Wednesday, October 21, 2009

AIA Architecture Billings Index posts slight improvement

The American Institute of Architects' yo-yoing Architecture Billings Index returned to its July level with its September ABI rating of 43.1, up from 41.7 in August and matching its 43.1 number from two months ago.

That July number was a six-point increase over June, so it's starting to look like August's number represented merely the latest in an ongoing up-and-down pattern that has plagued the ABI for the past several months. The index was 42.9 in May, dipped to 37.7 in June, increased to 43.1 in July, dipped to 41.7 in August, and went back up to 43.1 in September. Any score above 50 indicates an increase in billings.

This type of pattern makes it difficult for architecture firms to make strategic decisions with any certainty that their fortunes are turning for the better.

Then again, the new projects score in August was 59.1, its highest level since September 2007 and up from 55.2 in August, 50.3 in July, and 53.8 in June.

"The fact that inquiries for new projects are so high is an encouraging sign that we may be seeing new construction activity entering the design phase," said AIA Chief Economist Kermit Baker. "But that optimism has to be tempered by the fact that the marketplace is so competitive that firms are broadening their search for new projects, thereby inflating the number of inquiries that they are reporting. However, some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction."

Regional averages were as follows: Northeast (47.2, up from 45.2 in August, 37.8 in July, and 42.8 in June, but still below the 48.3 in May), Midwest (43.0, matching its 43.0 in August but up from 36.9 in July), South (42.7, down from 44.1 in August and 43.4 in July, but up from 40.5 in June), and West (36.0, down from 37.5 in August, 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April).

The September ABI breaks down by sector as follows: multi-family residential (45.1, up from 43.4 in August, 40.7 in July and 42.7 in June), institutional (43.9, up sharply from 37.5 in August, 37.1 in July, and 37.0 in June), commercial/industrial (39.0, down sharply from 45.6 in August, 42.9 in July, and 39.5 in June), and mixed practice (36.3, down sharply from 41.4 in August, 42.9 in July, 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March).


Saturday, October 10, 2009

It's funny until someone loses an account

Interesting thing happened this week at PSMJ...for the last several years we've used the same company to do our credit card transaction processing. Their services are behind the scenes and about as commoditized as you can get. Other than the transaction statements they send to our bank, we never hear from them.

We were approached by another transaction processing outfit that is going to deliver this commodity service for lower fees and they demonstrated how they can save us a couple thousand dollars a month. We called the first company to tell them we were switching over at which point we got a message asking us to consider their counter-offer and to give them an opportunity to keep our business. I am not going to consider it and here's why:

First, I am a little angry because I feel like these people have been ripping us off for years. We've been loyal customers, you'd think they'd want to take care of us. When I do business on a commodity service, I want to be made to feel I have a choice. Second, the sales rep for the new company is my boss' nephew - so not only are we getting a special deal from the new company, we're getting it from someone with whom we have a connection.

Remember, don't get fat and happy with your client base. Treat them like gold because no matter what you think, you really have no idea how tenuous your bond may be.

Until next time,


Thursday, October 1, 2009

The needless hand-wringing over social media

Has anyone stopped to think that the insistence of some people to make social media a “cornerstone” of a business development or client relationship-building plan like serving Kool-Aid with Steak au poivre at a four-star restaurant? Does anyone really think that a design firm is going to go out of business because its Marketing Director doesn’t have a Facebook page or its PMs are not “tweeting” project status reports to clients?

With a few exceptions, social media has proven to be a very sophisticated toy with some business potential. Even serious business-minded people are using it almost exclusively for social communication – loading Youtube videos of cute pet tricks and finding out who is going to the high school reunion next month. In fact, people using social media for straight-up business communications look awkward and out-of place – like a 40 year-old at a high school dance.

I keep getting frantic messages from people who “ought to know” that we should be doing something about social media…what are we doing about social media? We’re behind in our development of social media! SOMEBODY HURRY UP AND EXPLOIT SOCIAL MEDIA BEFORE IT’S TOO LATE!!!

Relax. In social media ­– as with most technology – it probably doesn’t pay to be an early mover. Unless you can really figure out how to leverage it, you are probably better off standing off to the side and seeing what others are doing. It’s not like a value-add design service where if a competitor gets a leg up it could take you months to catch up. In this communication medium, you can close the gap in a matter of days or a couple of weeks.

So what should you do? Use social media to get to know people better in a non-threatening, casual way. Make notes about what you learn about clients and prospects and integrate this intelligence into your normal business development strategy. Also, listen and ask questions about how your clients and prospects use social media. They – not opportunist “social media” consultants – will be a far better barometer of what you should be doing.

In the meantime, if anyone wants to “friend” me on Facebook – I am out there. You’ll get to hear all about the NFL and my son’s rock band…sorry, no cute pet trick videos.

Until next time,
Follow @PSMJ_Resources