What's Your Problem? - Part 3

We all have problems. By sharing them, we can all learn. Here are more challenges and questions from the AEC community!

How does a firm address the one "bad project" with clients?

Let's face it. If your doors have been open any period of time, you’ve had one bad client. What is most important is to not ignore it. Address it with your future clients directly. I work with a design firm whose client sought legal recourse for owner-directed changes that they could no longer afford to pay. A mediator agreed that money was owed, but they were unable to reach a settlement. Rather than go to court, and have it tried in the court of public opinion, the firm decided it was no longer in their interest (time and money) to pursue a course of action. I think we can agree this ended badly.

What made the situation palatable was the fact that they developed a proactive communication plan to reach their client base and discuss the situation. Denial is what hurts. Admit what the issues were, and tell clients how you are prepared to resolve them now.

Is it better to define markets by project type or client type?

This is a great question! The answer is by client type and the reason is this: Clients have behaviors, project types don’t.

Look at it this way: if I asked Nike® what their target demographic is for $125 tennis shoes, they would tell me something like "youth 18-32 years of age, whose parents have a disposable income of $X and play or watch sports," let’s say. From that information, they define the marketing approach. They don’t look at who is buying low top tennis shoes and then go after them. You must first know your client, their business and their values. Their taste in tennis shoes (and project types) is likely to change.

How do you measure - or DO YOU or SHOULD YOU measure - business development metrics against project metrics in terms of whether or not the project was a success based on mismanagement or reluctance to bill for add services or over design and use all your fee thus the project looked really bad financially....I guess how to define success of a project against the metrics associated with getting the project and WHAT can you learn from that for the future?

If you were here, I’d squeeze you! You MUST always assess project performance for two reasons:

1. To determine if this is a project type that you can do (given the team and client relationship).
2. To determine if it works within the process in which you design.

Failure to examine either factor will result in good business development dollars wasted in pursuit of projects that will eventually lose money for the firm or tarnish its reputation. This is a perfect example of where to use the BD ROI equation. If your fees are low and your BD dollars are high, you need to re-evaluate.

If your firm has a tendency to over design and can’t bill for it, then in such markets as K-12 what is your end game—philanthropy or business? This is why it is important to include your BD professional in discussions about project types that are both strengths and weaknesses of the firm.

Got more questions? Send them along to me at kcompton@a3kconsulting.com. And for more information, see the AIA PMKC webinar Wisdom of the Ages: Best Practices in Business Development Part 2. This popular series and other resources are available on A3K Consulting's "Inform" webpage.

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.