Backstage at the 2013 A/E/C Industry Summit

Interview with:
Jay Kuhn
EVP, Strategy & Business Development, Process Plus and EEC

Presentation: “Thriving in today's Middle Market - How Informal Partnerships Impact our Success”

What are some of the points that you’ll be touching on in your presentation regarding the importance of partnerships in the A/E/C industry?

We all hear about the “death” of the mid-size engineering firm.  As we battle with the larger firms for full-service work and with the small firms on rate, we have to look at different ways to compete.  Partnering provides ways for us to get work that we would not get alone.  This allows us to leverage our resources.  While the logic for partnering makes sense, culturally it goes against many of the things that we teach our employees:  sell all the work you can, maximize the margin, make sure you own the relationship.  Partnering requires us to look at the relationship and understand our role within it.  The cultural part is the biggest obstacle to a successful partnership.

Why is this a topic that the A/E/C industry, in particular, should take to heart?

The employees that work for our prospects/clients are strapped for resources.  They are looking for good value, full service engineering.  Partnering allows us to provide the full-service that our clients are requesting. Since we are smaller than our large competitors, we should be able to offer it with greater service and more personalization.

What is your firm doing differently from other firms achieve partnerships and what have the results been?

We have account managers for our partners just like we do for our clients.  They are responsible for being the voice of the partner and making sure we are looking out for the good of the partnership.  We have done joint marketing, joint sales calls, and other activities to ensure that the partnership grows just like any other account.  Because of this attention we are getting exposure to opportunities that we would not have gotten before.  It has allowed us offer a regional presence that would have required much more investment if we would have done it on our own.

Since leaving the consulting industry and joining Process in 2011, Jay has been working on Process Plus's strategic initiatives and business development.  During his tenure, Process Plus has expanded their footprint, added new services to augment their current service offerings in Process Industries, and focused on systems to improve the alignment between Process Plus and their customers.  With greater alignment between Process Plus and their customers, Process Plus has grown 40% over the past 2 years and is positioned for even greater growth going forward.  

Click here for more information on the 2013 A/E/C Industry Summit

Mergers & Acquisitions with Brad Wilson

PSMJ’s senior M&A consultant, Brad Wilson, stops by our Newton office to give us his expert advice on mergers & acquisitions, ownership transition, valuation, commoditization, strategy, and recruiting. Hear what he has to say in this exclusive video!

Backstage at the 2013 A/E/C Industry Summit

Interview with:
Linda Lannen
Chief Information Officer & Senior Vice President
Kleinfelder

Presentation:
“Diversity Matters:  Why and How You Should Achieve Diversity in Your A/E/C Firm”

What are some of the points that you’ll be touching on in your presentation regarding the importance of diversity in the A/E/C workplace?
Competition for Talent goes beyond the AEC industry.  Current predictions are that folks coming out of college today will have 6-8 CAREERS, not jobs.  This means they are not limited to AEC even though they may have that type of degree.  As an industry, this is an issue we need to take seriously before we lose the best and brightest minds to other more diverse and interesting industries.. Talent resides in many places; if we place industry experience as a ‘screening criteria’ or absolute then we are excluding talent with a proven track record of success in the competencies and abilities that we are truly need. Those that can manage change, demonstrate managerial courage, communicate and influence at multiple levels within an organization will often be worth more in the long term to the diversity of thought and experience our firms need.

Why is this a topic that the A/E/C industry, in particular, should take to heart?

Our clients in municipal, state and Federal organizations "look" more diverse than we do; how do we really know that we truly understand their perspectives in solving our country's infrastructure challenges?  Having a more diverse workforce not only gives us more credibility on this point, but it helps us develop better solutions for our clients and communities we serve.

What is your firm doing differently from other firms to ensure diversity in the workplace and what have the results been?

What is Kleinfelder doing differently? We are looking past the old conversation that it's an industry problem that we can't solve by ourselves. Expanding the conversation to broader circles, involving executives with observations, correcting behavior, and a move to collect and analyze data are all underway here at Kleinfelder which is a broad leap from our recent past with more progress expected.

Linda Lannen serves as Chief Information Officer & Sr. Vice President of Kleinfelder, a full-service civil engineering firm headquartered in San Diego and with locations across the US, Australia and Canada.  In this capacity she is responsible for all information technology initiatives and services for Kleinfelder’s nearly 2,000 employee-owners and 55 technology professionals.  Ms. Lannen is also the Executive Sponsor for Kleinfelder’s Corporate Social Responsibility (CSR) program, including Diversity, Sustainability, Volunteerism and Disaster Relief initiatives.   

Click here for more information on the 2013 A/E/C Industry Summit 

Marketing: Your Best Strategic Weapon

With Debra Andrews, Founder and President of Marketri, LLC
Marketri, LLC (Philadelphia, PA) is a full-service provider of customized, results-driven marketing solutions for small to mid-sized B2B companies in the A/E/C sector. Marketri’s president, Debra Andrews, sat with A/E Marketing Journal to discuss how to best market your firm in today’s changing, increasingly mobile environment.

1)    You state that the A/E/C industry has been relatively slow to embrace marketing as a strategic weapon.  Why do you think this is so?

From my experience in working with A/E/C firms, they tend to be very sales and business development driven and not focused on marketing.  I believe they feel that personal relationships and having the lowest bid drives new business, and that marketing doesn't play a role in either.  This may have been the case before the era of modern marketing, but now potential purchasers can read authentically helpful content from your competition.  They can view their experience online, check out their recommendations and endorsements on LinkedIn, view impressive photography on Pinterest and more.  What some firms don't realize is that their marketing savvy competitors have entered the "sales cycle" through effective marketing without having that personal relationship in place.

2)    Why is technical knowledge so necessary for effective communications in the A/E/C industry?

Within the B2B marketplace, in which A/E/C firms participate, sales of products and services are complex, meaning the price point and the consequences of bad purchases are higher.  The ability and willingness of A/E/C firms to share their technical knowledge through marketing communications is extremely important to gain the trust and confidence of a potential buyer.

3)    What are some of the most successful marketing campaigns you have run for A/E/C companies?

Marketri worked with a civil engineering firm to help it become the area's leading resource on sustainability ("GREEN").  Through inbound tactics (including blogging) and outbound programs, consisting of article placements, speaking opportunities and hosting a "Sustainability Summit," we were able to successfully brand the firm in this area.

Keep Reading

What Tips the Scale for AEC Buyers?

A Study from Hinge Marketing

All other things being equal, what do you think Architecture, Engineering, and Construction buyers consider the deciding factor in purchasing decisions? What is that crucial quality that tips the scales?

If you said “experience” or “customer service,” you’re not alone among AEC providers. But you’re also wrong.

My company, Hinge, recently conducted research on exactly this question and uncovered some surprising discrepancies between what sellers thought tipped the scales and what really contributes to AEC buying behavior. By examining AEC sellers alongside the buyers they serve, the study was able to isolate two very different views on the same story – including points where the perspectives aligned, and points where they dramatically diverged.

What sellers don’t see

Take customer service. It’s obviously important, but will it give you a leg up in the final selection? According to Hinge’s study, 38% of sellers called customer service the deciding factor – the most common answer among AEC sellers. But only 4% of their buyers agreed!

What about a firm’s experience? 33% of sellers believe it is the most important deciding factor, making it the second most-common answer from AEC providers. This time, 10% of buyers concurred.

If you have a strength like rock-solid customer service, that’s great. But it has to be something that your clients and prospects value in order for the quality to be a meaningful in closing new business. If a prospect doesn’t value the quality in question, then it isn’t a strength that will help your firm grow.

Now, we know AEC buyers want good customer service. We know experience matters. So what’s going on here?  What do buyers truly value, and what pushes an AEC firm over the top?

What really drives the choice

At Hinge, we learned that sellers tend to focus on factors that buyers come to value over time, qualities that are easier to claim than demonstrate. You can tell a buyer that your customer service is second to none, but everyone says that. So how do you make an impression on prospects?

The answer is reputation. In fact, 32% of buyers cite “a good reputation” as the deciding factor in a purchase – far and away the most common answer among buyers. Yet only 11% of sellers thought reputation was a winning factor for choosing a firm.

Put yourself in the buyer’s shoes. If you’ve got a problem and you need someone to solve it, you want someone you’ve heard great things about from people you trust. Your problem-solver might have a reputation for solving your particular problem or for fantastic customer service; in any case, it’s their reputation that lends them credibility. Weighed against a stranger who claims that they’re great to work with and can solve your problems, you’re probably going to go with the well-recommended option every time.

Of course, this has huge implications for the way that vendors communicate with buyers. The challenge for AEC sellers isn’t to somehow persuade prospects that their customer service is stellar, or that they’re the most experienced firm on the block. Instead, AEC services have to build up a reputation for their best qualities – and particularly for solving the problems they solve best.

What’s more, the firms who understand how to leverage their reputations will have a massive leg up over the competition.

To read the full results of Hinge’s study, check out the research on How Buyers Buy AEC Services.

About the Author:

Sylvia Montgomery is a Senior Partner at Hinge, a marketing and branding firm that focuses on professional services. Sylvia is also a co-author of Online Marketing for Professional Services.   She can be reached at smontgomery@hingemarketing.com or 703-391-8870.

Study Shows 83% Drop in Client-Identified Problems with New Client Satisfaction Tool

Study Shows 83% Drop in Client-Identified Problems with New Client Satisfaction Tool
PSMJ expands partnership with provider of powerful client feedback resource

NEWTON, Mass. (August 14, 2013) – PSMJ Resources, Inc., the leading authority, publisher, and consultant on the effective management of architecture, engineering, and construction firms, announced today an expanded partnership designed to give architecture, engineering, and construction (A/E/C) firm leaders the tools that they need to become more client-centric. 

The Client Satisfaction Analysis (CSA) product, created by Client Feedback Tool and developed in response to client feedback, surveys clients of architecture, engineering, and construction firms to measure critical factors, such as responsiveness, quality, and the clients’ overall satisfaction with the firms’ services. 

In a recent study of 1,121 client relationships by Client Feedback Tool where the client ranked the vendor as not having met expectations, more than 83% of those same vendors marked the vendors as having met expectations after the second survey—demonstrating the vendors’ abilities to make vital changes before losing their clients.

PSMJ is now able to offer this comprehensive CSA to A/E firm leaders as one more way to strengthen client relationships.  PSMJ’s Founder and CEO, Frank Stasiowski, stated “We are thrilled to be able to present this critical tool to our clients. In today’s reality of more firms chasing fewer projects, you can’t just assume your clients will tell you if they aren’t happy.  With this tool, you can discover and fix problems before they cause the client to take that call from one of your competitors.”

Deltek—the leading global provider of enterprise software and information solutions for professional services firms and government contractors—is working closely with Client Feedback Tool to enable Deltek Vision customers to integrate client feedback into the project management process.   Deltek Vision clients represent 77% of the 2012 PSMJ Circle of Excellence members.  

Theresa Mock, vice president of Deltek Professional Services, commented that, “The collaboration between Deltek and Client Feedback tool has important benefits for our Vision customers.  In addition to improving project execution, firms can also leverage the insight to drive repeat business and support value-based pricing.”

This client survey is the second in PSMJ’s tool belt, along with its Client Satisfaction Snapshot (CSS), also developed with Client Feedback Tool, with which PSMJ has had a partnership for the past four years.

For more information about the CSA and PSMJ’s partnership with Client Feedback Tool, visit www.psmj.com.

About PSMJ Resources, Inc.

PSMJ Resources, Inc. is the world’s leading authority, publisher, and consultant on the effective management of architecture, engineering, and construction firms. With offices in the United States as well as the United Kingdom and Australia, PSMJ offers over 150 titles in book, audio, and video format. In addition, the company publishes several monthly periodicals and delivers dozens of seminars, roundtables, conferences, webinars, and in-house training sessions every year for A/E/C professionals around the world. PSMJ’s sought-after consulting expertise covers a range of critical business areas such as strategic planning, project management, valuation, succession planning, and mergers & acquisitions.

About Client Feedback Tool

Founded as DesignFacilitator in 2004, Client Feedback Tool continues to expand its client base and has changed its name to reflect its growth from the A/E industry to serving a variety of different professional services clients. The Client Feedback Tool orchestrates the collection of client and project specific feedback, translates the data into a strategy, tracks action items, and creates a feedback loop to enable ‘our’ clients better serve ‘their’ clients. Our easy-to-use web-based program gives professional service firms the data they need to strengthen relationships and increase client loyalty.

Media Contact:

Kim Pazera

Vice President, Consulting Services

PSMJ Resources, Inc.

(617) 965-0055

kpazera@psmj.com.

Win More Clients with Value Billing

POSTED JULY 30TH, 2013 BY SHAFAT QAZI & FILED UNDER INDUSTRY INSIGHTS.

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The future is all about delivering services to your clients much faster than competitors can, Frank A. Stasiowski, FAIA, explains in his book Impact 2020–Predictions for the Next 10 Years of the Design Industry. Delivering what your clients need fast is a value-added proposition that allows you to charge  premium fees that clients are more than willing to pay in order to meet their pressing deadlines. Stasiowski recommends abandoning the old business model of just selling hours in favor of basing your service prices on the unique value you alone can offer them—be it knowledge, technology, talent or quality.

Some time back I talked about the concept of value billing and how it can lead to a win-win situation for both you and your clients. Yes, you can charge higher fees and still win more clients, as long as you’re able to demonstrate your niche and value to them. Remember, if you deliver the promised value, your clients will return for your services again and again. 

Having said that, I see most professional services firms focusing on the hourly rates, role-based rates or deliverable-based fixed fee when billing their clients instead of heading toward this value-based model. I always wonder why they’re willing to work for less money. A value-based fee is more about highlighting your expertise and unique value, and getting paid commensurate with that. If you start looking at everything as a value proposition, you’ll be surprised how favorable the outcome is.

Value Billing is for Everybody, But…

Value-based billing is applicable to all service-based industries. But mind you, it can’t be implemented in all situations blindly but rather for those projects which fall within your ‘sweet spot’. For example, the sweet spot for a local architecture firm could be single family homes in Southern California. Most of the firm’s projects are local and hence a tremendous value to the client – being local, within driving distance, knowing the building officials, having knowledge about the locally available materials, and much more. On the other hand, doing a commercial shopping center in Nevada may not fall in their sweet spot. So it all boils down to the actual value you can quantify while highlighting your niche!

Reap Higher Profits with Value Billing

Market-based fees usually end up creating a profit of about 7-18% in most professional services firms today in USA. The average US firm makes about 12%. The assumption is that you are making 8-10% profit but the chances are that in some projects you may actually be losing money.

With value billing, you take your base price (hourly or fixed fee based on market value) and add the extra value you bring to the project. Say you get a housing plan approved faster for a client. After quantifying the savings to the client, add a percentage of that to your fee. Paying $10,000 more for a service that saves the client $200,000 is a no-brainer! Value billing does result in a higher fee than conventional billing because you are adding your value on top of it. But your client will be more than happy to pay you a higher fee if you can clearly demonstrate your value, which in this case is getting a plan approved faster (therefore minimizing the debt service fee for your client) and being able to select locally available materials (hence reducing the overall construction cost).

Bottom line: If you are efficient, let the beneficiary be you. Value billing is going to be significantly much more profitable for you, and often result in winning more clients. So while other firms focus on listing their services and talking about their experience, you can focus on the quantifiable value you will bring to the clients.

About the Author: Shafat Qazi, Founder and CEO of BQE Software, is an engineer-turned-entrepreneur who created the most-awarded time billing software ever, BillQuick, while still in college. He set out to make time tracking, billing and project management easier for engineers as well as all service professionals and continues to perfect BQE Software products hands-on today.