“Taking these steps could help you get more focused on the right clients and projects and that could lead to more success over the long (and short) term.”
I was talking with an old client the other day about their business. They had gone through an ownership transition and the “new” management (although most had been there for the majority of their careers) wanted to get the company back onto a growth path after too many years of being the same size.
It became immediately apparent that they needed to do a better job defining their market areas of focus and targeting specific clients to pursue. Here are some steps to help any company that wants to do this:
- Figure out what you do well and what you make money on. My experience is that these two are usually the same, but not always. For example, years ago, I was working for an engineering firm that did a study of projects performed in each of about 10 market sectors. One thing we learned was that although they had an extensive resume in higher education projects, we consistently lost money on them. So higher education was NOT one of their market areas of focus. In another case, a landscape architecture and planning firm we worked with looked at marketing costs as a percentage of revenue and determined that for one small area they worked in (ecotourism), marketing costs were nearly 90 percent of revenue after three years of making this one of their targets. It was determined that it was time to pull the plug. The same sort of analysis can and should be applied to specific clients. Know your data – how much work you are doing, what it costs to get it, and whether or not you make any money doing it.
- Once you figure out the markets you can serve well (and profitably), put a list together of every single client that fits into that market definition. Most AEC firms do not take this step. Their target client lists have huge gaps in them because no one ever bothered to research and define a complete list. Or, management may have the false notion that only potential clients they have sat in front of, or those they know for sure have projects and funding for them, should be targeted. Not the case. You want a complete list here.
- Now that the target markets and clients that make them up have been determined, it’s time to figure out which of those clients are the best long-term prospects for work. This takes some research. And in these cases, extra efforts must be applied to be sure to identify all decision makers and potential influencers of a selection process. And the marketing and business development plan has to include specific (and sufficient) steps to be sure every single one of these people is aware of the firm and thinks favorably of it.
- Now that the target markets and clients are identified (and there is usually much, much more potential in them than the typical AEC firm realizes at first blush), it may be time to take another look at the target markets and ask yourself which other markets wouldn’t be too difficult of a stretch to expand into. For example, healthcare-focused architects may decide in some cases that the higher education market is one they should explore. Reason being, they may have done healthcare work on university campuses so client knowledge and relationships to exploit could already be there, making non-healthcare, higher-ed work a logical extension for them.
So how are you doing here? Taking these steps could help you get more focused on the right clients and projects and that could lead to more success over the long (and short) term.
Mark Zweig is Zweig Group’s chairman and founder. Contact him at email@example.com.