I recently had the opportunity to deliver a webinar, The Role of Client Experience in Driving Revenue, and asked several questions of attendees. One query was about how much of their work came from existing clients, and to no one’s surprise, the most commonly-cited range was 80-89% (52% of respondents), followed closely by 70-79% (28% of attendees). This aligned with two common statistics that I've repeatedly seen during my three decades working in the AEC market space:
- 80% of a firm’s revenues comes from existing clients (aka, repeat business)
- 20% of a firm’s clients represent 80% of their revenues
With regard to the latter statistics, the recent 2021 Deltek Clarity Report found that, on average, a firm’s Top 3 clients account for 37% of annual revenue. (Last year the same report found a figure of 42%.)
However, it was another question of webinar attendees that left me somewhat shocked:
- 11% of participants stated that their firms currently have a formal Client Experience plan in place
In 2019, I led research for the Society for Marketing Professional Services (SMPS) that resulted in the report Marketing 2022: A Survey Exploring Current and Future A/E/C Marketing Practices. That research found that only 18% of firms had formal Client Experience plans in place, but by the end of 2022, 54% of companies expected to have this type of plan in place.
Anecdotally, it didn’t appear that this was going to happen. Perhaps it was wishful thinking by survey respondents. Maybe it was due to COVID-19, which scuttled many marketing strategies. Most likely, it was a combination of both.
This informal webinar survey seems to indicate that employing a robust Client Experience strategy to drive revenue still does not enjoy wide acceptance within the AEC industry. Furthermore, because the SMPS research largely centered around firms with SMPS members, the drive to develop Client Experience plans may very well be marketing-driven. This certainly isn’t a negative, but does demonstrate the risk of non-marketing-driven firms falling further behind their competitors.
Business-to-Consumer (B2C) industries totally understand and embrace the importance of Customer Experience. As I type this blog, I’m sitting on a Southwest flight en route to meet with a client. (Yes, in person!) Southwest Airlines may be considered a relatively no-frills airline, but they continue to be one of the most successful airlines in the world because of their commitment to Customer Experience, which includes an extensive network of routes, staff with a sense of humor, a great on-time percentage compared to the competition, lower cost flights (often, not always), and a simple app that makes the experience of travel seamless – from buying airline tickets and renting cars to using your phone for boarding passes. Oh, and the whole “two bags fly free” thing. (Alas, no wi-fi on this flight ... so I bump the experience down a notch!)
In 2020, Travel+Leisure Magazine reported on results of an airline quality rating study, which found that Southwest experienced a customer complaint rate of 2.64 per 100,000 passengers, the lowest of all airlines. The worst-performing airline saw a complaint rate more than 18 times higher. Furthermore, a 2020 J.D. Power survey ranked Southwest Airlines top in customer satisfaction for both long-distance and short-distance flights. They clearly get Customer Experience right.
Far too often AEC firm leaders believe that Client Experience lies in the purview of their marketing departments. Certainly, marketing plays a crucial role in Client Experience. As does business development. And project delivery. And negotiation. And billing. And every single interaction your firm has with a “client” - including the interactions before an organization becomes a client, and the ongoing communications with them after project completion.
Mapping the Client Journey
This is known as the client journey, and a highly-effective component of any Client Experience strategy is mapping the journey a client takes with your firm. How are they interacting with you? What actions are they taking? What is driving those actions? What are the underlying emotional drivers that may be impacting the things they are saying and doing? What are the pain points they happen to be experiencing at each step in the process? And finally, how can your firm add value to every interaction? After all, if you are not adding value, what is the purpose of the interaction? How is it worth the client’s time and attention?
To understand Client Experience, you really need to understand the journey first. And one size does not fit all when it comes to a client’s journey with your firm. Every client has a slightly different journey, and the differences between market sectors / verticals may be significant.
Journey mapping is just one element of an effective Client Experience strategy. More holistically, the “experience” is the total of each and every interaction – in-person, telephone, email, social media, website, networking events, etc. For instance:
- If a client requests a piece of information, and you don’t meet their expectations for timeliness, you’ve created a negative experience.
- If the mechanical contractor in the field is awaiting an RFI from the structural engineer regarding roof-loading capacity, and the structural engineer is not timely in the response, there’s been a negative experience.
- If your project manager is having a bad day or is overly-stressed or simply didn’t get enough sleep, this could “leak,” which means that he or she may be curt with the client, or something worse, creating a negative experience.
Research from PWC found that in the United States, across all industries, 17% of customers will leave after a single negative experience, while 59% will leave after a few negative experiences. (Globally, 1 in 3 customers will leave after a single bad experience.) Why should we care about this? Buying behaviors between products, services, and professional services are increasingly becoming aligned.
Furthermore, the competitive environment is not easing. M&A activity brings mega firms across your town or street. Unhappy employees leave and take clients with them. Entrepreneurial professionals launch new firms with lower overhead and new ideas (and maybe some of your clients). All the while client loyalties are changing – perhaps your primary contacts are retiring, or purchasing departments are now requiring three “bids” after years of just handing you work.
In other words, it ain’t getting any easier to keep clients coming back again and again.
New business development is critical to firm growth. However, too often AEC firms focus all their efforts on landing new business, and not enough resources toward turning their existing clients into happy, raving fans.
Client Experience Strategy
If you want to maintain your market share, much less grow, it is imperative that you dedicate time and resources toward creating positive Client Experiences with each and every interaction. To do that, develop strategy around the many elements of Client Experience, some of which include:
- Conducting client research (qualitative and quantitative)
- Creating client journey and empathy maps
- Building strategy around specialized focus areas
- Developing ideal client profiles
- Understanding your clients’ clients by gaining advanced industry knowledge
- Gaining in-depth knowledge of every client
- Implementing Account-Based Marketing (ABM)
- Revisiting your project management practices
- Developing client onboarding programs
- Improving communications among team members and with your clients
- Integrating your technologies with the technologies your clients prefer
- Increasing the engagement of your employees
- Innovating and diversifying to respond to client and marketplace needs
- Training staff how to be better communicators, creative thinkers, and emotionally-intelligent professionals
- Aligning your marketing and brand with the “real you” — clients expect the marketing hype to be true: is it?
As you can see, Client Experience strategy goes far beyond marketing and really permeates everything your firm does. As you look over this list, can you truly say that you are regularly addressing and improving these items? Or do you merely pay them lip service or, even worse, totally ignore some of these areas?
The SMPS research previously referenced found that Client Experience will soon be the single most important sales and marketing strategy among AEC firms, more important than networking, thought leadership, branding, and personal selling. You can be sure that your competitors are looking at ways to improve their Client Experience strategies, which in turn will make them a more attractive option when they come for your clients. Make no mistake: they are coming. Will you be prepared?
How are you addressing Client Experience strategy at your firm? What other elements to you consider part of Client Experience? Drop me a note - I'd love to hear about it!