The C-Suite is in a transition — one that will change the structure of marketing and business development functions.
Over the last 10 years, how clients seek and select firms has looked pretty much the same. Clients relied heavily on referrals from colleagues, attendance at industry conferences and the occasional trade journal to identify and short-list firms. Firm leaders built their entire marketing and business development models around this relatively stable client-side decision-making model. It’s a model that’s stood strong for over 20 years. But, change is afoot — change that could rock this model to its core.
The New C-Suite Has New Priorities
2015 marked the beginning of the transition we’re speaking of. Last year the youngest Baby Boomers turned 51. Simultaneously, the oldest members of Gen X turned 50. According to research by the consulting firm, Alvarez and Marsal, that’s a pivotal age because the average age of a C-level executive is 51-57. So, over the next decade you will be living through an almost wholesale replacement of the senior leadership inside your prospective client base from one generation of leaders to the next.
Now, this new set of senior leaders entered the workforce in the 1990s — the height of the Internet bubble. And, those early work experiences shaped the way they work today, the way they make decisions, and ultimately the way they will seek and evaluate AEC firms. From a business perspective, they’re effectively digital natives. In fact, according to research published by IBM, members of Gen X are much more likely to rely on thought leadership and the web as critical tools in their decision-making process than Baby Boomers. Maybe the most telling piece of data from that research is this: For Boomers the web ranks eighth in their arsenal of resources for making business decisions. For Gen X it’s number one.
We’ve seen from our own research in the management consulting industry that across all clients of any age, the most important resource for selecting a firm, after a referral, is its website. Consulting firm clients place great importance on a firm’s thought leadership, which is largely published online. In fact, of the top five resources clients see as important in selecting a consulting firm, three of them involve thought leadership and the web. As this executive transition plays out, we fully expect the web to play a more and more pivotal role in the client buying process for all professional firms, including AEC.
Anecdotally, there are indicators it’s already happening. Leading firms like Array Architects, Burns & McDonnell, DLR Group, and EYP have been investing in research and web-based thought leadership for years and have publicly shared some of their successes. While speaking at KA Connect in 2014, Carl Davis of Array Architects shared this brief statement about the performance of the firm’s thought leadership efforts, “The last two years have been two of the best in our firm’s history. I attribute it directly to our knowledge sharing efforts.” And in 2015, Leila Kamal, vice president of design and expertise for EYP, shared this insight about the firm’s investment in research, “It’s difficult to measure. But, clients are definitely seeking us out specifically for our expertise and our research rather than us digging under rocks to find them.”
Turning That Marketing Model Upside Down
Historically, firms have built their client acquisition models to mirror the decision-making habits of this outgoing senior executive team. Principals, business developers and doer-sellers are at the front of the process — leveraging their networks and relationships to generate leads and opportunities for the firm. Marketing teams were created as support functions to facilitate the process of turning those opportunities into projects through interview preparation and proposal support. This has literally been the blueprint for over 20 years.
But, as we’ve shown, for the new C-Suite, the early stages of their buying process are becoming increasingly digital. For the last 10 years the best agent of your firm’s expertise was a referral, in the next 10 it will be your thought leadership. And, that thought leadership lives increasingly online — on your firm’s website or on the sites of well respected third parties (think publishers, industry associations and industry journals). Essentially, those early stage conversations that have been the hallmark of a successful business development effort for years are moving online and being replaced by client interactions with articles, research reports, blogs, interactive and multimedia content.
The skills needed to develop thought leadership, publish it and distribute it online are more readily aligned with marketing teams and their agency partners than they are with principals and business development teams. As a result, going forward, the marketing team will find itself more and more at the front of the buying process — generating demand for the firm’s services through thought leadership and the web. Simultaneously, principals and business development teams will be forced to build a whole new set of muscles — the ability to sell from the expert position with a client that arrived at the door via an entirely new channel.
The New Marketing Capabilities Model
This shift in the relationship between marketing and business development creates the need for new capabilities within the firm’s marketing teams. In many cases, these capabilities simply don’t exist right now. Logically, some of these capabilities will need to be built, while others can be outsourced. Regardless, they’ll be critical to firms’ future success. In all, we have identified four critical capabilities of an AEC firm marketing team in 2016 and beyond:
1. Extract Knowledge
Generally speaking, high quality thought leadership doesn’t just materialize. It flows from knowledge. Knowledge that’s locked inside the heads of a firm’s subject matter experts and knowledge that’s hidden in the market. Firms like Arup, DLR Group, BWBR, EYP and Shepley Bulfinch are building knowledge management teams that are tasked with identifying knowledge from both sources. They’re working to activate knowledge sharing across disciplines, offices, and teams. And, they’re investing in quantitative and qualitative marketplace research to mine for knowledge they don’t already have.
2. Translate Insights
Simultaneously, the firm must develop the ability to sift and filter through that sea of knowledge and coalesce it into a handful of critical client insights that can be used to shape the firm’s outward marketing effort. Essentially, the skill needed is the ability to identify the “diamonds” that exist inside the “coal face” and translate them into interesting stories. In essence, this is about building corporate editorial skills — the ability to recognize compelling insights and turn them into high quality content.
3. Commercialize Content
We’re living in one of the greatest explosions of intellectual property the world has ever seen. In the last eight years alone, the number of live websites grew from roughly 70 million to over one trillion. There are more websites online today than there are people on the planet. So, while the new C-suite is more pre-disposed towards thought leadership and the web, the noise surrounding web-based content has never been louder. Even high quality research can be drowned out in the noise. To be successful, a firm has to develop the ability to systematically commercialize content to get it read, understood and retained by senior client executives.
4. Understand Data
Running alongside all this is an astounding expansion of marketing and sales technologies. To date, over $21 billion in venture funding has been invested in developing software to improve all aspects of sales and marketing across all industries. At the core of all this technology is, of course, data. Every aspect of the modern marketing effort throws off data — from web analytics, to behavioral data, CRM data and proposal data — everything we do can be translated into a collection of ones and zeros that can be used to get smarter. Today’s best marketing teams recognize they can use that data to continuously improve every aspect of the marketing and business development process. Five years from now, understanding and applying data will be a required skill for a successful marketing effort.
To The Leaders Go the Spoils
We believe this C-Suite transition is fundamentally changing how and why firms are hired. Over the next 10 years, the leading professional services firms will be those that choose depth over breadth, prioritize knowledge over relationships, and market at the intersection of thought leadership and the web. Will your firm be one of them?
1 Alvarez and Marsal: “Did You Know? CEO Age” Nov, 2014 http://www.alvarezandmarsal.com/sites/default/files/files/Age-CEO-CFO-COO.pdf
2 IBM: “To buy or not to buy? How Millennials are changing B2B marketing” March 2015 http://www-935.ibm.com/services/us/gbs/thoughtleadership/millennialb2b/
3 AMCF, Rattleback and The Bloom Group: Thought Leadership: Cutting Through the Noise to Unlock Value Sept. 2015 http://amcf.org/2015/Report/AMCF_Thought%20Leadership%20_FINAL.pdf
Jason Mlicki is a principal at Rattleback, a marketing agency for professional services firms. He has been advising architecture, engineering and consulting firms on marketing matters for over 15 years.