There’s a famous scene in Rocky II where Rocky Balboa is scrambling around in a fenced yard between Philadelphia rowhouses trying to catch a chicken during an old school speed training session. His trainer Mickey is, of course, in the background hurling insults in that famous gravelly voice. Upon failing the task on the first attempt, a defeated Rocky says, “I feel a Kentucky-Fried idiot.” So what does this have to do with business development?
It’s astounding to me how many construction and design firms run around like “Kentucky-Fried idiots” pursuing projects, prospective clients, and market sectors that will never materialize. That sounds harsh, but this is The AEC Straight Talker Blog after all.
A Common Problem for Construction & Design Firms
A/E firms and contractors have a great deal in common despite the obvious differences in professional selections versus bidding. The marketing and business development effort is utterly exhaustive on both sides including identifying leads and decision-makers, targeting marketing efforts, cultivating the relationship, submitting proposals or bidding, and interviewing.
A/E firms tend to run up against hard realities such as prospective clients that shamelessly award work to one or more firms; politics; and owners and facilities managers demanding free work or lower prices, or else. It’s a very subjective process with lots of gray areas.
Contractors, on the other hand, run into firms that consistently bid low, identify a competitive advantage, or possibly even pull a rabbit out of the hat. Those firms are usually making strategic decisions to take on risk in order to gain traction by bidding low. How they do it is usually an unsolved mystery.
Track or Get Fried
I sat down last year with some architect colleagues to evaluate their needs and see how we could assist them with marketing. It’s a small, but established and well-run practice. One of their concerns was that they had no idea where they were winning and losing work. They were so consumed with operations that they had no time to look in rearview mirror. It’s a common problem, especially with smaller firms.
I’ve been there and faced that issue. A/E firms in this position fritter away a meaningful portion of their marketing budgets chasing dead leads. If you don’t have a handle on what you’re spending to pursue work by prospective client, you’re spinning your wheels in the mud.
Let me hit you with a harsh reality. There are prospective clients that will never select your design firm for a project and there are some construction firms that you will not beat until they change their bidding strategy. Tracking will allow you to bring those realities into perspective and take corrective action.
Keep Tracking Simple
Tracking doesn’t have to be complicated. I had a business development colleague who spent countless hours developing multiple spreadsheets to track down to the level of what percentage of projects were won by category. What an utter waste of time.
Tracking is passive; pursuing work and taking corrective action is active. While tracking ensures that you’re pursuing the right clients and lines of business, it doesn’t generate cash flow. It’s an overhead drain. Keep your tracking simple.
You need to be able to some answer basic questions. What is our hit rate by client? Are we being outbid by a certain contractor, and if so, where and how often? Is there a certain market sector where our prices just aren’t competitive? Is there a prospective client that consistently doles out work to one or two firms? You need just enough detail to allow you to make adjustments to your strategy.
You Can’t Win with Some Clients
There are two types of prospective clients: those that tell you how it is, and those that mislead you for a variety of reasons. I was lucky enough to find a few facility managers over the years with a penchant for straight talk. I really valued this rare breed because they respected me enough to give me the hard truth.
We all know that most prospective clients will not tell you the hard truth. They all have their own reasons for sugar coating reality. Sometimes they’re protecting your feelings. Other times they’re compensating for other realities beyond their control, i.e. politics. Either way, the hard truth remains elusive.
Knock Out the Bad Apples
There are prospective clients that simply waste your time. AEC firms have a tough time sorting the good apples from the bad. Firms that don’t take action are either ignorant to the problem or complacent in taking corrective action. It’s that simple.
There is no question that design and construction contracts take time to materialize. This is a relationship business with a long sales cycle, after all. The true challenge is being able to recognize the fine line between a developing relationship that may bear fruit and a prospective client that strings you along with no intention of selecting your firm.
Culling out bad apple prospective clients requires boldness, facing up to hard truths, and the ability to achieve consensus within the firm when it’s time to pivot. AEC firms need take the bull by the horns and restore self-respect by terminating dead end prospects now. Prospective clients that waste your time and string you along indefinitely have no respect for your firm and should be dismissed.
This is not boxing and you’re not Rocky so stop chasing around dead-end leads like a “Kentucky-Fried idiot,” champ!