So now seems the opportune time to gain market share. What? You heard me right. There have always been companies that emerged stronger than ever from even the worst economic downturns. Why can't your firm be one of them?
It starts with your outlook. You won't get there while hunkered down in survival mode trying to weather the storm with all your paddles pulled into the boat. That's where many A/E firms are today. Others, by virture of their fortunate market placement, are getting by just fine by holding to the status quo. That won't get you there either.
Instead, you need to go on the offensive. Take advantage of the fact that most of your competitors are playing defense these days. Sure, your firm probably faces all the same external difficulties that they do. But you don't have to internalize the problems. The truly successful firms will keep punching even after taking some heavy body blows.
It usually requires a change in strategy. Two or three years ago, most firms could claim they were growth oriented because they were growing. But the results in many cases were misleading. To explain, let me suggest four primary growth strategies:
- Growth share. The firm maintains it's share of the market which grows because the market is growing. All boats rise with the tide. This is where most A/E firms have been for the past several years. Of course, the tide has been falling recently and most boats with it.
- Market share. The firm grows because it increases its portion of the market, meaning it takes someone else's share. The robust M&A activity in recent years illustrates this strategy. But few firms are able to organically grow their market share.
- Market diversification. The firm grows because it expands into new markets or services. Usually this is a variant of the growth share strategy, because the new market is an expanding one. Much less common is market diversification that involves taking competitors' market share.
- Market creation. The firm develops a new product or service that responds to an unmet need, in effect creating a new market. This is rare in our industry, but is a distinctly advantaged market position--at least temporarily until the competition catches on.
So what does this mean? In a recession, the obvious growth strategy (if your firm is pursuing growth) is market share. This will be new territory for the vast majority of firms, but the opportunity is ripe. Why? Because most firms (at least in most markets) are currently in a defensive posture. They are waiting for signs of an upturn before venturing out of their bunkers. Many have trimmed staff, cut marketing budgets, pulled back from clients who don't have any work, and removed the word "growth" from their vocabulary.
Now's your time to take advantage. Some suggestions:
Think long term. It's hard to think about tomorrow's feast when you're hungry today. But there is a season to plant and a season to harvest. Now is planting time, in others' fields that they have left fallow. Begin shifting focus to the long-term payoff. By the way, this is one of the best ways to energize staff in the grip of recessionary blues.
Find new ways to help clients. We're prone to take a transactional approach to business development. Where's the next project? When is the RFP coming out? Now more than ever, you need to turn to a more relational approach to building your business. Stop focusing on your own firm's needs and start concentrating on clients' evolving needs. Then offer your help. Dig deep; think outside the box of your usual scope of services. Partner with other firms if you need to. Clients don't have the money? Fit your scope to their budget, offer a discount, or do it for free. It's an investment.
Step up your marketing. When many firms are cutting marketing staff and expenses, it's the perfect time to buck the trend. A study by McGraw Hill found that companies that increased advertising in the 1981-82 recession averaged a 275% increase in sales in the subsequent two years, while companies that cut advertising only experienced 19% growth. In our industry there are better marketing strategies than advertising, but the general principle holds true. Orient your marketing to helping clients with good advice, helpful information, and useful resources. You'll not find a better time to raise your profile in the marketplace.
Track what's happening with your competitors. As firms are retrenching, new openings are being created. Pay particular attention to the loss of key personnel. This can crack the door open to clients who were previously tied to certain competitors. In some cases, offices are closing, service lines are being shut down, sales territories are shrinking. These developments all can be leveraged to your firm's advantage.
Make strategic hires. A couple years ago one of our biggest concerns was the shortage of talent in our industry. That problem has gotten a reprieve in this severe recession. People are on the move, and there may not be a better time to hire for many years to come. I know, it's hard to hire when you're short on work. But in some cases, it's worth biting the bullet. Be actively searching for good people even if you can't afford them. The opportunity may be too good to pass on.