Risk, Reward, and Research

Scott Butcher, FSMPS, CPSM
Posted on: 10/04/17
Written by: Scott Butcher, FSMPS, CPSM
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When I joined the A/E/C industry in the early 1990s, I had several seasoned marketers tell me that architecture, engineering, and construction firms tend to be “a few years behind trends.” Twenty-five years later, that still holds true.

Many firms are just now embracing social media. Or realizing the value of a website with “responsive” design (If you don’t know that term, you are a few years behind the trend!).Or understanding how expanding the service/product mix can open new markets. Just look at all the nontraditional A/E/C firms now operating in this market space.

I’ve met design and construction firms of all shapes and sizes that don’t prepare marketing plans—some don’t even have strategic plans! I guess if you don’t have concrete goals, you never have to worry about failing to meet them.

Of course, how do you know where you are going if you don’t have a map (or GPS)? It does feel like more firms are finding value in strategic and marketing planning, at least compared with a decade or two ago. And yet, an area where firms continue to struggle is research: market research, trend research, prospect research, competitor research…

Research is time-consuming. Research can be difficult. And few firms actually have staff members with the term “research” in their job descriptions.  Yet without meaningful research, how can you plan for the “today,” much less the future? Can a strategic plan or marketing plan be that valuable if it is not informed by research? It can’t. The foundation of successful planning is research, and without it the structural components of your plan are bound to collapse. But what should you be researching? Here are some things to consider:

Prospective clients. For firms currently conducting research, this is probably the most common. If you’ve ever subscribed to an online directory, or purchased a thick book listing companies and institutions, you’ve taken the first steps in this process.

Strategic clients. These could be existing clients, or “A-list” prospects. Most firms in our industry follow the Pareto Principle, with 80% of their work coming from 20% of their clients. Is this the case for your firm? If so, you need to figure out which clients/prospects belong in that 20%—and whether some of your clients are truly “strategic.”

Competitors. I’ve heard executives say “I don’t care about the competitors — only what we can do for the client.” But if you don’t understand who your competitors really are, and what value messages they are promoting, how can you possibility position your firm against them and determine points of differentiation for competitive advantage?

Economy. Yes, it really IS the economy, stupid! Always know what the outlook is. Is the market feeling bullish, or hibernating like a bear? What are the forecasts for growth? Are there certain geographic regions that are doing better than others?

A/E/C industry. What’s happening closer to “home”? How is our industry doing? Look at the PSMJ Quarterly Market Forecast, AIA Architectural Billings Index, Dodge Momentum Index, ACEC Engineering Business Index, ABC Construction Backlog Indicator, and other A/E/C metrics. Research design and construction trends—at home and abroad. What is coming down the pike? What are the leading firms in the industry doing differently than their competitors?

Target markets. What are your clients facing in their markets? Are they seeing expansion or retraction? What are the issues that keep them awake at night? Don’t just look specifically at your clients’ industries, but also look to your clients’ clients, as that’s a major indicator of the health of a given market segment.

Firm performance. How are you doing? Are your clients merely satisfied, or are they raving fans? Where do you excel, and what areas need improvement? Are there consistent root causes of issues? Survey your clients, but also look at your own internal metrics. Some project managers may be more effective than others. Some markets may be proving more fruitful. There may be a “sweet spot” when it comes to project size—not too large, not too small —where profit is maximized.

Research must be a critical component to your business strategy, as it not only minimizes risk, but also allows you to maximize the rewards. With research you can gain a competitive advantage, spot trends before the competition knows of them, and position your firm to react to them.

Research helps you understand the markets you are facing, as well as the economic conditions headed your way. Armed with this knowledge, you can focus on the markets of the future, tweak your service or product mix, and determine which geographic areas make the most sense. Play to your strengths, minimize your weaknesses, focus your go/no-go decisions, and fix the areas needing improvements.

Only once you have completed this research can you lay the foundation for a successful marketing strategy and strategic plan. Remember the famous Louis Pasteur quote: “Chance favors the prepared mind.” Is your mind prepared?

About the Author: Scott Butcher, FSMPS, CPSM leads the marketing and business development programs for JDB Engineering and affiliate companies. He also serves on the company’s board of directors and chairs the inter-company professional development committee. Scott is a prolific author, having published 13 books and currently completing his 14th and 15th titles.  

THRIVE.jpgScott Butcher is presenting the session, The 21st Century Marketer as Firm Administrator: The Many Ways Marketers Contribute to Your Firm's Overall Success, at PSMJ's THRIVE 2017 taking place October 3-5 in Denver. Are you ready for two high-energy days of inspiration, networking, and fun? THRIVE 2017 is your chance to learn, to network, and to get an eye-opening perspective on what the world’s most successful A/E/C firms are doing right now to thrive. This unique annual event attracts senior-level executives from a wide range of A/E/C organizations located around the world. 

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