Setting sights on new markets

May 2006 » Columns » VIEW FROM THE TOP
Engineers are great tacticians. But ask a consulting engineer to develop a marketing plan to position a firm strategically for greater than 10% growth or to diversify markets, and many would be treading in unfamiliar waters.
Larry Peterson, P.E.

Headquarters: San Diego
Number of branch offices: 65
Total number of employees: 2,000
Year firm was established: 1961
Total billings for last fiscal year: $188.4 million

Engineers are great tacticians. Ask any engineer for directions and we definitely can get you from point A to point B—and draw the map (to scale). But ask a consulting engineer to develop a strong marketing plan to position a firm strategically for greater than 10 percent growth or to diversify markets, and many would be treading in unfamiliar waters.

At Kleinfelder, we recently updated our corporate strategic plan, and company leaders agreed that our objectives during the next five years are to become a much larger organization that is better able to capitalize on the geographically diverse nature of our company and to diversify our services to local and national clients.

In short, we needed to develop and implement a plan that would help us provide a variety of services to our existing clients while entering new markets across our geographic regions.

To begin this effort, several of our principals began researching potential new or expanded markets for the company. Staff looked at a variety of topics in determining whether a particular market would be viable, asking questions such as: Is the size of the market worth pursuing? Does Kleinfelder possess, or could it develop, the necessary people and services required by these markets? What is the short- and long-term potential for revenue from these new sources? At the conclusion of our strategic plan update, we identified a final list of target markets—transportation; energy; water resources; federal; and major retail, commercial, and industrial firms. While these five new markets were identified as "corporate initiatives," we stressed that our local and regional offices are still free to pursue local markets that make sense.

Although we were already providing consulting services to clients in several of these identified markets, under the new initiative we would develop new strategies and rededicate ourselves on a corporate level to expanding our market share in these areas.

One of our greatest challenges has been to redirect our focus from inside-out to outside-in. We needed to understand that to provide more and different services to our clients, we had to "walk in their shoes." To that end, we established a continual market research effort of both primary and secondary sources for key markets. This research effort consists of a national survey performed by an independent research firm to identify market drivers, client concerns, and perceptions of A/E/C firms industrywide.

It also includes researching secondary sources on a continuous basis to develop a better understanding of the environment in which our clients are working. Getting information is good, but we still need a strong tool to be able to track and share the information companywide. So, we began researching and developing a better customer relationship management system.

Our professionals spend a great deal of time learning about our clients and the issues they face. Since our professionals are wellequipped and trained to collaborate on projects, we want to develop the proper tools to expand the collaboration on our efforts to better understand our clients and their environments.

Part of our strategy in capitalizing on these new markets is centralizing our market research, improving corporate positioning, and leveraging client relationships across the firm. Some of these market sectors are best served by centralized management of the client's portfolio so proposals, scopes of work, reports, and invoices are consistent across the firm.

For example, we have established relationships at the corporate level with national retail firms that have construction projects around the country. Rather than these firms having to identify and develop relationships with Kleinfelder personnel in every geographic area of the country where they may be doing business, we establish one person at Kleinfelder who serves as the liaison to this national firm. This single point of contact arranges internally for Kleinfelder's services no matter where the project is located.

This has helped establish strong, "trusted-advisor" relationships with numerous national companies.

With our new strategic plans have come challenges. In transportation, for instance, the sheer size and diversity of the market, both in terms of projects and entities undertaking these projects, is a challenge. Just having a consistent pursuit and delivery system is difficult. We intend to address this with a modified business development structure involving both corporate and operational business development professionals.

For federal projects, one major challenge is having contract vehicles in place. It is relatively easy to establish a relationship with local military bases, but you still must have a contracting vehicle.

Getting these contracts is highly competitive, with most of the larger, national firms pursuing them. Increasingly, the challenge is contract set-asides for small companies. Our challenge has been identifying the right large firm—or the right small firm—with which to partner so that we can be part of these contracts, as well as deciding which contracts to pursue as a prime.

As we pursue these five strategic markets, the keys to success will be consistently positioning the firm as the market changes and integrating corporate initiatives with local operations. In the end, it may well depend on Kleinfelder looking like one big company to some clients, and a small local firm to others.

Larry Peterson, P.E., is senior vice president of sales and marketing for Kleinfelder, Inc. He can be contacted at lpeterson@kleinfelder.com.


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