Transcript Marketing Architectural Services

Marketing
Architectural
Services
American Institute of Architects
Lubbock Chapter
October 10, 2007
Bob McDonald
Rawls College of Business
Texas Tech University
Importance
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2004: > $1 Trillion in construction in US
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Represents 4.7% of US GDP
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Impact on many aspects of society
including housing, commerce, health care,
education, worship, & entertainment
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Uniqueness
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Marketing of architectural and other
professional project services differs from
marketing of other services:
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Demand is discontinuous
Each product is unique
Projects are complex
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Profession
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Requires the ability to apply scientific
principles to solve a problem
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Skill based on theoretical knowledge
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Developed through education & training
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Product: Professional Services
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Specialized knowledge and skills
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Formal education
Supervised practice
Demonstrated competency via licensing
examination
Enables architect to create complex,
unique, highly customized product that
satisfies clients’ needs and budget.
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Consequences of Licensing
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Public protected from unqualified
practitioners
Creates barrier to entry
Customers incapable of differentiating
among licensed professionals
Difficult for professionals to differentiate
themselves from other practitioners
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Differentiation
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Non-commoditization
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Value Added
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Sell a credible promise
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Capable of designing project more effectively
and efficiently than competitors
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Credible Promise
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Existing clients
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Rely on trust earned through experience
Relationship marketing
New clients
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Rely on cues
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Reputation
Track Record
Staff, offices
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What works?
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Research Project
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Interviews with 9 informants
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7 principals, each > 25 years experience
2 marketing directors, each > 10 years experience
All 9 work for highly successful firms
3 firms, ranging from 25 to 150 employees
Each has been in business more than 20 years
Two firms are multi-disciplinary, one specialized
Same large city with > 200 firms
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Conceptual Framework
External Relational
Factors
Interaction Ties
Trust & Commitment
Operant Resources/
Capabilities:
Market Sensing
Customer Linking
Marketing Strategy Making
Marketing Response
Project Development
Successful
Project
Marketing
Internal Relational
Factors
Trust & Commitment
McDonald and Madhavaram 2007
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External Relational Factors
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Traditional Long-Term Relationships
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Core of successful marketing strategy
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Successful projects demonstrate value
Projects inherently long and intense
relationships
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But…
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External Relational Factors II
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Projects are lumpy
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Likely to be long gaps between projects
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Results in “sleeping relationships”
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External Relational Factors III
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Pursue clients with multiple small projects
rather than fewer large projects
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e.g., multiple remodel vs. build from scratch
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May work better for smaller firms
Maintain contact between projects
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One interiors firm touches base quarterly
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Keep fingers on pulse
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External Relational Factors IV
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Client following strategy
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Go on the road
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Establish satellite offices
Clients with multiple project types
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Institutions, government, schools, hospitality
Referrals
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e.g., Hi-rise residential  Cathedral
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Internal Relational Factors
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Within Firm: Principals often find leads for
each other
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Within Network: Engineers, consultants,
contractors, financiers, real estate brokers
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Expand business network
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Operant Resources/Capabilities
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Operant resources: dynamic resources that
produce effects such as skills and knowledge,
or organizational processes and core
competences
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Successful firms are market-driven
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Leverage capabilities
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Market Sensing Capability
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Systematically gathering, interpreting and
using market information quicker and more
effectively than competitors
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Networking: Principals responsible for
business development, i.e., sales,
marketing directors focus on marketing
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Market Sensing Capability II
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Tie into large institutional and government
capital improvement plans
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Capitalize on personal connections
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Cannot wait for the RFP
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Customer Linking Capability
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Creating and managing close customer
relationships
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Customers believe they have unique needs,
especially as projects become more complex
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Firms in large markets (> 500K) developing
expertise in particular project types to compete
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Customer Linking Capability II
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Market-Facing Studios
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Health care, commercial, religious, interiors,
public works
Understand customer’s needs better
Understand market better
Develop specialized knowledge and skills
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Customer Linking Capability III
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Principals responsible for each studio must
be passionate about the project type
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Expertise in a project type differentiates the
firm in the local, regional, and even national
and global markets
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Need to emphasize expertise
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Marketing Strategy Making Capability
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Structure: Geographic &/or Project Type
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Follow markets to anticipate change
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Conduct a thorough market analysis
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Principals must keep fingers on pulse
Marketing Directors and Principals
Analyze Failures
 (Airport Garage)
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Marketing Strategy Making Capability II
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Leverage expertise
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Hi-Rise Residential  Long-Term Care
Pursue large, efficient projects
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Interiors pursued 60 – 80,000 sq ft projects
Law, energy, accounting, consulting
Not many in Lubbock
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Marketing Strategy Making Capability III
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Traditional Market Planning
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SWOT Analysis
Segment market and choose target segments
Competitor analysis
Forecasting
Staffing: especially important in professional
project services
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Marketing Response Capability
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Must demonstrate “value-added”
Clients often view architectural services as
commodities
Must be innovative
Develop new market offerings, e.g.:
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Convert building plans to CAD
Market Analysis/Repositioning Projects
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Marketing Response Capability
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Promotion
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Public Speaking
Seminars
Technical Symposia
Project Postcards
Christmas Cards
Hire market consultants, e. g., minister
Newsletter
Awards
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Project Development Capability
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Raison d’etre
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Conceptual, Technical & Human Skills
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Coordination of multiple consultants
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Contract Management
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Code Knowledge
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Project Development Capability II
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Hire the best people
Use the best consultants
Continuous Training & Development
Organizational Values
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e.g., Quality Drawings
Contractors value & can sharpen pencils
Hand Letter Example
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Success
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Journey not destination
Hard work
Internal & External Relations
Operant Resources (Capabilities)
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Market Sensing
Customer Linking
Marketing Strategy Making
Marketing Response
Project Development
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