More Competition, Fewer Resources
Understanding your real marketing costs for the pursuit of a project is very important. Firms have limited resources so it is important to make the most of what you have.
In 2012 the Association of General Contractors (AGC), in conjunction with FMI Corporation, published a report based on a comprehensive survey they conducted. It was focused on gaining a better understanding of how firms view and execute business development differently in today’s environment when compared to their experiences during the boom years that preceded the great recession. *
This comprehensive survey revealed several trends that have continued over the past few years.
Profitability has trended downward – many respondents stated that they are less profitable or are only breaking even.
So… HOW DO YOU WIN MORE WORK?
Developing a strategic business development plan that is in-line with your business plan is very important. Within this plan a budget should be established and a method for tracking costs implemented. One of the costs firms should always track is the cost of pursuing projects. Tracking only the cost of proposal preparation limits your ability to fully understand the real cost of winning projects.
Only GO When You Can Win
Firms should never submit a proposal if they do not have a high probability of winning the project. This isn’t smart business and will consume your marketing budget. Unfortunately, many firms continue to stick with what they know, reacting to shrinking hit rates by increasing the number of proposals they submit. Their marketing resources are being devoured in the preparation of shotgun boilerplate proposals that fail to get them to the shortlist. This also leaves them with inadequate resources to retain and develop clients, the most successful way to win new projects.
I frequently run into AEC Industry marketers are burnt out and frustrated because all they do is crank out proposals with a very low hit rate. It is no surprise that turnover in marketing departments is high, costing firms even more in the long run.
Bill Eveloff, Vice President at Petra-ICS described for me a consultant selection process he had participated in. He said that his company invited ten firms to submit proposals. He described his first cut as being easy because he just threw out the proposals that read like boilerplate. He then reviewed the remaining proposals and selected three firms to interview based on relationships and client-specific content.
Going into the interview he said that all three firms were equally qualified and would do a good job if selected. The firm that was ultimately selected came in with a high level of project knowledge, who demonstrated their “all-in” attitude about the project, presented their thoughts that related specifically to Petra's issues, and ultimately delivered an interview that felt more like a charette than a formal presentation.
Gary Coover, in his book “Secrets of the Selection Committee”, also describes how boilerplate and sales content are a major turn-off to selection committee members.
Over-the-top claims, mindless clichés, meaningless platitudes that give no real information are all a major turn-off for any reviewer. Makes you look like you’re all hot air and no substance." - Gary Coover, Author of Secrets of the Selection Committee
Lessons Learned from a Proposal Veteran
In my experience, and I’ve developed over a thousand proposals throughout my career, the only way to win a project in our hyper-competitive market is to demonstrate knowledge of the client and project issues using text and visual content that is fresh and specific. Doing this effectively requires a capture planning process that includes:
Marketing professionals are personally invested in a firm's success. When it comes to project pursuits, we put our heart and soul into the chase.
Implement a Detailed Go/No-Go Process that Incorporates Division Budgets
Successful firms make smart go/no go decisions. The most memorable fact I learned while studying for the CPSM (Certified Professional Services Marketer from the Society for Marketing Professional Services) exam is: To win more projects, submit fewer proposals.
If you have tried unsuccessfully to persuade your executive team to implement a rigorous go/no go process, I suggest that you prepare a report for them that contains the actual cost of pursuing past projects with columns indicating whether you shortlisted and/or won. When you put this real data behind your arguments for a process change, it will make your dollar-wise firm leaders much more responsive to your suggestion.
Inevitably it will become clear to everyone that you won significantly fewer projects when a reactive approach forced a boilerplate response. It will also show the high overall cost of submitting any proposal. Moving forward, this forces firm leaders to address the go/no go process as a financial decision, opposed to a purely emotional one. Once firm leaders recognize the benefit of only submitting on those projects where you have a high probability of winning, they will focus marketing resources on the right projects for the firm.
The past few firms I worked for full-time used Vision for their accounting and time sheets. We created BD numbers for project pursuits and everyone involved charged their time to this number. This way we knew the real cost of pursuing projects, which varied significantly depending on the client and project type. For instance, private sector clients we had worked with before often accepted a contract style letter which cost relatively little. Qualifications-based selections run in the $5,000-$10,000 range, significantly more when an interview is required. For high profile projects, count on a minimum cost of $10,000, while most will run more than $50,000. With design-build and/or design competitions, costs can soar into the hundreds of thousands and even million-dollar plus range, which is why serious clients offer a stipend to firms not selected. And don't forget the legal costs associated with reviewing contracts.
Below is a partial list of the costs you should track in your marketing/proposal budget:
Team Photos NOT Mug Shots
A special note on team member photos. Clients want to know about the people they will be working with, so many proposals now include photos of team members. I implore you to keep a digital library with studio shots of your key team members. Update your library every few years to include new employees and changes in current employees. The most common complaint among dating site users is that the photos posted by potential mates were taken in a past decade, before baldness, gray hair, the extra 30 pounds, or biker beard was grown. Selection committees similarly deserve a true representation of team members and aren’t impressed by obviously severely dated photos. If you need a team member’s photo and don’t have one, send them to a Walmart or JC Penney photo studio for a quick digital shot that looks professional. NEVER USE MUG SHOTS! Mug shots are appropriate only when being sent to prison.
How Subconsultants Can Increase Their Profitability
If you are a subconsultant and want to be selected for more project teams, focus on how you can add value. Your ability to identify project issues that relate to your specialty will make the proposal that much stronger. Having worked almost exclusively for prime firms, the subconsultants I selected were those we had worked with before, had experience with the client, and/or other strong relevant experience.
When you are contacted to join a team, always deliver the information requested thoroughly and on-time. It is a big plus if you have a solid marketing professional in house who knows InDesign. This person can offer to format materials in the prime’s template. If a sub is non-responsive and the prime must chase down information at the last minute, there is a strong likelihood they will find someone else for the next project.
Many subconsultants need to step up their marketing departments if they want to be selected for significant projects. Here are some suggestions:
Photos of Your Scope of Work, Not Just the Architecture
When taking project photos, focus on getting great shots of your scope of work. The prime will need images relating to your specialty for both the proposal and presentation. Many subs rely on exterior architectural photos that can't be used by the prime if because firm who designed or built a relevant project is a competitor. If you are a mechanical, electrical, plumbing or structural engineer, take photos of your systems and structural details. Develop graphics that demonstrate innovative solutions and system performance. If you are a geotechnical or civil firm, have images of your work; yes, dirt and big trucks are cool.
* Although this study was completed over four years ago, the data provides an accurate profile of life in AEC after the recession. A full copy of this study can be downloaded online.
I know this is a long-winded post but this is a subject I’m passionate about. Anyone who has orchestrated the pursuit of a complex project as the prime consultant will understand that the true cost also includes our emotional investment. As marketers, in addition to the hard work and long hours, we put our heart and soul into the chase. It is tremendously frustrating when we are forced to pursue projects we know we have very little chance of winning. Being a loser totally sucks. We are in this business to win!!
Why the Goose?
Geese honk to communicate with the flock so they can preserve the "V" formation that enables them to conserve energy and fly for longer distances.
For more News From the Goose, please join our mailing list.
DEBORAH BRIERS, CPSM, MBA