Breaking into new markets

May 25, 2009

Breaking into new markets— you won’t find many more interesting (or timely) topics for those who run A/E and environmental consulting firms today. So many companies are either already attempting to or plotting to break into a new market (or markets) as their current markets dry up. If this is something you’re concerned with right now, here are some things to consider. What’s the most logical new market for you to pursue? Just because something is the hottest market right now is not a good reason to go after it. You may be completely unqualified or ill-equipped to serve that market and create more problems than solving by getting into it. Plus, by the time you mobilize your resources and really are able to pursue the market, it may already be cool. You really have to go into new things where there is obvious demand and that you can conceivably succeed at. It’s all about the people! You have got to have the people who can be credible providers of services to your new market of choice. It’s hard to take mechanical engineers who are used to health care facilities and suddenly make them good designers of systems for spec office buildings. Or to take a land development engineer and suddenly make her an earthquake engineer. It may also be hard to take someone who grew up in Alabama and has lived there his whole life and send him to Boston to open a new office. These situations may not be impossible but could be extremely difficult! You need to really understand your people, what their backgrounds and interests are, and what they can do. When you can mesh these skills and passions with a marketplace need, you have the basic ingredients for success in a professional service business. What can you do profitably? Just because the market wants it, and you have the ability to do it, does not mean that you want to do it if you cannot make a profit. Little is worth doing that doesn’t make money as a professional service provider. It’s hard to make up for your losses with volume when all you are selling is time and expertise. This is not to say that getting all hung up about making a profit on every single project is realistic. You have to look at profitability by client and then profitability by market to really understand what is worth doing for whom. Once you decide to enter the new market, start by defining exactly what that market is. What kinds of client organizations make it up within what geographic reach, and who in those organizations should you be trying to sell to? This is so critical— yet rarely done. Build a big enough list that your efforts to sell services to them have a high probability for success. Put together a strategy along with many different tactics to reach your new market and show them you can help them. Use tradeshows, industry conferences, writing articles for trade journals, original research projects, public relations, event sponsorships, e-mail, direct mail, web sites, blogs, and “working visibility” (things such as signage and vehicles) to start creating opportunities for you to work with clients in the new market. Be realistic. Be willing to start out small— smaller projects for smaller clients— to cut your teeth. Don’t have overly-inflated expectations of how much business you’ll be able to do right off the bat. Don’t pull the plug on your other markets, either. They’ll be back soon. I think there is much to be learned from looking at how firms in other industries break into new markets. Hyundai, for example, is going after Lexus with a new high-line vehicle, whereas just a few years ago they were barely credible as a maker of cheap cars. Apple went from making computers to selling music online. They have also been very successful selling phones. I think there are lessons to be learned from these companies. Do some reading and research, and apply what you learn. Be patient (but not too patient) with the results. You’ll be successful in the end! Originally published 5/25/2009

About Zweig Group

Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.