As I talk to leaders and marketers in the A/E industry, either directly or when I’m speaking or attending industry events, one of the things I’m starting to notice is a sharp contrast between leading edge firms and other firms when it comes to how they approach marketing and business development. I call it the Growing Marketing Divide. The leading edge firms are having some of their best years ever. The trailing firms are participating in a slow race to bankruptcy.
The Recession and Its Responses
There was a tried and true approach to client acquisition that most A/E firms had applied for years and years. It combined a mix of tradeshow marketing, networking and relationship management to create a healthy dose of project opportunities with a clearly defined process (and team) to generate and prepare proposal responses. This model worked quite well for a long time.
It worked through all the ebbs and flows of the natural cycle of the U.S. construction industry. And, it worked fabulously during the excess glut of building that occurred in the mid-2000s. But, that artificial peak spawned a massive trough that was the Great Recession. Suddenly, this model started getting stressed. In fact, it got a lot stressed.
(For more on this, check out the webcast, Perfecting the Pivot presented by Creative Growth Group, FMI Consulting and ENR earlier this year — this graph was shared by Rusty Sherwood at FMI).
How did firms respond? A lot of firms just ratcheted it up the existing model. Dial up relational building efforts and crank up the proposal machine. They got even more serious about pursuing commodity-like work in a commodity-like way.
The leading edge firms did something entirely different. They looked at the situation sideways and said, “We’re going about this the entirely wrong way. More of the same tactics will just get us more of the same outcomes. But, those outcomes aren’t looking so attractive lately. We need a new way of thinking about this problem.”
Aspects of Marketing and Business Development in a Leading Firm
First and foremost, the principals in these leading firms recognized intuitively that the traditional model was upside down. That the market dynamics had changed. That the situation required approaching the problem from a new perspective with a new model.
When you look at the traditional marketing model applied in the industry, it relies on leaders and business development people to network like crazy to create opportunities. Then, use marketing as a support function once an opportunity arises. But, when capacity greatly exceeds opportunity (as it did for just about everyone during the recession), buyers have no time for relationship building — there are too many people asking for that chance. This traditional model became more and more inefficient. And, it became that way quite quickly — possibly over the course of just a few years.
Leading edge firms began fashioning a new model. Here are some of the characteristics of these firms and that new model as I see them:
- Knowledge > Fees: They’re recognizing that success requires that they compete not only on what they’ve done, but more importantly on what they know. They’re choosing to compete on knowledge.
- Firms > Projects: As a result, they’ve embraced a critical insight — a successful firm represents more than just a bundled collection of past project successes. To compete on knowledge, the firm’s marketing has to represent both the firm’s people and its unique perspective. It has to operate further upstream in the buying cycle — they’re trying to create demand and attract potential clients the firm DOES NOT already have a relationship with.
- Marketing + BD: In these firms, marketing and business development are working closely together to strategically identify the markets, clients and projects where the firm has BOTH depth in expertise (demonstrated as a tangible, unique and valuable point of view) and in experience (proven project outcomes) to be successful.
- Content + Relationships: They’re working together to “get left” of these clients — to engage them well before the RFP with a targeted combination of valuable marketing content and relationship-building activities (credit: Ryan Farias at SMMA for this wonderful metaphor).
- Marketing = Content: Marketing is responsible for producing tangible, useful educational content that positions the firm as an expert in the eyes of its most ideal client (check out Array Architects to see how this is done correctly).
- Research > Marketing: They use market research to build both a practice advantage and a marketing advantage. Take a look at PGAV Destinations to see how to do this correctly (credit: Chris Parsons at Knowledge Architecture for this simple way of thinking about the role of research in a firm).
- Go / No Go: They have a well-documented go/no go process. It’s well defined. They stick to it and extract the emotion from decisions. It’s business. In situations where they decide to forgo the process, they recognize the transgression, document the reason why, and move forward. (Read Bernie Siben’s stuff to understand Go/No Go).
- CRMs Aren’t Evil: They recognize that CRM is not a necessary evil. It’s a critical resource used by marketers and business developers together to make intelligent, informed decisions in all the critical areas of their business. They’re noting the major gaps in their existing data and they’re working as diligently as they can to close those gaps — quickly.
- Try New Things: Relative to other A/E firms, they’re early technology adopters. They’re investing in new ways of working. They’re investing in social intranets, like Synthesis, to connect their practices together across disciplines and geographies and create a model for knowledge to flow and innovation to happen. And, they’re testing out marketing automation to drive greater insight into their marketing and business development efforts.
It’s a great time to be a marketer in this industry.
- Geographic limitations are collapsing — really good clients are more willing than ever to partner with a firm anywhere in the world if it has a unique and compelling perspective that can help them.
- Technology has made it much easier for firms to build and market this perspective than ever before — firms of all sizes can now compete on knowledge and thought leadership in ways they simply couldn’t have just 4-5 years ago.
The real question for most firms is will they do what needs to be done to be on the right side of this divide?