3 Customer Trends Your Firm Needs To Be Prepared for

Posted by Kristen Monsey on March 4, 2019

team working

With ever shifting market trends, architecture and engineering firms often struggle to keep up as they try to remain relevant and profitable. Clients are procuring services in new ways and hold different expectations than in years past.

In the 39th Annual Deltek Clarity A&E Industry Study, several shifts in client behavior are explored along with how they will impact how business is conducted in the future.


 

Deltek 39th Annual Deltek Clarity A&E Industry Study


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Customer Loyalty Is Declining

With competition increasing in the A&E industry, it’s becoming more and more difficult to retain clients and foster a loyal relationship. Clients are becoming “pickier” and more likely to shop around—making it easier for competitors to lure them away.

Clients are also more willing to turn to different providers for different functions or responsibilities, rather than put all their eggs in one basket with a single firm. This is a significant shift from the more traditionally loyal customer base of the past.

Because of this shift, architecture and engineering firms need to be hyper-focused on nurturing client relationships and staying on the cutting edge of digital transformation, providing a level of comfort to their clients that competitors won’t be able to beat.

In this regard, our research highlights some potential challenges. Nurturing client relationships is still the number one business development challenge that A&E firms face. In addition, keeping up with technology trends tends to still be limited to high performers and large firms. With clients expecting more than ever, the rest of the industry is going to have to catch up with these high performers if they want to compete and be successful.

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Clients Are Demanding More for Less

As corporate customers push back more and more against concepts such as billable hours, firms are feeling continued pressure on their traditional pricing models. Clients are demanding more well-defined, measurable outcomes in the form of fixed fees, in addition to greater visibility and transparency around project costs.

Plus, new demands around professional services fees are making it more difficult for A&E firms to maintain healthy profit margins. However, some firms have put new technology in place that provides real-time visibility into project costs, helping them more easily navigate the increasing demands of clients and keeping them ahead of the game.

Project Complexity Is Increasing

As projects and their delivery programs increase in complexity while fees continue to trend downward, many firms struggle to manage the difficult balance between profits and costs.

Deltek’s Clarity Study also revealed that due to this increasing project complexity, there is a shortage of experienced project managers who can manage these projects—further compounding the problem.

Adding to the level of complexity is the new challenge introduced by the growing adoption of BIM, which is driving demand for more intelligent buildings and for designs that push previously accepted boundaries.

To succeed in this increasingly difficult operating environment, will require that firms try new approaches for dealing with these challenges.

What’s the Upside?

To remain competitive and profitable firms must boost their agility and transparency. This will also help to satisfy clients looking for a higher level of visibility on their projects. To avoid project cost overruns, firms must also maintain their ability to capture new revenue for work out-of-scope.

A&E firms implementing cutting edge technologies to streamline their operations are realizing significant benefits. Not only are these technologies helping to improve their productivity and efficiency—they are also enabling them to make better business decisions due to the increased visibility they get from real-time and historical data. 

In short, introducing the right tools and solutions provides A&E firms with the data and insight they need to succeed in an industry with growing client demands and project complexity.

If they want to effectively serve the clients of tomorrow, A&E firms MUST embrace new technologies today. 


 

40th Annual Deltek Clarity A&E Industry Study


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