How the AEC Marketplace Is Changing, and How Your Firm Can Adapt
The Hinge Research Institute is releasing a special Architecture, Engineering & Construction (AEC) industry version of its breakthrough study of professional services buyers and the firms that they hire. It’s called Inside the Buyer’s Brain: Architecture, Engineering and Construction Edition.
Why This Study Matters to You
AEC firms have been facing a fairly consistent set of challenges in recent years: fighting for top talent, differentiating in a competitive market and adapting to swift changes in the evaluation and selection process.
Leading marketers and business developers have strained to compete at scale with digital techniques like content marketing, email and social media—but where are the results? How have things shifted (or accelerated) in the midst of a global pandemic?
Read on to preview practical insights that will shed light on the most relevant trends shaping AEC buying behavior today, what challenges lie ahead and key points to consider.
About the Study
The original Inside the Buyer’s Brain study, published in 2013, provided the first comprehensive look at the differing perspectives of buyers and sellers throughout the professional services buyers’ journey.
An updated version of the study was published in 2018. Since then, the marketplace has changed considerably, so we released this follow-up study in 2020. During our analysis, we noticed significant differences between industry audiences, prompting us to develop industry-specific reports for the first time.
Focused on AEC
In the AEC edition of the study, we focus on Architecture, Engineering & Construction services firms. We explore the challenges their clients are facing and the role AEC firms play in addressing them. We also explore the new client journey from the time a buyer first identifies a business challenge to their final selection of an AEC firm.
We then look at the client experience and how it does or doesn’t translate into an ongoing relationship and referrals. To put the findings in perspective, we compare key AEC insights to other professional services.
Buyers and Sellers Are Represented
Using phone interviews and online surveys, we researched more than 396 buyers and 812 sellers of AEC services. Because the buyers bought services from these sellers, we were able to study both sides of the relationship—how they see each other and what disconnects can derail a professional relationship.
Industry Comparisons Included
In addition to reporting on the industry data, we also looked at the findings from other angles. This report examines the responses from Architecture, Engineering & Construction Services firms and puts them in the context of three other major professional services groups:
The results of the study are organized around four questions that capture the most impactful steps in an AEC buyers’ journey.
AEC Buyers’ Business Challenges
AEC firms generally understand their buyers’ priorities when it comes to financial issues, the need for good people and competitive pressures.
AEC buyers have faced budget pressures for many years, and clearly AEC firms have been listening (after all, they have shared some of those challenges themselves).
But there have been meaningful shifts in the other top challenges. In 2020, “maintaining quality/efficiency” and “finding/retaining good people” are almost 50% more likely to be identified as top challenges than only two years earlier. For the most part, AEC firms recognize the relative importance of these client challenges.
Although it ranks fourth in the list, “strategy/planning issues” has shot up over 70% since 2018. And AEC firms have not realized how important this emerging issue is for their clients. This specific challenge is a key to improving overall relevance—which is a powerful remedy for commoditization.
How Do Clients Feel About Their AEC Firms?
Most AEC buyers (65%) would recommend their current partner to a friend or colleague. But fewer and fewer friends and colleagues are bothering to ask. It’s quicker and easier to do a web search or check on social media.
Despite a negligible 3% improvement, AEC firms are still seen as one of the least relevant to buyers’ most important challenges of all the professional services studied. This is significant, as relevance impacts both willingness to recommend and client loyalty.
High-level relevance to prospects’ key issues not only wins new clients, it also helps you keep them. Firms that are viewed as highly relevant to clients’ current issues are 75% more likely to be highly recommended by their existing clients. High relevance ratings are also associated with a 46% higher likelihood of having highly loyal clients.
How Do Buyers Search for AEC Services?
When buyers of AEC services need to find a solution to a problem they’re trying to solve, they still value the recommendations of peers and colleagues first. This underscores the importance of relevance and its connection to referrals and loyalty. Social media is the third most common way AEC firms look for business-related information. And the restrictions imposed by COVID-19 likely made social media—especially LinkedIn—even more attractive. We believe that it’s likely much of this behavior will continue post-pandemic.
Conducting a general web search is nearly tied with peers and colleagues as a trusted resource for information. In fact, use of the web has increased faster than any other channel over the last five years. This trend underscores the critical role of both your website (where referral recommendations can be validated) and SEO (an important way your website gets found) in the selection process.
To snap the importance of these buyer search channels into perspective, consider that AEC is the lowest ranked industry for both visibility and reputation. There is significant work to be done if AEC firms are to rise out of obscurity and be acknowledged as the highly relevant experts they are.
How Do Buyers Evaluate AEC Firms?
While nurturing existing relationships has long been a core tenet of AEC marketing, we are seeing the limits of this strategy. The importance of an existing relationship in the final selection has declined by 26% since 2018. Today, final decisions are often collaborative decisions, so great professional relationships (while still important) no longer necessarily carry the day.
Though cultural fit rounds out the top 5 deciding factors, it has dramatically increased by 32% over the last two years. Today’s AEC firms are not only being evaluated for relevant past performance, experience and industry expertise, their culture and values are often being considered, as well.
What Does This Mean for You and Your AEC Firm?
The AEC industry is undergoing a period of significant and rapid change. While no one can know for sure how this change will play out, some conclusions seem clear.
Focus on the relevance of your services.
Making your expertise visible is important, but don’t forget to make it relevant to the buyer’s challenges as well. Don’t assume that your potential client understands what they need or how you can help them, even if it seems obvious to you.
Understanding the most relevant issues facing your clients and how they connect or relate to your services and teams will help your firm stand out in a highly competitive market.
It’s time to get serious about digital. Consumers and clients have been migrating to digital communications channels for many years. We have seen digital approach then overtake traditional marketing and delivery channels. And with the widespread emergence of a remote-work experience, the time has come to act. Buyers today are free to search for the specific expertise they need, regardless of a service provider’s geographic location. Don’t get left behind waiting for things to “get back to normal.”
Remember that activity does not equal impact. Without a clear understanding of relevance, and a consistent branding, marketing and business development strategy, your team will expend effort without realizing proportionate results.
Your team is more relevant than ever. Talent acquisition is now a business development function. Having great talent is a top factor that tips the scales for buyers. That means the quality of your team directly affects the bottom line. Make your expertise visible to potential recruits as well as prospects.
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