Summer is in full swing, but it’s not too late to start developing a solid business strategy for the Fall, so we’ll round out our snapshot of “A Three-Phase Program to Fast-Track Your Design Business for Profit.” Dr. Tami Hausman participated in the panel at the 2015 AIA National Convention in May, along with Lisa Henry, CEO of Greenway Group, and Steve Whitehorn, managing principal of Whitehorn Financial Group.
In this installment, Steve stresses the importance of strong relationships to build a successful practice.
Get into The “Relationship” Business
The financial success of any firm is built upon its personal relationships. However, many firms often fail to realize this basic truth. Firms spend an overwhelming proportion of their marketing budgets on the pursuit of new clients, rather than nurturing existing connections. This approach is outmoded and counterproductive, as projects from repeat clients constitute the majority of many firms’ businesses.
According to Donna Fenn, contributing writer for Inc. Magazine, acquiring new clients can be costly, while existing relationships are more reliable and profitable. In fact, repeat clients spend close to 70% more than new ones. By investing in its existing clients, firms earn trust and fortify alliances. For example, if an architect needs to renegotiate a fee during the design process, a long- term contact is more likely to give approval than a first-time client.
Trust, confidence and chemistry
Good relationships are about three things: trust, confidence, and chemistry. Firms benefit greatly from nurturing their best connections and letting go of those that aren’t working. If the chemistry isn’t there, then let it go. Parting ways with a big project client may seem counterintuitive. However, difficult clients waste resources and diminish profits.
If you’re still not convinced, think of it this way: The Economist’s “80/20 Rule” demonstrates that 80% of any businesses’ profits are generated by 20% of its customers. By keeping strong client relationships and discarding unprofitable alliances, firms free up time and energy to devote to their top 20% clients, resulting in greater financial stability overall.
Good relationships equal profitability
Architects can’t afford to spend time on projects that aren’t working, especially as they’re subject to unique pressures that often result in diminished budgets and strained cash flow. By recognizing that client relationships directly influence profitability and paying close attention to their best assets, firms can move forward with stability and confidence.
Steve Whitehorn is the author of the upcoming book, Ensuring Your Firm’s Legacy, and Managing Principal of Whitehorn Financial Group, Inc. The firm is the creator of The A/E Empowerment Program®, a three-step process that helps firms create a more significant legacy and empowers them to achieve greater impact on their projects, relationships, and communities.
Summer is the perfect time to do some strategic thinking, so we’ll continue our snapshot of “A Three-Phase Program to Fast-Track Your Design Business for Profit.” Dr. Tami Hausman participated in the panel at the 2015 AIA National Convention in May, along with Lisa Henry, CEO of Greenway Group, and Stephen Whitehorn, managing principal of Whitehorn Financial Group.
In this installment, “The Doctor” gives her prescription for communicating more effectively about your projects to win the next ones. And we’re particularly excited about this post because it’s the 200th for Design on the Haus. Go Team Hausman!
Communicate with impact!
Now that you have your strategic plan underway, you want to communicate more effectively. It’s essential to define your message(s) so you can differentiate your firm in the marketplace. Knowing your message or messages will point you in the direction that you want to go.
Mark Twain said that “Most conversations are monologues in the presence of witnesses.” But, sarcasm aside, clear and precise communcations is the cornerstone to any business. It sounds obvious, but we all know the kind of people who talk on and on and on and don’t listen, don’t we? My father calls these people “Books on Tape.”
But really good communication is a conversation between people. So whether you’re networking or selling or publicizing your work, you need to engage your clients and audiences – not talk at them.
This is particularly important in the AEC industry, because many clients do not understand exactly what designers do. It’s your job to educate them. The best way to engage with your audience is to provide information that they don’t already know. In other words, you should “teach not preach.”
Who are you talking to?
Keep in mind that you will never have just one audience, you have many. So your messages must be targeted to different groups, which include potential clients, existing clients, decision makers, your peers, and your broad network, among others.
What do communications with all these audiences have in common? That’s the golden rule of outreach, which is: It’s about them, it’s not about you.
First, they want to know that you understand their business. And, second, if you want to connect with them, there is no substitute for clear language that’s free of jargon. You also have to customize your language to your audiences, because different audiences will want to hear different stories about your work. The good news is that you can tell plentiful stories about each of your projects. It’s a great way to get wide coverage.
Make it matter
No matter what kind of outreach you do, remember that you must first, number one, support your strategic business goals. Focus your efforts on the PR campaigns that are going to yield the greatest results for you and your firm.
Second, use your resources wisely. Say, for example, you just finished a private house, but you’re really interested in designing hospitals. You need to decide where you should spend your time and money. You may not want to do a big campaign that’s focused on your residential work.
Last, you need to be timely. When you’re getting started to launch an outreach campaign about a project, always think big and be relevant. Connect the project to a holiday, a trend, a topical news issue, or an event.
One more good reason
Still on the fence? Here’s another good reason to do outreach: in most instances, your competition is probably already doing it. And if they are not, and you start an outreach program, it will put you that much ahead of the game.
We know that the summer is usually a slow time, but it’s exactly the right time to do some stratetgic thinking!
For example, have you ever thought about developing – and implementing – a goal-oriented business strategy? How you can communicate more effectively about your projects to win the next ones? Ways that you can develop a robust network that attracts the right prospects? If you have ever asked yourself these questions, we have the answers!
This month, we’re sharing a snapshot of “A Three-Phase Program to Fast-Track Your Design Business for Profit.” Dr. Tami Hausman participated in the panel at the 2015 AIA National Convention in May, along with Lisa Henry, CEO of Greenway Group, and Stephen Whitehorn, managing principal of Whitehorn Financial Group.
Lisa Henry is the CEO of Greenway Group. She enjoys developing strategies for architecture, design, and engineering firms that improve their business performance.
Strategic planning brings your daily actions into focus and ties them to something bigger – something that people at your firm can connect to and can get inspired by. The hardest part is always the beginning. You have to have the discipline to create the plan and give it as much attention and rigor as you would give any design project.
Your firm – and, in fact, all firms – need a Strategic Plan in order to:
- Identify how you provide value to your clients
- Present a vision of what your firm will look like in the future
- Establish medium- to long-term goals
- Define actions, accountability, and a schedule to achieve those goals
If you’re an owner or leader of your firm, then you have some serious reflection to do…especially as you get ready to prepare your plan. The key is to start out answering the big questions about your future. For example, you need to think about:
Vision development – Decide where you want the firm to be in in the long run. Answer that, and you have your Vision. And, above all, make sure that it inspires you and your staff!
Environmental scan – Analyze the state of the firm today. This process includes an in-depth assessment of the current strengths and weakness of the firm in the areas of finance, marketing, operations, professional services, and leadership. It also includes an in-depth analysis of the external forces and factors affecting the business of architecture and design, as well as the businesses of your clients.
Framework – Build an effective framework for developing a strategic plan that embeds a logic and organization into your firm. At Greenway, we use the Design Enterprise Model, which is comprised of the five elements that influence your business enterprise:
- Marketing: How you get the Work
- Operations: How you support the Work
- Design practice: How you do the Work
- Finance: How you measure and account for revenue and expenses, and how you assess risk
- Leadership: How the firm holds and ensures its culture, succession and evolution
Goals — Create goals (or strategic initiatives). We typically help our clients to develop their goals (or initiatives) within the structure of the Design Enterprise Model. It provides a sound framework.
Action steps — Finally, break down each goal into action steps and determine who will be accountable for each specific action step within a designated time frame. Your goals essentially serve as the basic agenda for regular leadership meetings. If there is trouble executing a goal, you will know it early and provide support, or adjust your course as needed.
Share the plan – Now, not only will your people know where the firm is going, they will know how it will get there, and what role they have in moving it strategically forward!
About Greenway Group For more than 20 years, Greenway Group has served as a trusted business management consultant to leading architecture and design firms throughout the world. In partnership with its clients, Greenway develops transformational business strategies and provides confidential counsel to deliver practical insights and actionable plans.