Business development in the recession
by Paul Spaven (see below)
With analysts predicting that the construction industry and all property sectors will not recover from the recession until 2012, getting to grips with business development (BD) has never been more important for surveyors and other professional service providers.
Effective business development needs a strategic and holistic approach, encompassing client relationship management, marketing, advertising, public relations and internal communication. This integrated approach is of great importance, especially now when a renewed internal focus on good business practice could make the difference between failure and success.
With almost forty years in professional practice as a building surveyor this will be my fourth recession and is my second as a partner with Tuffin Ferraby Taylor. In the first, TFT opened up two new regional offices to meet the needs of our growth. During the current recession our business plan and strategy are designed to continue to drive the business forward. The success of our approach to business development will play a key part in achieving this ambition and I believe can be a template for all professional service providers regardless of their specialism.
I have heard it said that building surveying is a recession proof profession. The truth is that no profession is truly recession proof, but there are certain measures that can be taken to make sure that you are protecting yourself and creating the best opportunity to come out the other side stronger than you went in.
For most professionals and practices, BD activities such as those that make up the marketing mix are bottom line costs that are easy targets when looking for ways to reduce outgoings. However, cutting marketing costs is in fact a false economy. Can you increase, or even sustain, medium to long term fee generation purely through your active client database? In a shrinking market, simply maintaining turnover requires an increase in market share, so a business not achieving growth is going backwards. It will be those that take the risk and opt to put themselves in the spotlight that will be in the best position to increase their market share and perhaps even boost profitability.
Identify your services
A marketing and BD strategy will only provide value if it is carefully planned and well executed. The first stage is to systematically audit your position. Start by casting a critical eye over your own people, your business and clients. Define your resources, your strengths and possible weaker areas then use this information to devise a structured plan to find the best business opportunities.
You should be looking at:
- Your service offering
Which of your services are likely to be in demand and which will be out of favour?
For the building surveyor, a recession sees increased demand for dilapidations, maintenance and litigation work, but less opportunities for new construction and transactional work.
Landlords look to see how they can preserve or enhance the liquidity of their assets and so the number of dilapidations claims increase. This opens up opportunities for the surveyor to represent both landlords serving notices and tenants appealing against them. At TFT, dilapidations and service charge consultancy instructions have doubled in the last six months. Landlords are seeing previously 'safe covenant' tenants going in to liquidation, often leaving them with dilapidated buildings which offer additional opportunities for property professionals.
Litigation work also increases as construction companies, property owners and investors find the time to see where they can recoup costs by looking at property defects or negligence claims. This opens up opportunities for reliable and independent expert witnesses, creating yet another avenue for applying your in-house capability.
I am sure we have all been affected by new construction projects being delayed or abandoned. Whilst project work slows down, maintenance of existing buildings continues because regulations have to be met, tenants require quality levels to be achieved and investments need to be protected to retain value.
- Current client list
You must review your client database.
Draw up a list of dormant clients with whom relationships could be resurrected - these are people who know the quality of service you provide.
Look at your active clients that may have potential for expanding your instructions by making sure that they are aware of your full range of services.
Work out who your 'at risk' clients are and those which may be an inefficient use of your resources - or not paying the right fee - so that you can move away from them to put time into more profitable clients.
- Staff flexibility
As building surveyors we have a broad skill set that can be adapted to meet the needs of any sector or building type. Whilst many of us specialise in specific areas, our core skills can be applied to those services that are most in demand. Someone's job description may be that of a project manager, but their skill-set means that they can expertly turn their hand to dilapidations, for example.
In my experience it is fundamental to build your business plan around the individual skills of your team, rather than make your team fit your business plan. This is a tried and tested bottom-up, not top-down approach which will deliver excellent results.
As Charles Darwin said: 'It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.'
- Service value
At the top of our clients' agendas is achieving value from the services that they need. At TFT we have undergone a process that has seen us look at our key services and repackage them to meet the market needs.
Rather than selling services separately we have created packages that offer better value. Where a client may have come to us for one set of surveys, another company for overseeing repairs and a third for handling CDMC, we are concentrating on cross-selling our very wide range of services available and accentuating the benefits of more efficient, timely and cheaper results to be gained from working with a sole supplier.
Many of our clients are open to exploring innovative and commercially beneficial fee structures with us, including means by which we can each 'share the pain' but also 'share the gain'.
Know your market
Once you know what you are selling, you need to identify who to sell to.
It is important to carry out a stringent market evaluation. The market is changing shape, and traditional ways of working are being replaced by more efficient alternatives. Our own research has shown, for example, that property owners are increasingly commissioning their own due diligence and surveys prior to disposing of properties, rather than having all potential buyers carry out inspections individually. As a result we have focussed our efforts on addressing our survey options and adapted our vendor surveys to meet these needs through a two-stage process.
The targets for your services need to be carefully analysed and segmented into those that have an appetite or need for your services, from those whose needs have waned, or ceased.
At TFT we have successfully adopted The PACE Pipeline™ model for BD.
© The PACE Partners LLP. Reproduced with permission.
It sets out a very clear and concise method for a managed structured approach to developing current relationships and adding new clients to our target audience. The model breaks prospects down in to defined and undefined targets, with six key elements to the model.
Such a structured approach ensures that you are not wasting time and money talking to the wrong audience, a dangerous and eminently avoidable error.
To ensure best use of available budget a larger number of highly targeted campaigns with very clear messages will deliver a greater return on investment than a broad, scatter-gun, conventional approach.
Staff morale and development
Your staff can provide the key to how your business develops and the successes it achieves. With the constant dark cloud of redundancy hanging over everyone's head it is important to make sure that staff feel valued, enthused and positive about the direction you are all taking.
Internal communications is often overlooked as it does not directly generate fees, but it is an essential part of keeping staff morale positive. Confident employees are going to be more efficient in fee generation than downcast ones. Keep everyone informed of what is going on throughout the firm so that they know when you are winning business, getting press coverage, advertising services and taking the business forward.
With workloads lighter than during boom periods, now is a good time to look at staff development with training. We all need to keep our skills and knowledge fresh. Take the time to make sure all the people in your organisation are up to speed. Now is a good time to train experts in identified growth business areas such as sustainability and function specific knowledge like access consultancy or cultural heritage and conservation.
The truth is that no-one really knows when we can expect the market to turn the corner. What we do know is that we all have to be focussed on business development so that when the tide does turn we are in the best possible position to come out the of the starting gate fitter and stronger.
One of the best weapons in your BD armoury is your smile. Being positive and avoiding the 'doom and gloom' rhetoric pays dividends. I grew my team out of the last recession. Clients want to work with confident and enthusiastic people.