Design Facilitator has collected over 30,000 responses from clients of Architecture, Engineering and other professional service firms. They've analyzed these responses and their research has identified the most damaging misconceptions firms believe about their clients' perceptions. * Misconception #1: Clients think our fees are too high * Misconception #2: Clients will tell me if they have a problem * Misconception #3: I know exactly how to help my clients best * Misconception #4: Clients are just looking for the cheapest option In this presentation, we'll show you how these misconceptions negatively affect your Architecture or Engineering firm and your clients. We'll provide strategies to overcome these problems, create stronger client relationships through more successful project outcomes and increase your firm's profitability.

1. The Six Major Myths
About A/E Industry
Presented by:
Mike Phillips, AIA

2. About The Presenter
Mike Phillips AIA
President
Phillips Architecture PA
DesignFacilitator 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.

3. Six Major Myths About the A/E Industry
by DesignFacilitator
THE INDUSTRY EXPERTS ON COLLECTING AND INCORPORATING
CLIENT FEEDBACK
• HAVE ANALYZED OVER 30,000 SURVEY RESPONSES
TO REVEAL ACCURATE PERCEPTIONS OF A/E/I INDUSTRY CLIENTS
• CONSTANTLY TRACKING AND UPDATING OUR UNDERSTANDING
OF HOW A/E/I CLIENTS SEE DESIGN FIRMS
• FEEDBACK TOOL DESIGNED BY ARCHITECTURAL FIRM
AND CUSTOMIZED FOR USE BY A/E/I INDUSTRY

4. Part 1
Why Firms Collecting Feedback are More Profitable
and How to Join their Ranks
Showed attendees most effective methods of gathering feedback from
their clients
Part 2
The Six Major Myths
About A/E Clients
Contact us if you would like to schedule a presentation of Parts 1 or 2
Six Major Myths About the A/E Industry

5. WHAT IS A MYTH?
myth ’mith noun [Greek mythos]
first known use: 1830
1: a thing having only an imaginary or
unverifiable existence
2: an ill-founded belief
3: an unfounded or false notion
4: an unproved or false collective belief
used to justify disruptive behavior
Six Major Myths About the A/E Industry

6. WHAT PAINS DO THESE MYTHS
CAUSE OUR INDUSTRY?
1. Leads firms to misconceptions
2. Produces harmful behaviors & trends
3. Undermines credibility of design firms
4. Disrupts industry prosperity
ANTIDOTE:
Feedback from your clients
dispels negative perceptions.
Six Major Myths About the A/E Industry

7. REALITY:
A. Professional design fees typically
represent less than
5% of project costs.
Total Project Costs
Design
Costs
1 “CLIENTS THINK WE
OVERCHARGE FOR OUR WORK.”
MYTH
1MYTH
Six Major Myths About the A/E Industry

8. REALITY:
B. We tend to overpromise
1MYTH
“CLIENTS THINK WE
OVERCHARGE FOR OUR WORK.”
(Especially when we are competing for projects.)
and underprice
Six Major Myths About the A/E Industry

9. greatly in excess of our entire fee.
1MYTH
“CLIENTS THINK WE
OVERCHARGE FOR OUR WORK.”
REALITY:
C. We are creating a sophisticated solution to complex
problems.
Our solutions can add value and reduce project cost
Six Major Myths About the A/E Industry

10. REALITY:
D. Feedback collected from clients
measures perceptions
relative to expectations.
Clients indicate that designers are
exceeding their expectations.
National
Average
Score: 5.2
21% of
scores
above
Excellent
1MYTH
“CLIENTS THINK WE OVERCHARGE
FOR OUR WORK.”
Six Major Myths About the A/E Industry

11. Symptoms:
A. Designers make assumptions that
“no news is good news.”
B. Minor irritations, if not discovered,
“CLIENTS WILL TELL US
IF THEY THINK SOMETHING IS WRONG.”2MYTH
will fester!
Six Major Myths About the A/E Industry

12. Strategies to Bridge the Gap:
A. Determine who is responsible
for asking for feedback.
(Hint: It’s not the client)
B. Ask client for feedback to help
relieve client’s frustration.
C. Incorporate feedback / refine process
to address issue / improve value
2MYTH
“CLIENTS WILL TELL US
IF THEY THINK SOMETHING IS WRONG.”
(Hint: Smaller problems, fewer lawsuits)
Six Major Myths About the A/E Industry

13. 2MYTH
“CLIENTS WILL TELL US
IF THEY THINK SOMETHING IS WRONG.”
0% 10% 20% 30% 40% 50%
Feedback Average
Industry Average
Client Average
Response Rates to Surveys
REALITY:
Clients only tend to tell
if asked.
When asked,
clients respond at
10 times the average rate.
Six Major Myths About the A/E Industry

14. “CLIENTS DON’T TALK TO OTHER
CLIENTS
ABOUT OUR FIRM.”
3MYTH
Research Refutes:
Julie Olson and Renee Godwin,
conducting research for the
SMPS Foundation, found
word-of-mouth communication
(including clients talking to other clients)
to be one of the most pervasive modes
of referral and reputation building
for design firms.
“Growing Your Business Using the Untapped Power of Word-of-Mouth Marketing” August 2008
Six Major Myths About the A/E Industry

15. “CLIENTS DON’T TALK TO OTHER
CLIENTS
ABOUT OUR FIRM.”
3MYTH
Realities:
Clients talk to SIX clients (or potential clients)
about your firm, especially after
having a problem.
Word-of-mouth referrals and recommendations
provide powerful avenues for new work.
Improving client perceptions of your firm’s value
helps build sustainable financial prosperity
for your firm.
Six Major Myths About the A/E Industry

16. Effective Strategy:
In design projects where client
feedback is collected,
problems that are found . . .
3MYTH
“CLIENTS DON’T TALK TO OTHER CLIENTS
ABOUT OUR FIRM.”
are immediately followed by
improved responses 83% of the time.
Six Major Myths About the A/E Industry

17. Effective Strategy:
Use client feedback as an
“EARLY WARNING SYSTEM”
to spot and attend to problems
and create for your firm
higher client satisfaction and better referrals.
3MYTH
“CLIENTS DON’T TALK TO OTHER CLIENTS
ABOUT OUR FIRM.”
Six Major Myths About the A/E Industry

18. “FIRM LEADERS HAVE ALL THE DATA THEY NEED
TO MAKE THE BEST STRATEGIC DECISIONS.”
95% OF DESIGN FIRMS
DON’T COLLECT CLIENT FEEDBACK.
What we don’t know can hurt us.
We don’t know what we don’t know.
Some of what we know are “MYTHS.”
Myths promote detrimental strategies.
4MYTH
Six Major Myths About the A/E Industry

19. “FIRM LEADERS HAVE ALL THE DATA THEY NEED
TO MAKE THE BEST STRATEGIC DECISIONS.”
95% OF DESIGN FIRMS
DON’T COLLECT CLIENT FEEDBACK.
4MYTH
“You can’t manage what you don’t measure.”
-Peter F. Drucker
Measuring client satisfaction with feedback
provides actionable data for management.
Six Major Myths About the A/E Industry

20. High
Profit
Loss Average
Profit
Unacceptable - 1
Met Expectations- 4
Exceptional - 7
ExpertPotential
Poor Fit Burn Out
4MYTH
“FIRM LEADERS HAVE ALL THE DATA THEY NEED
TO MAKE THE BEST STRATEGIC DECISIONS.”
Measuring client satisfaction
improves team awareness
and team performance.
Improves expert status with client.
“Whatever is measured, improves.”
Elton Mayo
Behavioral Sociologist
Six Major Myths About the A/E Industry

21. “MOTIVATING A DESIGN TEAM IS BEST DONE
WITH EITHER THE CARROT OR THE STICK.”5MYTH
car  rot–and–stick adj. [Sociology]
first known use: 1876
1: characterized by the use of both reward and
punishment to induce group cooperation
Origin:
From the traditional alternatives
of driving a donkey on by either
holding out a carrot or whipping with a stick.
Six Major Myths About the A/E Industry

22. But, the traditional thinking of either using:
• the “carrot” (rewards)
• the “stick” (penalties)
to produce optimum behaviors is problematic
for professional service firms.
Seen as manipulation,
it produces resistance and resentment,
and creates a “battleground” environment
“MOTIVATING A DESIGN TEAM IS BEST DONE
WITH EITHER THE CARROT OR THE STICK.”5MYTH
which turns staff and leaders into enemies.
Six Major Myths About the A/E Industry

23. 5MYTH
“MOTIVATING A DESIGN TEAM IS BEST DONE
WITH EITHER THE CARROT OR THE STICK.”
More effective for professional firms,
is to provide valid measurements
to track and promote performance.
“Whatever is measured, improves.”
To cultivate optimum outcomes:
• Define desired results (by consensus)
• Measure current results (financial and feedback)
• Promote process refinement to improve results (staff = stakeholders)
Six Major Myths About the A/E Industry

24. “GOOD STAFF LEAVE DESIGN
FIRMS
BECAUSE OF MONEY.”
MAJOR ISSUE:
LOSING KEY STAFF . . .
(IS ALWAYS A PROBLEM).
• Recession reduces available financial rewards
• More prosperous firms can more easily steal your staff
• Departing staff may take your hard-earned clients with them
• Each staff loss = >$100K in cost & lost revenue (PSMJ Resources, Inc.)
6MYTH
Six Major Myths About the A/E Industry

25. PSMJ: Top 3 Reasons
Why Key Staff Leave:
1. Talents Not Seen
2. Contributions Not Appreciated
3. Growth Not Supported
6MYTH
“GOOD STAFF LEAVE DESIGN FIRMS
BECAUSE OF MONEY.”
Six Major Myths About the A/E Industry

26. PROBLEM SOLUTION
6MYTH
“GOOD STAFF LEAVE DESIGN FIRMS
BECAUSE OF MONEY.”
Measure performance
Applaud successes ASAP
Identify effective training
1. Talents Not Seen
2. Contributions Not Appreciated
3. Growth Not Supported
Six Major Myths About the A/E Industry

27. MAJOR MYTHS,
DEBUNKED BY USING CLIENT FEEDBACK!6
“CLIENTS WILL TELL
US IF THEY THINK
SOMETHING IS WRONG.”
“CLIENTS DON’T TALK
TO OTHER CLIENTS
ABOUT OUR FIRM.”
“FIRM LEADERS HAVE ALL
THE DATA THEY NEED TO
MAKE THE BEST STRATEGIC
DECISIONS.”
“MOTIVATING A DESIGN
TEAM IS BEST DONE WITH
EITHER THE CARROT OR
THE STICK.”
Six Major Myths About the A/E Industry
“GOOD STAFF LEAVE
DESIGN FIRMS BECAUSE
OF MONEY”
“CLIENTS THINK WE
OVERCHARGE FOR
OUR WORK.”

28. National Feedback
Client feedback from firms across North
America helped debunk the 6 major myths
harming the A/E industry.
Individual Firm Feedback
When we look at client feedback on a
firm-by-firm basis, we discover additional
interesting client behavior patterns.
ADDITIONAL DISCOVERIES FROM CLIENT FEEDBACK
Six Major Myths About the A/E Industry

29. SAME CLIENT  DIFFERENT FIRMS
Different firms can receive
dramatically different feedback
from the same client.
0% 20% 40% 60% 80% 100%
Firm A
Firm B
Survey Response Rate
Differences include:
• 300% increase in responses
Six Major Myths About the A/E Industry

30. Firm A
Firm B
Average Feedback Score
Different firms can receive
dramatically different feedback
from the same client.
Differences include:
• 300% increase in responses
• Significantly higher satisfaction
SAME CLIENT  DIFFERENT FIRMS
Six Major Myths About the A/E Industry

31. 0% 5% 10% 15% 20%
Firm A
Firm B
Scores Below AcceptableDifferent firms can receive
dramatically different feedback
from the same client.
Differences include:
• 300% increase in responses
• Significantly higher satisfaction
• Significantly lower dissatisfaction
Tracking each client’s satisfaction
with feedback provides the data
that increases a team’s value.
SAME CLIENT  DIFFERENT FIRMS
Six Major Myths About the A/E Industry

32. The same firm can receive
dramatically different feedback
from different clients.
Differences indicate:
• Broader range of expectations
• Larger number dissatisfied responses
• Feedback is about the client
Tracking each client’s satisfaction with
feedback identifies how to best adjust
to each client’s different expectations.
ClientA
Range of Feedback Scores
SAME FIRM  DIFFERENT CLIENTS
Six Major Myths About the A/E Industry
ClientB

33. The same client can “see”
dramatically different results from
different teams within the same firm.
Differences include:
• Major variations in perceived value
Team A
Team B
Team C
Average Feedback Scores
SAME CLIENT  DIFFERENT TEAMS
Six Major Myths About the A/E Industry

34. SAME CLIENT  DIFFERENT TEAMS
The same client can “see”
dramatically different results from
different teams within the same firm.
Differences include:
• Major variations in perceived value
• 10 times the number of problems
0% 2% 4% 6% 8% 10% 12%
Team A
Team B
Team C
Scores Below “Acceptable”
Six Major Myths About the A/E Industry

35. The same client can “see”
dramatically different results from
different teams within the same firm.
Differences include:
• Major variations in perceived value
• 10 times the number of problems
• More surveys produce better scores
0 10 20 30 40 50 60 70
Team A
Team B
Team C
Surveys sent in 6 months
SAME CLIENT  DIFFERENT TEAMS
Six Major Myths About the A/E Industry

36. The same client can “see”
dramatically different results from
different teams within the same firm.
Differences include:
• Major variations in perceived value
• 10 times the number of problems
• More surveys produce better scores
• Twice the client response rate
Tracking each team’s results with
feedback identifies the best
assignments of teams to clients.
0% 10% 20% 30% 40% 50% 60% 70%
Team A
Team B
Team C
Rate of Survey Responses
SAME CLIENT  DIFFERENT TEAMS
Six Major Myths About the A/E Industry

37. LESSONS LEARNED:
FEEDBACK FROM A/E CLIENTS
• Busted the 6 Major A/E industry Myths
• Confirmed Client-Firm Dynamic:
- Different clients have different expectations
- Clients perceive differences between firms
- Clients perceive differences between teams
within a single firm
• Tracks Client Expectations to Allow:
-Teams to understand client expectations
-Teams to adjust to client expectations
-Teams to build “expert status” with clients
• Building “expert status” with your firm’s clients
is most effective strategy for creating healthy,
sustainable prosperity.
Six Major Myths About the A/E Industry

38. Questions?
Mike Phillips AIA
President
Phillips Architecture PA
DesignFacilitator LLC
Mike Phillips AIA, IIDA, ASID, is the President and Founderof Phillips ArchitecturePA, a 20-yearold multi-
disciplinary design firm in Raleigh, NC,nameto the PSMJCircle of Excellence andwinnerof ZweigWhite's Best
Firm to Workfor award in2007and 2009.
www.designfacilitator.com
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Axiumhelps architectureand engineeringfirms streamline difficult processes and increaseprofitability with easy to
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