Tuesday, December 15, 2009
2010 SMPS National Marketing Communications Awards (MCA)
Communicating during extraordinary times: Tell your story. Society for Marketing Professional Services is accepting entries for the 2010 Marketing Communications Awards. Recognizing communications innovation by design and building companies, the competition encompasses 20 categories, including brochures, websites, social media. Discounted Entry Deadline: March 1. Details: www.smps.org/mca. Questions: molly@smps.org, 800.292.7677, x231.
Monday, December 7, 2009
Surviving by Strategizing
Good blog post on the Building Design and Construction Building Team 360 blog from over the weekend about AEC strategies and tactics for 2010.
Robert Cassidy offers seven suggestions that AEC firms should do to survive 2010 while waiting for the economy to turn around, which he predicts will happen in either late 2010 or 2011.
Each of the seven is pretty solid advice ("1. Don't do anything stupid. This may seem obvious, but desperate times often lead to stupid decisions, like opening up new offices in so-called 'burgeoning markets,' either geographic or by market sector....Competitors who really do know those markets are already firmly in place and holding on tooth and nail; they won't be satisfied just crushing you, they'll do their best to emulsify you.") but the first three are the best (the other two are "doing well in a lousy economy" and "look to your strengths").
We're all in this mess together, but one resource that can help you navigate through it is PSMJ's 2010 AEC Firm U.S. Market Sector Forecast. It offers advice and insight into how your firm can improve its performance in 2010. Check it out here.
Robert Cassidy offers seven suggestions that AEC firms should do to survive 2010 while waiting for the economy to turn around, which he predicts will happen in either late 2010 or 2011.
Each of the seven is pretty solid advice ("1. Don't do anything stupid. This may seem obvious, but desperate times often lead to stupid decisions, like opening up new offices in so-called 'burgeoning markets,' either geographic or by market sector....Competitors who really do know those markets are already firmly in place and holding on tooth and nail; they won't be satisfied just crushing you, they'll do their best to emulsify you.") but the first three are the best (the other two are "doing well in a lousy economy" and "look to your strengths").
We're all in this mess together, but one resource that can help you navigate through it is PSMJ's 2010 AEC Firm U.S. Market Sector Forecast. It offers advice and insight into how your firm can improve its performance in 2010. Check it out here.
Bad news for the AEC industry
Interesting article this morning on the American Banking News web site that claims research firms are reporting that defaults on U.S. commercial property loans are surging, standing at the worst level in 16 years. The reports also indicate things will worsen in 2010 and 2011.
A report from Real Estate Econometrics states that the percentage of commercial real estate loans in default across the nation has risen to 3.4 percent in the third quarter, rising more than half a percentage point from the second quarter. That 3.4 percent default rate is the highest since 1993, when it stood at a 4.1 percent default rate.
There's a lot more to the article but this is bad news for the AEC industry because as the number of defaults increase, you can expect their lending standards to tighten, making it harder for potential clients to access capital and leaving possible projects on the drawing board.
A report from Real Estate Econometrics states that the percentage of commercial real estate loans in default across the nation has risen to 3.4 percent in the third quarter, rising more than half a percentage point from the second quarter. That 3.4 percent default rate is the highest since 1993, when it stood at a 4.1 percent default rate.
There's a lot more to the article but this is bad news for the AEC industry because as the number of defaults increase, you can expect their lending standards to tighten, making it harder for potential clients to access capital and leaving possible projects on the drawing board.
Wednesday, November 18, 2009
ABI reaches highest mark in more than a year
The American Institute of Architects' Architecture Billings Index (ABI) reached its highest mark since August 2008 with its October rating of 46.1, up sharply from 43.1 in September and 41.7 in August. The August 2008 watermark came just before the fall 2008 credit crunch affected not only the AEC industry, but the entire economy.
As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending.
Even though the ABI has improved for two consecutive months, the October rating of 46.1 indicates a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 58.5, following the 59.1 mark in September.
"This news could prove to be an early signal toward a recovery for the design and construction industry," said AIA Chief Economist Kermit Baker. "On the other hand, because we continue to get reports of architecture firms struggling in a competitive marketplace with a continued decline in commercial property values, it is far too early to think we are out of the woods."
While Baker says it is too early to think we have emerged from the economic downturn, two straight months with an improved ABI rating stops the up-and-down pattern of 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, went back up to 43.1 in September and has now improved to 46.1.
Numbers that constantly move up and down make it difficult for architecture firms to make strategic decisions with any certainty that their fortunes are turning for the better. Clearly, two months with improved ABI numbers is not a large enough sample to determine with any certainty if conditions will continue to brighten, but any positive sign is one that will be welcomed by architecture firm leaders.
The new projects score was 58.5 in October, down slightly from 59.1 in September, but both months are ahead of the 55.2 in August, 50.3 in July, and 53.8 in June.
The bright spots regionally were in the South and West, posting their highest numbers in several months while the Midwest held flat for the third straight month and the Northeast dipped.
Regional averages were as follows: South (46.1, up sharply from 42.7 in September, 44.1 in August, 43.4 in July, and 40.5 in June), West (42.8, up sharply from 36.0 in September, 37.5 in August, 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April), Midwest (43.0, the third consecutive month at that number), and Northeast (44.3, down from 47.2 in September and 45.2 in August, but up from 37.8 in July and 42.8 in June).
The October ABI breaks down by sector as follows: institutional (48.7, up sharply for the second straight month from 43.9 in September and 37.5 in August), multi-family residential (45.4, up slightly from 45.1 in September, 43.4 in August, 40.7 in July, and 42.7 in June), commercial/industrial (41.7, up from 39.0 in September, bbut down from 45.6 in August and 42.9 in July), and mixed practice (39.1, up from 36.3 in September, but down 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).
Ed
As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending.
Even though the ABI has improved for two consecutive months, the October rating of 46.1 indicates a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 58.5, following the 59.1 mark in September.
"This news could prove to be an early signal toward a recovery for the design and construction industry," said AIA Chief Economist Kermit Baker. "On the other hand, because we continue to get reports of architecture firms struggling in a competitive marketplace with a continued decline in commercial property values, it is far too early to think we are out of the woods."
While Baker says it is too early to think we have emerged from the economic downturn, two straight months with an improved ABI rating stops the up-and-down pattern of 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, went back up to 43.1 in September and has now improved to 46.1.
Numbers that constantly move up and down make it difficult for architecture firms to make strategic decisions with any certainty that their fortunes are turning for the better. Clearly, two months with improved ABI numbers is not a large enough sample to determine with any certainty if conditions will continue to brighten, but any positive sign is one that will be welcomed by architecture firm leaders.
The new projects score was 58.5 in October, down slightly from 59.1 in September, but both months are ahead of the 55.2 in August, 50.3 in July, and 53.8 in June.
The bright spots regionally were in the South and West, posting their highest numbers in several months while the Midwest held flat for the third straight month and the Northeast dipped.
Regional averages were as follows: South (46.1, up sharply from 42.7 in September, 44.1 in August, 43.4 in July, and 40.5 in June), West (42.8, up sharply from 36.0 in September, 37.5 in August, 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April), Midwest (43.0, the third consecutive month at that number), and Northeast (44.3, down from 47.2 in September and 45.2 in August, but up from 37.8 in July and 42.8 in June).
The October ABI breaks down by sector as follows: institutional (48.7, up sharply for the second straight month from 43.9 in September and 37.5 in August), multi-family residential (45.4, up slightly from 45.1 in September, 43.4 in August, 40.7 in July, and 42.7 in June), commercial/industrial (41.7, up from 39.0 in September, bbut down from 45.6 in August and 42.9 in July), and mixed practice (39.1, up from 36.3 in September, but down 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).
Ed
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).
Ed
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).
Ed
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 special...like 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,
Bruce
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 special...like 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,
Bruce
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,
Bruce
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,
Bruce
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