We have referenced Ideal Project Profile (IPP) in more than a few of our previous blogs. If you recall, the Ideal Project Profile is the project type where your AEC firm can add the most value, have the highest win rate, differentiate the best, drive the highest level of profitability, and ultimately support your firm’s growth goals.
This methodology takes courage and a dedicated effort to redirect your firm’s focus to the IPP, especially when dealing with firms that have been in business for some time. This pivot can be quite challenging as you tend to start leaving non-ideal customers behind. But, we know that this move is the best way to grow a business and add increased value to your clients.
Today, we will look at why firms in the AEC industry must define their IPP, use it to their advantage, and leverage technology to drive more work that fits their firm’s IPP.
How We Identify Our Ideal Customer Profile
At TrebleHook, we talk about our Ideal Customer Profile (ICP), the equivalent of an IPP for an Architecture, Engineering, or Construction (AEC) firm. The reason we put so much emphasis on who we pursue is simple. By identifying firms in our ICP, we can focus all of our efforts on the firms where we can add the most value and develop the deepest relationships that ultimately drive the best growth for both TrebleHook and our Customers.
When pursuing prospects in our sales process, we look at many factors to filter the ideal from the non-ideal. Our general definition at TrebleHook focuses on mid to large AEC firms with multiple locations or multiple divisions. Typically these firms have some level of dedicated business development and marketing and a desire to grow and improve their business. Additionally, these firms usually have multiple systems within their technology stack that need to be centralized (ERP, Project Management, File Management, etc.) and generally good people to work with.
Is the firm struggling with managing contacts and client data? Are they using spreadsheets or meetings as a way to manage projects? The more we hear “yes” to these conditions, the more value we know we can provide to these firms.
Truthfully, TrebleHook is explicitly built to solve these challenges, so we know that we will likely win their business. But, and this is a big BUT, we also know that we will enable them to be more successful.
How Does This Translate to My AEC Firm?
In the same way we pursue customers (our ICP), it’s all about AEC firms’ Ideal Project Profile (IPP). Firms must have the ability to pursue and land the right types of projects. In fact, many firms have a Go/No-go process to help them determine if they should dedicate resources to winning the work.
Some firms have a relatively complex and formalized process with points and weighing systems to develop their project schedule around profitable projects. However, we often see decisions made in an open roundtable discussion or just by instinct with many firms.
The big takeaway is that firms generally recognize the benefits of pursuing projects that fit their IPP. However, they are not always focused in the right direction or cannot easily convey their Ideal Project Profile. This lack of focus costs them time and money that could be better spent elsewhere.
The Importance of Defining Your IPP
So, what can you do to get started? The first step is to define the IPP of your AEC firm.
Are you dealing with a repeat client or trying to crack into one? Is the project in your sweet spot? Is it the type of work you have demonstrated success with in the past and know you can make a decent profit, or is it a new market you would like to tap into?
Are your chances of winning worth the cost of pursuit, both in terms of your actual cost and the opportunity cost of potentially having to pass on other work? Do you have the resources to dedicate to the project if you win it?
Defining your IPP and having the means to identify ideal projects early in your process is the key. By doing this, you will know where to spend your time and resources to ensure you win more often and make the profit to need to earn. We will be releasing a toolkit to help you define and document your Ideal Project Profile in a future blog.
Pursuing Your IPP Impacts the Cost of Pursuit
The cost of pursuits can significantly weigh on a firm’s profitability. The average cost of pursuit varies by firm and can range from moderate to very high. Whatever the case, it is not a fixed cost. Cost of pursuit is a necessary expense, but it can be managed and reduced by leveraging proper systems and strategies.
To put it bluntly, you need to determine whether or not to dedicate resources to chasing a project as early as possible. It is essential to drive the focus of your business development efforts in the right direction, but also crucial toward dedicating other limited resources from departments like marketing, estimating, and preconstruction where they can add the most value.
At TrebleHook, we are very stringent about our pursuit process based on our Ideal Customer Profile. When we engage with an ICP, we throw everything at the pursuit, including the kitchen sink. We engage the entire team, entertain multiple discovery meetings, prepare for onsite visits to meet key stakeholders, and, ultimately, invest significant time and resources to land the customer.
Conversely, when we engage with a non-ideal customer profile, we significantly limit our engagement to minimize pursuit cost. This is often tough because we are all good people and want to help everyone. But, we know that an intense focus on the ICP is the best way to grow a business.
Going after more projects that meet your IPP lowers your cost of pursuit, increases your hit rates, helps drive successful project outcomes, and earns firms more profit. At TrebleHook, we have developed a simple but powerful solution to help firms focus on projects that meet their IPP. We call it the TrebleHook Score.
We work with our customers during implementation to build their IPP into TrebleHook so that every time they enter a potential new project, they are served up a TrebleHook score. A simple A, B, and C scoring system helps firms quickly identify where they should be focusing their attention, efforts, and resources to pursue and land the right projects.
The Final Verdict
In wrapping up, leveraging technology for competitive advantage in the marketplace is not a new concept. Today, firms are already using technology to expedite processes for other departments like finance, HR, construction project management, etc. Why do project pursuit tools seem to be lagging behind in adoption?
The answer is usually “we’ve always done it this way” or “we haven’t found the right system yet.” It makes sense as most of the tools available today are CRMs built for companies selling products and services.
Most CRMs are not built for project pursuits, so they do not think like your business and are not built for your business. Talk to us about how we can help your AEC firm build your IPP into a powerful project pursuit tool that will drive you to pursue and land more of the right projects.