Are you feeling the pinch of reduced fees and increasing salaries these days? You are not alone. Pressure on profit margins is causing many architecture and engineering firms to revisit their strategy and look for ways to differentiate from their competition.
Competing against 5 to 10 other firms for work with smaller margins is not what any of us envisioned when we started our businesses, and developing a strategy to combat this state of the market is paramount to developing a profitable firm.
The firms demanding the highest fees are the ones being sought out by their clients rather than the typical situation where you must fight to win every job. To reach the top of the fee ladder these days takes a specific focus on creating a brand that sounds, acts, appears and IS different from everyone else.
Here are six ways to start the process of reinventing your firm to be able to garner the higher fees that the most successful firms are getting:
1. Develop a New Strategy
The first step in the process is to figure out who you really want to be and create a strategy to get there. Many firms go on annual retreats and barely tweak their existing strategic plans. But differentiation requires thinking outside your current box and potentially changing course completely. A great source of ideas, inspiration and even approach is your clients and employees. Take the time before your next retreat to interview at least 10 of your best clients and ask them what their biggest challenges are. Your employees are also a great source that is often untapped in most firms. Employees are on the front line with clients every day and may be able to see opportunities that are not otherwise visible to leadership.
2. Use different language
In order to truly differentiate you can’t sound the same as you always have or like everyone else. If you go to your web site and then those of your competitors, you will see that most firms are using the same language. If you all sound alike then you are not different! Find creative ways to demonstrate your unique attributes through videos, testimonials, social media and the unique expression of your staff. The buying experience is different today – over 71% of firms are researched by their clients online before they have a conversation, so your online presence is critical to your ability to stand out from the crowd.
3. Focus on one specific niche
Many firms these days have diversified into so many industries and service offerings that they do not stick out in one particular area. The truth is that not all of these different areas are profitable. I recommend slicing and dicing your financial data to analyze which services and markets are the most profitable. This analysis should also be used when developing your strategic plan. One way to easily accomplish this is to create custom fields in your project accounting system and group project profitability reports by these fields. Numbers don’t lie and are what is needed to objectively analyze what is working and what is not.
4. Create premium content
When your clients have problems to solve they often go online to find experts to help them solve them. Is your firm a known expert? The key to getting known on search engines is to create content that speaks to the keywords and phrases that your clients are searching on. A good inbound marketing expert can review your firm’s qualifications and analyze keywords to determine what your potential clients may be searching for. Then you need a strategy to develop regular relevant content, such as a blog or LinkedIn posts, that can be found online.
5. Get out and speak
Another great way to be found by your clients is to speak at events, conferences and meetings that they attend. Face-to-face relationships are still the best way to get new clients in the A&E industry, and being recognized as an expert by speaking is one of the best ways to be sought after.
6. Get your employees aligned with your mission
Your employees represent an army of goodwill out in the marketplace. The more they speak the same language, and understand the mission and purpose of your firm, the more they will be able to represent the firm effectively in business development and sales scenarios. Empower your team to be the ambassadors of your firm’s mission and see the effect this can have on your client’s perceptions of your firm.
The A&E industry is more competitive than ever which makes it critical to differentiate your firm and intentionally elevate your stature above the masses of firms that have accepted themselves as commodities.
Cash is King Webinar
Managing Cash Flow in a Down Economy
Date: Wednesday, August 19th, 12:00pm ET
The average days to collect cash in the AEC industry is between 60 to 120 days. In this web training we will examine the complete project lifecycle to understand how cash flow can be increased when the economy is uncertain. Participants will gain valuable tips to improve cash flow by improving timesheet practices, reducing the billing cycle, and improving client relationships and collection practices.
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