mike Phillips AIA, IIDA, ASID, is the President and Founder of Phillips Architecture PA, a 20-year old multi-disciplinary design firm in Raleigh, NC, name to the PSMJ Circle of Excellence and winner of ZweigWhite's Best Firm to Work for award in 2007 and 2009.

www.designfacilitator.com

AxiumAxium helps architecture and engineering firms streamline difficult processes and increase profitability with easy to use accounting, project management and business development software.

www.axium.com