“The only constant in life is change.” In the business development world, truer words have never been spoken. The 41st Annual A&E Deltek Clarity Report was conducted at the beginning of 2020 and shows how companies performed during the 2019 fiscal year. Since then, much has changed in the world. The United States is officially in a recession - defined as two consecutive quarters of negative economic growth. Recessions in the A&E industry have proven to be a high-pressure exercise in change management. So, what can we learn from the Clarity report and also from previous recessions in the A&E industry?
Business Development Trend Challenges
The Clarity report showed that challenges from a few years ago remain the same. Time is always a challenge, especially finding time to nurture client relationships. Competition for work continues to get tighter and many firms still struggle to identify new prospects. The A&E industry is overall accustomed to in-person interactions. That dynamic has changed drastically in 2020, requiring firms to identify new ways to develop connections and build relationships.
Getting into Position
Firms that participated in the study were asked to share in which markets they expect their firm’s position to grow, tread, or decline. Over the next 18 months, the transportation market takes the lead at 67% of firms expecting to grow there. Next up is the water/wastewater/stormwater market, followed by the health care market. Firms can remain flexible and be ready for a market shift given the election year and the global pandemic. Market research is always important, and now proves this notion even more.
Tracking the Hit Rate
The Clarity report shows that there’s room for improvement in how firms can use hit rate as a valuable metric. The six-year trend has varied from a 40% - 50% hit rate. Recently, more small and medium-sized firms have formalized a go/no go process, but consistency may be the biggest challenge. Formalizing the system can streamline processes, dedicate resources effectively, and drive the hit rate up. Firms should push business development teams to focus on quality of pursuits, rather than quantity. This is even more important when resources are limited to avoid burnout.
Bringing in the Work
As seen in the 41st Annual Deltek Clarity report, most roles within a firm have some level of responsibility for business development. Executive teams take the lead on the responsibility along with business development staff if that is an option. Marketing groups seem to lead some efforts and the seller/doer model is common in A&E firms. Regardless of who is bringing in the business, only 41% of firms have a formal business development process. Streamlined processes could ensure teams are working efficiently and communicating effectively.
As part of broader marketing efforts, the study asked about marketing techniques for the first time. The survey showed social media posts are the primary marketing technique used by 87% of firms. Traditional trade shows and exhibits are a primary technique for 65% of firms. From there, thought leadership and content marketing are of importance as this showcases the industry experts. This will be a good one to track year after year to see where the trends take us. The survey also asked about the importance of these techniques over the next five years. Social media remains at the top, followed by thought leadership. Trade shows and exhibits surprisingly bump down to the number four spot. In today’s marketing, focusing on your online presence is even more critical.
The Outlook for Business Development
Change brings opportunities. Now more than ever, business development teams should concentrate on strategic planning to narrow in on how to refocus existing business opportunities and develop new business prospects. Firms focused on being flexible and adaptable will continue to flourish in our ever-changing world.