2020 will likely be remembered as the year that changed everything—marked by a global pandemic, a hectic election cycle and social change. Yet in spite of it all, many Architecture, Engineering and Construction (AEC) firms have managed to thrive, riding the waves of uncertainty and resetting their course.
The Hinge Research Institute’s newly released 2021 High Growth Study: AEC Edition tells their story. The study opens with data that reviews the industry as a whole, comparing AEC firm performance and trends to other professional services industries. Then it takes a closer look at the fastest growing AEC firms. The report compares high growth AEC firms (those having a compound annual growth rate of 20% or greater over a three-year assessment period) against their slower, no growth peers.
About the Study
Firms of all sizes were represented in the study, and it included companies from across the globe, with the vast majority of firms doing business in the United States. The analysis covers 281 AEC firms, representing a combined revenue of $75 billion and more than 90,000 employees.
Purchase the 2021 High Growth Study: AEC Edition
Doing Business in Challenging Times
Now, it should come as no surprise that given the challenges of 2020 “unpredictability in the marketplace” is the top concern among most professional services firms, including the AEC industry. But for AEC firms in particular, a shortage of top talent continues to be a leading business challenge—one exacerbated by rising compensation costs and the added stress of managing an even more remote workforce. Firms were also worried about changes in buyer behavior.
In this article, I’ll highlight a few things that high growth AEC firms are doing differently in the face of today’s unprecedented market uncertainty.
AEC Firms That Conduct Research Are Growing Faster
The most successful AEC firms are finding answers by asking the right questions. High growth AEC firms are more likely to conduct research on their target audiences compared to no growth firms. Additionally, they are likely to conduct research more frequently, with more than 80% of high growth firms doing so at least quarterly. In fact, AEC firms conduct far more research, more often, than their peers in other professional services industries.
High Growth AEC Firms Are Increasing Their Marketing Budgets
Until recently, high growth AEC firms’ marketing budgets were comparable to slower growing firms. But today, high growth AEC firms are investing significantly more in marketing, dedicating almost 27% of their revenues to this function. Over 40% of high growth AEC firms increased their marketing budgets during the COVID-19 pandemic, while a similar proportion of No Growth firms decreased their marketing spend. For all AEC firms sampled, median reported budgets jumped an unprecedented 200%.
High Growth AEC firms also spent their investment differently, focusing on digital strategies to a much greater degree than their No Growth peers.
For a detailed breakdown of what strategies, techniques and tools they invested in, check out the full report here.
High Growth AEC Firms Generate Half Their Leads from Online Sources
How do they do it? We know that professional services firms are more likely to ground their marketing strategies in ongoing research. Simply put, high growth AEC firms understand their target audiences, and they select their digital marketing techniques based on that understanding. Looking across the AEC industry, new business leads generated from digital sources (e.g., website, email, social media, digital advertising) have soared by 64% in the last year. And high growth firms are thriving because of it.
Furthermore, over a third of high growth AEC firms report having mature marketing and sales software automation strategies in place, which makes their digital lead generation more efficient.
While AEC firms’ have been gradually adopting digital marketing techniques for several years, the pandemic has dramatically increased digital engagement across the industry—driven, no doubt, by the sudden demise of traditional face-to-face networking.
How else has COVID-19 affected the industry?
High Growth AEC Firms Are Saying Goodbye to the Office
High growth AEC firms are more than twice as likely to say goodbye to office life in the era of COVID-19. Most of these firms are either downsizing or going fully remote. Only 26.6% of high growth firms reported plans to keep their office as-is. No growth firms, on the other hand, were more likely to keep their office configuration (35%), although a similar proportion reported a shift to part time remote work.
Overall, high growth AEC firms have experienced much less negative impact from COVID-19 than their no growth peers. As it turns out, they were more likely to have experienced a positive impact or no impact. And of the 50% who reported a negative impact, over half were still able to grow.
Perhaps Their Focus Was in the Right Place?
We get it. Increasing your marketing spend or investing in more digital techniques to generate online leads take time may be too much for you to bite off right now. To address this challenge, we identified a select group of marketing techniques that provide exceptionally strong impact for the level of time and effort they take to implement. To identify them, we subtracted the effort required from the impact realized and developed a prioritized list of the seven tactics that deliver the most bang for your buck. Here are the top three:
The Bottom Line
With the mounting pressures of today’s marketplace, there’s no one better to learn from than the firms that thrived in the face of the pandemic. We would be wise to follow their lead, especially their emphasis on conducting research and digital marketing. What can you learn from these high-performers? And how far will it take your firm?
Want to see the full results of the 2021 High Growth Study: AEC Edition? Purchase the full report here.