Posted on October 28th, 2010 View Comments
Feedback provides incredible returns on investment. Simply asking for an evaluation of how your processes work for a client takes two minutes – but the information provided gives you valuable data to assure effective, successful projects.If you make the leap to a holistic feedback platform like our Client Feedback Tool, the systematic approach of continuous improvement pays even higher returns. Based on our research, we’ve listed several benefits a $10 million/year firm may see. If your firm is larger or smaller, simply multiply accordingly to estimate your returns.
- Identify your top 10% most loyal clients. Which clients have told you they value you most? Convert this discovered value into increased billings, increasing fees by 3% to your top-rating clients. For our $10 million example firm, this translates into roughly $30k in additional profit each year.
- Reduce wasted efforts by 5%. The New York Times bestselling book “Crucial Conversations” outlines research conducted by the authors regarding the importance of effectively discovering and dealing with crucial conversations. According to the study, every crucial conversation avoided costs an average of $1,500 and a full workday of wasted effort. According to XL Insurance liability insurers, this wasted effort accounts for 6% of a firm’s revenue. 6% of revenue as wasted effort, reduced 5%, saves a $10 million firm over $30k yearly.
- Retain one client on the “bubble.” One-third of our subscribers came to us after losing a major client. In every case, these firms were surprised by the defection, and realized they were blind to a pattern of problems the client never brought to light. Frequent feedback greatly reduces the chances of this happening. According to PSMJ Resources, AEC firms spend four times more money replacing a client than the costs of retaining one. Even if you replace the lost revenue of a departed client, the added cost of winning a new client typically exceeds $22k.
- Reduce key staff departure by 5%. PSMJ Resources again reports that replacing your best staff costs in excess of $100k per departure. Most key staff leave not for better salary, but because they feel unappreciated, unvalued, and that their growth is not supported. Quantitative feedback gives you the tools and information to recognize performance. In fact, your clients will be doing this directly. Using our system, clients indicate performance is “Exceptional” 22% of the time. This satisfying work environment will help retain (and identify) your best people, saving an average of $67k each year.
- Increase marketing efficiency by 3%. The average firm spends 11% of their revenue marketing, while only seeing 25% of pursued work turn into commissions. Client feedback informs you of your market successes, and identifies where your strengths are. By marketing your strengths to your best market sectors, results will increase and you’ll waste less pursuing work that doesn’t match your firm’s core services. Even a 3% increase in efficiency will save a $10 million firm over $33k a year.
- Reduce the size and frequency of loss claims by 10%. XL Insurance professional liability insurers found the typical firms spends about 2% of their revenue defending loss claims – time spent not billing, gathering evidence, lost credibility – etc. Even though your insurer tends to cover actual losses, you’ll spend hours of effort in your defense – rather than billing on a project. Randy Lewis, Loss Prevention and Client Education at XL Insurance, states: “I have seen few better ways to reduce the size and frequency of loss claims as your Client Feedback Tool.” Savings here add up to more than $22k annually.
- Save on liability insurance. XL Insurance has a program, the Loss Prevention Improvement Project, by which you can implement a plan to reduce liability. Firms have used our Client Feedback Tool as the foundation for this, providing a 10% credit for their premium. A $10 million firm, depending on project types, will see about $8k in credits.
Adding this all up, a $10 million firm may see over $210,000 in value added or money saved from effectively leveraging client feedback. Regardless of revenue, the typical firm will increase profits 13% applying these simple tools and strategies.
Feedback is easy with a simple and powerful system like The Client Feedback Tool. Two minutes of use brings immediate and measurable results.
Posted on October 26th, 2010 View Comments
The Zweig Letter Hot Firm Conference is an annual, 2-day event for growing A/E firms that features top design and environmental industry executives, entrepreneurs, authors, and many others who gather to share strategies for success, learn tactics from their peers, and leave with renewed inspiration for another successful year.
If you’re attending this event, please join Mike Phillips for his brief session on Client Feedback on Thursday, October 28 at 9:45am, directly following Ed Friedrichs’ presentation, or stop by the Client Feedback Tool Sponsorship table and say hello.
For more information on the event visit http://www.zweigwhite.com/events/hotfirm/index.asp.