The mystery of marketing

Marketing is a constant source of intrigue for the architecture profession. We don’t understand it very well, so regard it with reverential awe. Marketing, we think, is the magic lamp that will make us rich. So we talk about it all the time, we ask our colleagues in hushed whispers for the secrets of their success, we even pay good money to gain insight into its hidden truths.

I’m under no illusions about my mastery of this dark art. But after all the lectures, seminars, forums and blogs I’ve attended or read, I at least understand why there’s so much fuss:

The outcome of good marketing
=
More clients

In other words, we get more clients because more of the right people come knocking on our studio doors. And by right people, I mean people who want what we do and have the money to spend on our services. The marketing industry has a term for these wonderful people. It calls them qualified prospects.

The job of marketing then is to elevate prospects from the more generic group of suspects, that is, anyone thinking of engaging an architect.

According to Winston Marsh, whose annual seminar sessions on marketing I’ve attended, the conversion of suspects to prospects is best achieved by letting the buying public know what we do. This is more than having a website and a business card, it’s about targeting the right suspects.

So how do we know if we’re targeting the right suspects?

Well, to quote Michael Bloomberg, “In God we trust, everyone else bring data.” So earlier this year, I started tracking our project leads. I picked through our old emails and pulled out key information for every prospect who has ever called, emailed or walked through our door. It was a revealing exercise, telling me for instance that after 5 years of practice this has happened 79 times.[1] And it was surprisingly easy to do. All I logged was four simple pieces of data:

  1. When each prospect made contact
  2. How she found out about us
  3. Whether we submitted a fee proposal
  4. Whether we won the commission

Since the aim of this exercise was to be systematic in understanding how prospects discover us, I established a list of ten categories that would group them according to the various marketing exercises we undertake (or others undertake on our behalf):

  • She reads this blog
  • She is a family or friend
  • She used the AIA’s Find an Architect service
  • She discovered us via online media
  • She is a past client
  • She visited a past project
  • She discovered us via printed media
  • She discovered us via television media
  • She came across our website
  • She discovered us via word of mouth

I filled in a simple spreadsheet (remember, with just four bits of information recorded against each lead) and amazingly rich information began to pour out of it. I now know which marketing exercises generate the most number of enquiries; which sources are the best at converting into commissions; and how these numbers change from year to year.

What follows is a summary of my findings, and a bit of a guide to help other young architects gain the same insights about your practices as I have ours:

Suspect to prospect

As I’ve noted previously, a colleague of ours relates the story of Peter Maddison, director of Maddison Architects, who disappears whenever the practice grows a bit quiet. He schedules lunch after lunch after lunch, catching up with old friends and acquaintances. He asks what they’re doing and what’s happening in their lives. In so doing, he implicitly reminds them that he’s open for business. Weeks or months later, when that restaurant site is purchased or new office space leased, his lunches pay off.

Our strategy is less boozy and, I have to confess, less targeted. We go for the scattergun approach: more is more. We put ourselves and our work in as many places as possible: on our website, this blog, Twitter, Instagram, FacebookPinterestHouzz and Find an Architect. We employ marketing campaigns for individual projects in printed and online media. We remind our friends and family that we’re architects, and encourage past clients to evangelise on our behalf. We even initiated an unsolicited urban renewal project for our street, and met with all our neighbours to promote it.

But the data speaks volumes. I now know that online media generates the greatest percentage of prospects (25%), but we are extremely unsuccessful in converting them into clients (5%). In contrast, our family and friends represent the second greatest percentage of prospects (19%), and we are very successful in converting them into clients (73%). Printed media and our website, perhaps the two most traditional avenues for marketing, together represent only 2% of our prospects and 0% of our clients.

lead origins

For our young practice, it can feel it times like we’re just waiting for the phone to ring. This data puts our impatience into perspective, and makes me feel pretty good about things. Considering all ten categories, spread out over the last five years:

A prospect makes contact once every three and a half weeks.

Prospect to client

From a business-planning point of view, understanding the next step – what proportion of prospects convert to clients – is the most important insight to gain. This helps in an egocentric way to measure how successful we are at wooing our clients, but more pragmatically reveals how many projects we’re likely to win each year and, consequently, how much money we’re likely to make.

I can’t stress enough how important this is. Despite architects’ collective reputation as money-shy, the regularity of new projects coming through the door should underpin your entire financial management strategy. The key question really is: how much money do you want to earn? There’s some simple reverse-engineered math you can do here:

Salary you’d like to earn in a year = $100,000
Average fee for a project = $50,000
Average duration of a project = 2 years
Fee earned in a year from an average project = $25,000
Number of projects needed to earn salary = 4

My little spreadsheet gives us the hard numbers: we are asked to prepare fee proposals for 56% of the leads we receive, and 59% of our fee proposals convert into projects. Multiply these numbers together, and I find that 33% of our enquiries lead to commissions, or in other words:

For every new project we need the phone to ring three times.

lead conversion

If we multiply the regularity of our enquiries (once every three and a half weeks) together with our success rate in converting enquiries into projects (once every three enquiries), we discover another great bit of data:

We win a new project every ten and a half weeks.
Or
We win five new projects every year.

Growth

This is where the data starts to get really useful in terms of working out what to do next, how better to market ourselves. Back in 2010, pretty much no-one had ever heard of Mihaly Slocombe. Five years on, we’ve been published in various places and have won the odd award, so maybe we’re a little bit famous. A further five years from now, who knows where we’ll be or what we’ll be doing?

All of this means that the above information is dynamic. Some sources have grown since we started our practice, others have shrunk. Some have become better at converting enquiries into projects, others have become worse. My spreadsheet once again comes to the rescue, allowing us to track the overall growth year by year for all enquiries, for each prospect category, or for commissions relative to enquiries.

Project leads via online media is a telling example. From 2010 to 2012, we received zero leads from this source; in 2013, we received five; in 2014, fourteen; and so far this year, one. This growth has meant online media has become one of our most prominent lead generators. But conversions continue to be very poor: in 2013, the five leads converted to zero commissions; in 2014, fourteen to one; and so far this year, one to zero.

Happily, this is an isolated phenomenon for us. I think the poor conversion rate is due to the absence of trust inherent in a lead generated by online media, but this is perhaps a subject for another post.

overall growth

Overall, the picture is pretty good, very good in fact. While our successful conversion rate has always been more or less static (one in three), both our enquiries and our commissions are on an upwards trend:

More enquiries
= more commissions
= more projects each year
= more money

This means all sorts of things: maybe we need to think about taking on more staff; relocating our studio to a larger space; increasing our fees; upgrading our accounting system; engaging an office manager… All very good questions that only come about once we analyse our marketing position.

Yet despite the importance of this self-awareness, I imagine very few practices bother to gather this data.

If you’re anything like me, you won’t be satisfied with intuition or reactionary tactics to ensure your practice thrives. You’ll need to base your decisions on a rational understanding of the game state of your practice. This means collecting data and analysing it. It means ensuring you have everything from accurate timesheets, to productivity forecasts, and project by project financial analysis. Importantly, it means demystifying marketing, if not the elusive secrets to marketing success, then at the very least the dynamic impact it has on your practice.

Good luck.


Footnotes:

  1. While we officially founded our practice in 2010, we received commissions for four side projects prior (while still working elsewhere). These projects have been figured into our calculations.

Image sources:

  1. Lead origins, this and subsequent images courtesy of author.
  2. Lead conversion.
  3. Overall growth.

Author: Warwick Mihaly

I am an architect, writer, teacher and father.

12 thoughts on “The mystery of marketing”

  1. A great article Warwick and it really confirms the information we discuss when we try and cajole architects into getting serious about marketing.
    You’ll always find that when you can get face-to-face with clients your conversion rate will be highest but that doesn’t mean you should give up on endeavouring to improve your cyberspace or print conversions. Just ask yourself how can I make meeting people on line as good as meeting them face to face? As an aside, when I visit your web site.there’s nothing that really introduces you and your partner as the wonderful people you are in the flesh.
    There’s lots more we could reflect on but congratulations on what you are doing. Just keep on keeping on, work at improving the marketing you are doing and reviewing the result and you’ll have the bushiness rolling in.
    Well done!

  2. What a fabulous article. My good friend Geoffrey Moyle suggested I read this and I’m very pleased I did. Also it comes as no surprise that Mr Marsh’s work has contributed to your marketing knowledge. Legend that he is. We will be nudging our Flying Solo community over here to have a read. Thanks again!

  3. Fantastic article and very interesting to see those statistics. We have been doing similar analysis of enquiries and conversions for many years. If you are not doing this its like throwing a dart at a grape with a blindfold on! Our enquiries are around 250/year and about 90% are from online media with an average 10-20% conversion rate (of the 50 or so that make it past the first phone call) although the conversion rate has seen a slight decline in the past year as competitors increasingly (deliberately) undercook budgets in their proposals, charge on a % basis and make vague if not fanciful promises. Sometimes clients are happy with someone telling them what they want to hear and we are ok missing out on these jobs as the outcomes are inevitable. These disgruntled clients often come back to us years later. I have 3 on my desk at the moment with Clients looking for a miracle.

    We try and funnel all marketing back to our online mediums and have very stringent screening processes with enquiries to ensure that when we do meet a Client or prepare a proposal we at least have a fighting chance of winning the project. As we tend to be short-listed with the same group of competitors and many of those competitors consistently ‘pull the wool’ to win jobs we now ask a potential client who we are competing against so we can clarify the value in our fixed fee service against our competitors % based fee. It seems the bigger the budget the more ‘creative’ architectural firms are being to win jobs. Winning a job is one thing but delivering on promises and budget expectations to achieve a built outcome is another and unfortunately for the reputation of the industry the latter remains a mystery to many.

    1. Thanks for being so open with your numbers, Clinton. I was wondering when someone was going to volunteer them! It’s notable but probably not surprising that such a significant majority of your enquiries come via online sources. Can I ask what you do to whittle down the 250 enquiries to 50? You also infer that a big part of your initial contact with potential clients is about educating them. We find this a constant battle – too much and you overwhelm people, too little and you don’t get your message across. Do you find this as well?

  4. Great article Warwick. Heard you interview with Robert last week, which was refreshing to hear an architect talking about business as an interest also. I share your sentiment in this regard, it is another swath of problems needing elegant solutions on of the very reasons I enjoy architecture. Having started my own practice 3.5yr ago, it has been a long hard slog, and fully expected things to move much quicker then they have.

    Back to this article, I would love to share my numbers, but would have to say at the moment they are too vague to share. I do know that I have a conversion rate of proposals submitted of about 50% or a little less. You have inspired me to do this exercise for myself. I noted a real shift in the number of leads coming from my website in recent months since giving it a well needed overhaul. along with this is a more qualified lead, that know better what I am about and ready to at this point.

    Keep up the great work.

    1. Thanks David, and reassuring to hear your website upgrade did good things for you. As I mentioned in my interview, we’re doing this ourselves. Hopefully the new site will go live in a couple of months, fingers crossed it gives us more leads of the sort we want.

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