Karl Feldman, a partner at Hinge Marketing, joins the podcast to talk about the findings in his firm’s Inside the Buyer’s Brain study, in which the responses of more than 3,600 buyers and sellers provide big insights into what buyers value when contracting with an engineering firm.

Click here to download the executive summary of the study.

Click here for a recent ACEC On-Demand Online Class in which Feldman presented the key research results of the study.  

 

ACEC:

Welcome to the Engineering Influence podcast, presented by the American Council of Engineering Companies.

Do you know what prospective buyers of your firm's services value? What do you know about their challenges or how they decide between you and your competitors?

Hinge marketing has addressed these questions in its Inside The Buyer's Brain report. This is the third edition of the study. The first two were published in 2013 and 2018. This latest version, which includes responses from nearly 2,000 buyers and more than 1,600 sellers includes data from the first few months of the COVID-19 pandemic, so it offers some good insights into what buyers are looking for from the engineering industry today. You can find a link to download the executive summary of the study in the podcast description below.

Here to talk about the study is Karl Feldman, a partner at Hinge Marketing, where he focuses on the A/E/C sector. Karl also presented an ACEC online class on the study, which you can stream on the ACEC website.

The big takeaway from the study is that buyers are looking for relevant experience when contracting with engineering firms. How granular does that get? Is it enough that a structural engineering firm pursues a building project? Or does it have to go deeper than that?

Feldman:

That's a great question. And actually does go a little bit deeper than that because when we're speaking about relevance and I think this is an important takeaway for the A/E/C industry, pretty much across the board, it goes beyond the project experience. It's how well can we connect to our audience's issues? What's keeping them up at night and it may or may not connect to our specific project experience.

So, and this is a little bit of recency bias on my part, we were speaking to an engineering firm just this morning that one of the issues that came up again and again in primary research. So we spoke to their buying audiences. They had budget pressures and not budget pressures like we have to control project costs, but how do I get the right grants? Where's my funding coming from next year? What's happening in this market? Or the CapEx is going to be a large discussion and we're unsure where that's coming from?

So in one way, it has nothing to do with our project experience and in another, it's on us to help connect those dots more effectively. Like we understand that budget pressure. Here's how we can help, by having a solid work plan and thinking of how we approach this project and how we engage the community that can help you go out and get the grants that you need for this project. And then we become more than a commodity engineering service. We're a partner at the table and that's, that's key.

ACEC:

It sounds to me as if it's sort of like a personal relationship when someone has an issue, but if they don't tell you that's their issue, how do you find out that that's their issue?

Feldman:

That's right. You can do secondary research. Understanding and putting yourself in their shoes. That gets you so far. Certainly primary research, actually having a study to go out and speak to folks and keep your finger on the pulse, because it does shift, that's an important piece. And, I can share a little bit of context outside of A/E/C, even though that's kind of where I focus at Hinge--that's my subject matter expertise came out of the industry--but we speak to professional services across the board here, so I work with a lot of management consulting, accounting and finance, or even technology and legal firms. And when we look at this same study, at the buying behavior across those different areas, A/E/C is struggling with this point, the relevance.

Accounting and finance, for example, is an industry that's prime for disruption, with blockchain and technology and automation. They are really concerned about commoditization, downward price pressure, all those things. And in the past two years, they have been working like heck to increase their relevancy, increase their understanding, to know how do we connect to those broader issues as if you're having the conversation. And they've improved Management consulting and tech have also improved. Management consulting actually has had a lot of improvement. And that's largely in how they're executing tactics and communication.

But A/E/C has kind of stood still for the past couple of years. So we were dealing with growth. I think we've got growing pains and other kinds of landscape issues, but this is something that we as an industry should probably be turning our attention to. More even in the pandemic situation and what it looks like on the other end, it's going to be important to figure out what that means for your audience specifically.

ACEC:

I've been working in this field for 12 years now as a writer, and I do a lot of interviews with engineers. And engineers don't tend to get into the soft stuff. If you ask them a question, they will give you the facts and maybe a little analysis, but then they stop. So it seems to me, maybe there are two sides here that don't necessarily join up properly all the time.

Feldman:

Well, I have to have full disclosure here, half my family are engineers and I went to school for computer science, so it's a little different, but if you think about it to be successful in today's landscape, I think engineers actually have an advantage because what you do naturally, when you're speaking to someone and you're learning about what's keeping them up at night and the issues, that's kind of a natural face-to-face human thing, but to be effective in today's marketplace, you have to engineer it. You have to have an objective data-driven understanding of what are the issues and how do we intersect with solving them. And some of our biggest turnaround stories happened to be the engineering field exactly for that reason, because there's skepticism coming in. But once you have that methodology in place, it's powerful and it's actionable.

 

And in this study, you also see that the buyer dictates their own journey. They're doing their own research. So you have to be methodical and data-driven to understand: Our website needs to say this in this area, and our interview team needs to focus on this thing when we're in the final selection. That's data-driven, and it changes the firms that do the best with this. They do regular research. They have a strong methodology and business process that drives it. It's not like "Hey, I think you care about this." Or hand to hand. It is more methodical by nature. And that's one of the keys to success, I would say.

ACEC:

To that point, one of the findings in the study that struck me was that there's a huge disconnect between what buyers value and what firms believed buyers value. Let me just take a couple of examples here. Relevance, which we've been talking about, is the most important factor in the buyer selection process, but sellers, the engineering firms, only rank it as the fourth most important. And another one is a talented staff. Buyers say that's the third most important thing, but sellers think it's the eighth. How, how do we have such a misunderstanding between the two sides here?

Feldman:

Well, as a point of context, we'll start with this study looks across the board. So this may or may not be a hundred percent accurate for your audience. Whoever's listening or considering this, there, there likely are some nuances and differences, but this is a great place to start. What we see the most of is...It's not that we're completely out of the ballpark, that we don't have any idea what our audiences value or care about. A lot of the time, it's where it matters. The thing that matters in the evaluation process, or when an audience is just learning about an engineering firm or trying to solve a specific problem. Those things are often different, what they value then versus when it comes time to choose after they've got the selection down to two, three firms What's going to make the difference That's often a gap when we do the direct research with teams. It's what's important when. And it's easy to get those mixed up and then throw in there the landscape changes and these issues shift. I mean, with this pandemic in a lot of ways, we've seen the same trends accelerate. So it's not surprising to us, but on the other hand, some of those issues and the weight of some of the issues, have totally changed.

ACEC:

It would seem to me that a talented team would be a no-brainer though. But here we have sellers putting that as what they believe to be the eighth most important thing that buyers want.

Feldman:

If you think about it, there's always a tendency to look at it through your lens. What can we control? It's why one of the most common gaps we see is internal teams will put a lot of emphasis on project cost control, because that's painful. It's painful to lose that and it's something that we have control over. So we feel self-conscious about it. It is in some ways, an exercise of getting outside of your own team to look at it from the other side of the table,

ACEC:

Sticking with relevance for just another moment. You mentioned that the trends are accelerating, across the three surveys that Hinge has done. The importance of relevance has basically doubled from 19% of buyers saying it was very important to them in 2013, 30% said it was very important in 2018, and now 40% say it's very important. What do you think is behind that?

Feldman:

It's a lot of things, but I'd say probably the biggest driver is the way that we communicate and make decisions. And I mean that both on our side of the table, as engineering firms, and the buying audience. So we were talking about relevance and how you gather information and what really matters. How do you connect with that? And I mentioned websites as a kind of self-guided process. Let's say there's not one key decision-maker, but maybe a group of 10 or 15 in your buying audience. And they collectively are making the decision. They're all going out from different perspectives and validating either a good reference that they heard for your team or what's important to them from their perspective, and your communication channels have to answer those questions spot on every time. And so that's where that systematic approach really comes in.

 

And we haven't stood still as an industry, in terms of doing the activities, adding the content, speaking more effectively about ourselves, and adding more of the work experience. Those things have increased the amount of investment that we put into things like websites or having teams post on social media. That's increased. So there's more access to that information. And so there's more drive. There's more expectation that I, the buying audience, am going to get the answer that I'm looking for and that it's going to be exactly what I'm looking for. And if you don't, then you're not the best performer out there, and I don't have what I need to make a decision in your favor. And so that level just keeps increasing. Technology and communication drive it and generational kinds of approaches drive it. So there's a lot of factors, but I think a big piece is just the way that buying process has changed. That's really the biggest driver.

ACEC:

And I think your last point there about, that I want exactly what I want, It's sort of like with Amazon. W can now get exactly what we want when we buy something.

Feldman:

And that expectation for that deep level of expertise just keeps leveling up. There are great teams out there that have not always been good at, or even putting in the effort, communicating that. Now they do. Now the access is there. So the Goliaths compete with very specialized, fast-moving disruptors, and the disruptors deal with Goliaths that have unprecedented reach and just domination. So it's kind of the landscape that we live in.

ACEC:

You've mentioned a couple of times in the conversation about commoditization. It's a huge concern for a lot of engineering firms. They worry that their services are being commoditized. In this study, what are the lessons for avoiding becoming commoditized?

Feldman:

Well, relevance. We'll keep flogging that one. That's important. Understanding is number one. How you connect with it as number two. Learning the ways, as a team, to be consistent with how we connect and communicate. That could be before we sign a project, as we deliver work, making sure that we're staying there, that we're reinforcing the value we're bringing, what other complementary services might be available, the expertise that was put onto projects. All of that is important. And I think that's in the study. When we were going through what are the big takeaways, that's why relevance really stood out, because without that, if we stand still there, we run into that downward price pressure. And when we looked at the differences between what the selection criteria were for highly relevant firms versus low relevance firms, you can see that like night and day. The lower relevance firms were chosen based on price, were chosen based on customer service or flexibility. Those are the things that you have to do when you can't differentiate in any other way.

So there are lots of roads to relevance. And you see it really intriguing with pushes into technology, hybridization of delivery, greater understanding, and better communication skills across the board. Lots of paths there, but that to us is really the key, the key to avoiding that downward pressure. And I think unlike accounting and finance and all of my accounting, finance friends are going to freak out and come after me now, A/E/C, and engineering specifically, I think has an advantage in that the expertise they bring moves so fast. There's always a new frontier to conquer. So it's more of a matter of how we approach it than an inherent disruption that's going to hit us. I think accounting/finance is rightfully challenged and focused on how do we bring the human equation and strategy to this because it is facing a lot of pressure from technology. It is being disrupted. I think we are the disruptors in a lot of ways. So we just need to learn how to human better. We need to take an engineering approach to communication and we'll get there.

ACEC:

What about good old-fashioned being friends, meeting at the Rotary Club and making connections there, and having a customer that you've had for years or for decades? Is that still a way to be relevant?

Feldman:

It's still valuable. Cultural fit--are these the right people that I can see myself working with?--is of course going to be important. The question is how and where you relay that. A lot of the networking used to be in person. Now it's happening on LinkedIn. There are virtual events. There are different ways to do that. There's the second-hand reading of articles, and even that becomes a way that you get to know folks or you introduce different personalities. And it is more teams getting to know others, so it's a little more fragmented. In some ways, it's more personal and in other ways, it's less, but it's what the world's going through. Cultural change and adapting to the technologies that we've just kind of put out there. So, there'll always be a place for that connection, that only makes it stronger, but I think in the same way that we talked about the expectations going up, those expectations will climb as well. How well does your team know me? Do they understand what we're going through? Do you understand we've got, for example, this one or that one out on maternity leave, or we're having real challenges with adapting to remote work? That becomes a badge of honor and acknowledgment if you understand and can relay those things,

ACEC:

You mentioned remote work and virtualization. One of the points in the study is that client loyalty is at the lowest point among the three surveys that you've done, in 2013, 2018, and this on. Is that a factor, that we're not seeing each other face-to-face?

Feldman:

I think it's less that and more, it's the other side of the relevance coin, right? It is there are so many options and the expectations are so high. Why not shop around? As you described, it's that the Amazon conundrum, right. We have such amazing communication and tools and you know exactly how to solve this specific problem I'm having in this wall. That's what I expect. And if you can't do it, I'm going to look around and find someone who's really good at that.

ACEC:

That makes sense. And again, to combat that as an engineering firm, you have to make sure you're relevant.

Feldman:

That's right. That you're connecting the dots. That's what it boils down to.

ACEC:

One of the things that you did mention that intrigued me in the study, as well as in the online class that you did, was that buyers are putting a lot more value on strategy planning issues, which you described as helping them pivot their businesses in these difficult times. How does that apply to engineering firms? What value does an engineering firm bring to that situation?

Feldman:

It varies, it varies depending on where you intersect with an audience, but it actually goes right back to the beginning of our conversation when I was giving that example of how you connect if budget pressures and funding is an issue. Does your firm have a seat at the table as an expert advisor? You're not there for everything. You're not going to solve all of it, but from an engineering perspective or the pieces where you're relevant, are you providing valuable information at the strategic planning table for your audience? That's the Holy Grail. And especially in times of change, upheaval, and disruption, there's even a greater premium on that. You'll be building trust that will last for decades. If you have a seat at that strategic planning table, you're going to be relevant.

Feldman:

Engineering firms think about it and we hear it all the time that we want to get involved with projects as early as possible. Then we know where we can drive. And I think the question to ask is how do we get a seat at that table? What are we being asked there for? Have we built the relationship and given the validation that we need to be invited to that conversation? And part of that's understanding what are the macro issues that an audience is dealing with and breaking that down.

ACEC:

It would almost be as if you want to be invited to the table when there isn't even a project on the table,

Feldman:

That's right. Hey, we're considering this. We're not sure if we're going to go here or there, but we'd really like your perspective because we know you understand resilience in our community and what we need to be doing in this space. What's your perspective on this? That's exactly right.

ACEC:

To close it up. You've done three of the surveys now. What, what are your thoughts or your optimism about how the engineering industry has developed over the course of these three studies?

Feldman:

Not to play favorites, but I do think that the engineering community has a tremendous advantage, in methodology and how we as a community solve problems. I think it bodes very well for the kind of technology and communication that's really rising to the front of the queue across professional services. I anticipate in a few years, other verticals are going to be looking to us for how we applied that, because I think it speaks well to the personalities that we have in our community. We're thoughtful. It is kind of an engineering approach to communication that we've been talking about today to be effective. You don't need to be as warm and fuzzy, but you do need to be relevant. You do need to understand and help solve and be a partner in solving that problem.

Feldman:

And there are different levels. There are different cultures within the community, but I think at its core, that engineering approach-- I'll say from Hinge's perspective--that bodes very well because it's data-driven. That's one of the reasons I partnered in HInge. We're so data-driven. But one of the partners here is also a behavioral scientist, so matching that kind of human understanding, and people are illogical, but building that into a framework of data and what channels, and what's the considered approach to have these conversations at scale. That I think is the key. And looking across our verticals, engineers are very well positioned to take advantage of that, but we've got to get out of our comfort zone a little bit. There are skills to learn. There is more frequent research to be done. We have to shake up our assumptions. And I think on some level that's fun and exciting for engineers, but some of those assumptions that it's relationships, that we're going to get repeat work, those types of things. We have to shake that up a bit.

ACEC:

Well, great. I appreciate your taking the time to speak with us.

Feldman:

Thank you, Gerry. I really enjoyed it. And I look forward to having this conversation in a couple of years and see what progress we've made as a community.

ACEC:

As I mentioned, you can find the link to download the executive summary of the study in the podcast description, as well as a link to the online class that Karl presented.

 

 

 

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