In this economy, engineering firms have bids tied up in engineering projects contingent on economic stimulus funding, which is slow to trickle down. There’s a lot of engineering work being promised as timelines for contract awards get extended further and further.Some engineering and design firms have been forced to transfer their business mix predominantly to public projects, which often end up being a low-ball bid “beauty contest.”And then there’s the accordion-like expansion and contraction of the construction engineering workforce which was the norm prior to the economic meltdown and is now combined with the contraction of the work week as well.
So where are you looking for new business development opportunities?Are you simply filling your pipeline with anything you can get your hands on? In these tough economic times, this situation is simply “the way it is.”
Regardless of how you are “getting by,” ignoring what you do best, and for whom, is not an option as we move toward the new economic business paradigm.
Who is your best customer? What makes that company your best customer? Are they a good customer simply due to the volume of repeat business awarded during the year or profitability of the work awarded? Is the work awarded a multitude of small jobs, with less-than-inspired-engineering, brought to you at the last minute, with expectations of rapid turnaround? Or is this engineering and custom design and fabrication work profitable because you understand that customer’s mindset and requirements and they have trust and confidence in your ability to take the time to deliver well-thought out, collaborative engineering solutions?
What if all of your customers were like your “best” customer? What if you took the time to understand the persona of your “best” customer and developed a set of specifications for what a “best” customer brings to your table? How’s that for turning the tables and creating a different type of business development strategy for your company?
As we head towards the new economic paradigm, engineering-intensive companies who have used their slow periods and downtime to take a good look at what they do best and for whom are going to be ahead of the curve in terms of business development.
Most companies have a mixed bag of customer types. Take a look at all of your customers and gain a handle on what makes the “best” the “best.” Instead of being all things to all people, what if your company targeted the “best” types of companies with whom to do business in the future?
What would the economic impact on your company be if the majority of your customers fell into the “best” customer category?
Ask yourself these questions:
1.Who are your customers? Do you truly understand who they are?
2.Are your best customers your target customers? Or did you just “fall” into them?If your best customers simply “happened” to your company, it’s time to find out what makes that relationship work so well.
3.What are the strengths, weaknesses and gaps in your company in terms of successful business development practices? Is business development endless response to RFQs or a result of relationship building, knowledge management and long term, multiple phase projects?
4.What skill set is required for you to target “best” customers? How many individuals in your organization currently have this skill set?
5.Is your company the “best” vendor of your “best” customers? Why or why not?
6.If the majority of the customers you served were in the “best” customer category, would your production runs be predictable with longer lead times? How might that situation impact quality, productivity and scheduled maintenance… let alone cash flow?
7.If the majority of your customers were “best” customers, could you allocate certain lines or a percentage of capacity for rapid turnaround projects for “other” customer types while devoting greater resources to your “best” customers?
8.How could you shift the percentage of your customer base to “best” customers within the next six months and what would the impact be on personnel, equipment and once again, cash flow?
Targeting “best” customers requires some work on your part. You will need to identify the types of discussions with the types of customers resulting in the best return on investment for your company. You will need to identify those individuals within your company who already have the skill set which allows them to be “naturals” at these types of discussions. And you will need to make an investment of time and, yes, cash, to develop these skill sets in other individuals who may have the potential for developing business with “best” customers.
Having someone pick the short straw and telling them they are now a “sales engineer” – without the benefit of training – is no longer an option. And for small to mid-sized companies, this practice has been the norm.
The new business paradigm requires different habits and attitudes for engineering-intensive companies: Sales Aerobics for Engineers, if you will. Engineering-intensive companies need to recognize the gaps in their current palette of offerings. Enlightened engineering and industrial manufacturers, distributors and service companies should be willing to re-train and cross-train themselves and their staff to incorporate sales questions into engineering discussions. These types of companies will be at an advantage vs. their competition.
Using the economy as an excuse to do nothing is no excuse at all. It’s time to regroup, retrain and redeploy. If your company has made it this far, you are well-managed. Now take what you do best and add the skill sets to your engineering staff to make your company better, even “best.”
You don’t need more customers. You need more customers like the ones you do your best work for.
Find out what makes your “best” customers, well, “best.”