This month, readers seek advice on topics related to social media, benchmarking, and increasing prices.
WHO SHOULD FIRMS COMPARE THEMSELVES TO WHEN BENCHMARKING?
Dear Christy,
“We’re about to start our strategic planning process and like to use industry benchmarks as comparisons. When benchmarking, who should
we compare ourselves to?” —Benchmarking in Bismark.
Dear Benchmarking,
This is a good question that has a complicated answer. I’ve found a lot of firms
can get stuck on a single, unimportant characteristic that ends up steering them in the wrong direction.
Start by defining what you are benchmarking and then customize the parameters to that particular metric. Metrics most firms are concerned about benchmarking usually
include salary levels, spending/budgeting, marketing effectiveness, fees, and a variety
of firm processes and procedures. Discipline, market sector, geography, size, and revenue are generally the most important benchmarking parameters.
Salary levels are just about the only benchmark for which I would always recommend using a geographic parameter. Due to the internet, social media, and other new technologies, many firms who were previously only able to work in a very specific region can now work all over the nation and even the world, making geographic comparisons less important than they were in the past. Still, cost of living needs to be a consideration in any discussion about salaries.
For most things, like marketing effectiveness, national overall figures for firms in the A/E/P industry are going to be applicable to almost anyone. If you think that just because you’re a small firm, you shouldn’t be getting the same hit rate on a press release or spending (the same percent) on marketing, you’re wrong.
When you’re trying to benchmark things like budget amounts (marketing, business development, labor, etc.) I would recommend benchmarking yourself against firms of a similar size and possibly a similar market.
Ultimately you have to ask yourself: “Who do
we want to compare ourselves to – average firms who might be struggling in the same way we are – or high growth, high profit firms?” Zweig Group does a Successful Firms Survey, which pulls out data from all of our surveys and shows the differences between these groups and firms overall.
WHY SHOULD A/E PROFESSIONALS USE SOCIAL MEDIA?
Dear Christy,
“Will social media really benefit us? It’s not like people hire transportation engineers or sports arena architects because they posted a cute picture on Twitter. Why do we need it?” —Reluctant in Raleigh
Dear Reluctant,
You’re right; I highly doubt you’ll get a big job off one Facebook post or tweet, but that’s just like saying you shouldn’t go on a date because it’s unlikely you’ll marry that person the very next day.
If you want to get new clients, you’re going to have to do a lot of different things. The great thing about social media is it has a life of its own. People can share and repost your tweets or Facebook or LinkedIn postings, and you’ll reach clients and other people you never would’ve any other way. Don’t cut yourself off from it. Remember when email seemed unnecessary and the Internet seemed like a largely useless thing?
NEED TO INCREASE PRICES WITHOUT LOSING CLIENTS
Dear Christy,
“We’re a small generalist design firm in Iowa. We really have a hard time getting decent fees for what we think is excellent work. Any suggestions on how to push fees up? We’re tired of making less money than the painters on our projects, but I’m worried we won’t win any work if our prices increase.” —In a fee pickle.
Dear In-a-pickle,
First of all, I’m a dill-pickle person, and no deli sandwich is complete without a nice cold kosher spear on the side, but I couldn’t tell you what brand is in my fridge!
Be the big cheese: I love cheese and am totally willing to pay 50 percent more for a nice aged sharp cheddar – but how would I know there’s a difference between my favorite Tillamook Special Reserve and a block of Kraft if they had the same wrapper?
You told me what your problem is: You’re generalists, and you’re probably trying to compete with a bunch
of other average firms offering similar services with promises of finishing the job on time. If you want to command better fees and to be able to export yourself within any reasonable geographic distance from where you are based, you have got to specialize. Specialized firms always get higher fees than those that aren’t. You just cannot be all things to all people. This might have worked 50 years ago but won’t today because people have too many options.
HAVE MANAGEMENT QUESTIONS YOU NEED ANSWERED?
"Dear Christy" is THE ZWEIG LETTER's newest column, a place for industry leaders to anonymously submit their most pressing leadership, management, finance, marketing, or human relations questions. Each month, submissions will be answered in print, so that the entire A/E/P and environmental consulting industy can benefit from the shared experiences and information highlights.
Have a question you need answered? Email Christy Zweig at christinaz@zweiggroup.com or send your letter to Zweig Group, P.O. Box 1528, Fayetteville, AR 72702. Even if letters are signed or emails contain the writer's name, all entries will be kept confidential and published anonymously.
Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Get a free trial of The Zweig Letter here: info.zweiggroup.net/sandbox/the-zweig-letter-free-download
