How can improved sales and customer service in the building industry contribute to a greener world? My logic is that improved quality in building necessarily involves dramatically improving the energy efficiency, performance, and resilience of buildings, and that a big part of improving the building industry is improving relationships with customers. Also, the innovation necessary to make green building practical, affordable and pervasive is by no means the exclusive responsibility of designers and engineers- salespeople have a crucial function in making this happen.
The economic downturn has forced many AEC companies to come to grips with reality in sometimes unpleasant ways. Hunkering down and pulling back on marketing and sales investments my look like a good cost cutting measure in t he short term, but isn’t a good long term strategy. The smaller firms that survive into the next upturn will have adapted to widespread economic dislocations at the regional, national, and global scale. An often overlooked but key part of adapting well is improving sales, communications and customer service. Some larger firms can be more insulated from the downturn because of their available resources, geographic reach, and stronger brand value, but they are also more likely to have a specialized sales focus in their organizations (even if they don’t call it that). AEC companies today need to recognize that a fully integrated, consultative sales function is the main driver in company growth and profitability, and to focus specifically on building, rebuilding, and improving sales activities and practices.
Part 1: Sales is a Dirty Word in AEC
Over the past few years working in sales and marketing in AEC, I’ve been continually surprised by the culture clash that happens around sales in many firms. I’ve been told many times not to use the “S” word, that “we don’t do that here.” So we can call it business development, if we follow the logic that adding more syllables, bigger words and fancier labels (as architects and engineers are often fond of doing), confers value to an idea. AEC is not the only industry with an anti-sales bias, but it seems particularly puzzling here to me. High level solution selling is absolutely crucial to this industry, as I’ll discuss in detail later, but there’s a pervasive anti-sales stigma that prevents many, if not most firms from developing a strategic sales approach that could dramatically improve their practices. History plays a part in this bias: architecture as a consulting practice in the modern era evolved in part as a service to the aristocracy, with the rise of the “gentleman architect” in England particularly: vestiges of highly stratified class distinctions, with their attendant disdain for crass commercialism (and especially the “trades”) probably account for some of the bias.
It’s fascinating to analyze AEC sales culture from a business standpoint: one discovers all kinds of irrational behavior and cultural idiosyncrasies. To begin with, gauging fees as a percentage of construction costs is a broken model, especially given the increasing focus on building performance and the rise of Integrated Project Delivery. Typical sales compensation structures in many industries are based on the volume of orders for materials and equipment, rather than on “intangibles” like services or efficiency: this model can’t adequately account for the value that design and construction professionals provide. Often the most valuable function of most AEC consultants is to figure out how to do more better with less. Even over the short term, smart design can save enough money on construction and/or operating costs to more than offset design fees. This fact presents one of the biggest challenges to selling design and consulting services in AEC. In a sales situation where costs for materials and equipment are a big focus, as with all construction projects, demonstrating that higher fees for design and other services are a good payoff in the long run requires a sophisticated, consultative, strategic sales process.
Another unique aspect of AEC is the nature of competition and the ways in which project teams are formed- a typical building project involves so many different types of design and construction professionals that knowing and playing well with everyone in your regional environment is a critical part of the sales process. The ability to build highly effective teams across many disciplines is a defining characteristic of the effective AEC salesperson. Also, the tightly knit quality of regional AEC communities means that most firms are used to going head to head with competitors one day on one project, and collaborating with them to win another project the next day. The traditional adversarial attitude between designers and the “trades”, i.e. contractors, especially in light of the “percentage of construction” compensation models also impacts the sales process considerably, and must always be negotiated carefully. New project delivery models and design technology like BIM are helping to change the adversarial relationships into collaborative ones, but much of the BIM revolution is being driven by contractors, who realize the profit potential in the new technologies. The disruptions to all AEC job functions that are resulting from BIM must be well understood by AEC sales people and executive staff.
There are many other factors behind the lack of sales focus in AEC. AEC professionals (old and young) typically receive little or no sales or business training in academic institutions, which are largely concerned with physical design and construction and rarely with the social process of design. Cultural assumptions about personality and job function match up keep talented designers at their desks pumping out drawings rather than developing relationships with clients, when they need to do both. A deep seated “personality bias,” which holds that some people are natural sales people while others are technical people, contributes to this behavior. Connected to this factor is the bias toward assigning sales functions to principals and practitioners rather than to dedicated sales staff. While it’s essential to have everyone involved in the sales process, project leads and principals have the highest billing rates, and sales activity is typically non-billable, so there’s financial risk in assigning too much time to them for sales. They also tend to gravitate to what they know and love- to producing work rather than finding it and bringing it in.
Another factor, the legendary “feast or famine” behavior in AEC firms also keeps principals focused on staying billable in the short term, rather than engaging in the strategic sales and marketing required to win projects with very long sales cycles. This behavior is typical in small firms, which comprise the majority of the AEC industry. Even the bigger firms were small firms once, and are populated with former practitioners from small firms: this sales behavior is deeply ingrained in the industry. Without a culture that values client relationships over technical expertise, most practitioners would rather design or build rather than sell: some don’t even want clients at all, they just want to make perfect buildings or systems, which is why there usually aren’t any people in project photographs (they just mess up the buildings!). A factor that is somewhat irrational in light of a disciplined sales focus is design firms’ profligate indulgence in design competitions, exacerbated by the pressures of the economy, and by owners and clients abusing this practice to astounding degrees. This practice adds more cost to an already high cost of sale for most AEC design firms. Finally, there is a general lack of designated skilled sales staff in many AEC firms, and principals who have no inclination or respect for the sales process are often pressed into service as sales people when business drops off.
Business as usual - where only a few key principals bring in all the work based on long term comfy client relationships, and sales, marketing, and customer service are afterthoughts to design, winning awards, and getting published – isn’t going to cut it in this economy. It’s also not going to cut it when (or maybe IF) there’s a recovery, as the game will have changed considerably by then. There will be new rules, and a whole host of leaner, meaner, global players on the field. The firms with the strongest evolutionary advantage will be those who have fully integrated sales, marketing, and communications functions across their entire organizations, who provide cross training to technical people and sales people; who can balance the skills and responsibilities of principals, production staff, and sales and marketing staff; who can manage their brands expertly through a robust system of developing and nurturing customer relationships and processing feedback; who see improved communications in the service-Intensive AEC industry as a part of continuous quality improvement, and good design in the full sense of the word- as it applies to designing companies and processes, not just buildings and environments.
Next: Part 2: Challenges for AEC Sales in Today’s Economy