Monday, July 30, 2012

Facing Headwinds? Try Tacking Strategies

President Obama's favorite term for explaining (or excusing, some would say) his administration's lack of success in turning the economy around is headwinds. The word evokes the image of a strong gale pushing against the bow of a sailboat, impeding its forward advance. Perhaps that picture fits your own firm's struggle in this tepid economic recovery.

Except that headwinds don't stop a skilled sailor from moving forward. Using a technique called tacking, the sailor works at 45-degree angles to the wind, capturing its power to propel the craft windward. (A headwind also helps lift an airplane into the air, so I'm not sure that's the most appropriate metaphor.)

Nevertheless, thinking about the marketplace headwinds that A/E firms face inspired me to consider how we might use those forces to our advantage. What are our "tacking strategies?" I'm reminded that even in the Great Depression many companies flourished, often by flouting conventional wisdom. Could your firm do the same?

Let me suggest the following approach for developing tacking strategies for your firm:

First, identify the market headwinds that pose the greatest challenges to your firm. Here are a few that I've heard from my clients recently:

  • Clients are less loyal
  • Their budgets are constrained
  • There's more competition for less work
  • Price is playing a larger role in selections
  • Clients are thinking more short term
  • They are doing more work in house
  • We are viewed more as a commodity than ever before
Undoubtedly you can expand on this list. But I'd limit your list to no more than ten factors that are most significant to your business.

For each item, ask if you could somehow use it to your advantage, much as a sailor uses the power of a headwind to move against that wind. For example, consider declining client loyalty. Could you leverage that to your firm's advantage? Of course, because it cuts both ways. Just as your clients may be less faithful to your firm, so it is with your competitors. That opens up prospects for displacing incumbents with some cherished potential clients.

What about clients' constrained budgets? How could you possibly use that to your advantage? Well, I've had some clients tell me that their primary service providers no longer talk to them much any more because there's no money for capital projects. Yet they still have needs. That again presents an opening to woo new clients away from their recent providers, strategically positioning your firm for when the money starts flowing again.

Now develop tacking strategies for each "opportune headwind." You probably want to break each down to specific markets or clients, then define what steps are needed to leverage the situation in your favor. Concerning waning client loyalty, you might consider the following steps:
  • Identify potential openings (e.g., where the loss of key personnel may have weakened a competitor's position with the client)
  • Define apparent client needs that you could respond to
  • Make contact, offering your unconditional help
  • If there's interest, determine how to advance the relationship
Limited budgets affect most clients, so you might develop some low-cost or even free introductory services and resources—not simply as a marketing ploy, but to genuinely assist cash-strapped clients in need. 

I know some have a philosophical problem with offering anything for free. But this can be done in a professional manner without compromising the value of your services (in fact, quite the opposite!). You're going to invest time and money developing new business any way. Why not use that investment actually helping clients? See if that doesn't enhance your success in winning new clients—if not today with a specific client, then down the road.

Of course, give emphasis to follow-through. We let far more sales leads atrophy than we convert to contracts. That neglect is likely to be worse when the payoff is off in the distance. But if you're diligent in applying your tacking strategies, you will see them come to fruition, paving the way for a quicker emergence from these recessionary blues.

So don't bemoan the headwinds. Figure out how to use them to your advantage!

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