Selling Fear

Consulting engineering is one of the few professional industries that may exploit fear as a means to increase revenues, expand the duration of customer relationships and escape the bonds of traditional commodity design and implementation. Using building systems as the basis for fear creation, consulting engineers may create comprehensive product and service portfolios that serve to protect cust...

02/01/2007


Consulting engineering is one of the few professional industries that may exploit fear as a means to increase revenues, expand the duration of customer relationships and escape the bonds of traditional commodity design and implementation. Using building systems as the basis for fear creation, consulting engineers may create comprehensive product and service portfolios that serve to protect customers throughout entire building systems cycles—a period of 15 years to 20 years. By focusing outside the traditional design and implementation offerings, consulting engineers establish direct relationships with end customers, eliminate commodity pricing as a basis for winning work and significantly reduce their business development efforts. Fear is the consulting engineer's most valuable sales tool.

Defining Fear

For building owners, fear is defined as the unexpected occurrence of building failure (or diminished functionality) that results in a significant negative economic impact. Building system failure is unpredictable and may occur at any time. It is the element that is not completely controllable by any building owner and, at the same time, represents the best business opportunity for the consulting engineer.

For consulting engineers, the value of their services may tie to the economic impact associated with a failed building system. Government facilities segment a portion of the operating budget to arrive at an amount of lost productive dollars. For a public use facility, the lack of consumer revenues, or conversely the cost of insurance payouts, measures potential economic impact.

Poorly operated building systems also have economic impacts. In this era of increasing energy costs, inefficient buildings drive energy consumption levels, resulting in higher operating costs—targets for consulting engineers to correlate service values to economic improvement.

Because a dollar value may be given to potential building system failure, the value of the consulting engineers' services provide a return on investment (ROI) argument for the building owner. By understanding ROI implications of their services, consulting engineers move from a commodity pricing discussion—where low price wins—to a dialog illustrating economic value.

Changing the Paradigm

Once a project is completed, the consulting engineer waits for the architect or building owner to start another project. The stop-and-go nature of the work rarely extends beyond the implementation phase. And, for many consulting engineers, the work is of a commodity nature—where price is the primary basis for selection.

Contrast that environment with a sudden phone call from a building owner who is distressed over a failed building system. Competitive bids, drawn out negotiations and discounted pricing are abandoned to solve an immediate problem. Price is not driving the process. Building failure or the economic impact of a failed building is driving the process.

The value to the end customer is not in the traditional design and implementation work. It is in the resolution of the failed building systems—occurrences that result in a direct economic impact to the customer. For the consulting engineer this realization forms the basis for a very different approach to market—a fear-based approach that leverages building systems and not architect relationships as the basis for long-term predictable customer relationships.

Establishing AIM

The assessments, implementation and maintenance (AIM) model is the most effective way to create a product and service-offering continuum that leverages a building system life cycle. AIM is comprised of the offerings in a consulting engineer's portfolio. It also is the basis for extending a single customer relationship for 15 to 20 years—a period that is longer than any traditional customer cycle. It is the solution to achieve low-cost revenue growth.

Assessments are service offerings focused on quantifying building system performance and assessing potential risk areas. Often offered under project names such as system reliability or energy consumption studies, these offerings provide the initial base line information to build a fear-based argument.

Implementation offerings are the traditional design and construction administrative activities that comprise 70% to 80% of total revenues for most consulting engineering firms. In a fear-based selling model, implementation would refer to corrective actions associated with any findings from the assessment studies. These projects are, because of their natures, not bound by such rigorous pricing structures. The consulting engineer is able to sell value and not a commodity.

Maintenance offerings allow consulting engineers to extend customer relationships consistent with the duration of the building systems. These are as diverse as the consulting engineer's imagination: maintaining authoritative building system schematics; conducting periodic risk and reliability studies; or, implementing monitoring and maintenance devices.

AIM extends a traditional two-year design and construction administration project to more than 15 years. Long-term customer relationships result in: lower business development costs as replacing completed projects with new clients is unnecessary; more profitable projects as direct competition is excluded; and higher levels of corporate revenue as revenue per customer metrics increase, though the actual number of customers may decrease.

Creating New Fears

Fear is not limited to the current building system environment. Fear also is based on the knowledge that consulting engineers gain through every customer project. Every project provides specific unique information about the customer—information to which no other entity has access. This information is an asset. And, as an asset, it is leverageable for benefit.

“If you own a customer's information, you own the customer” is a familiar business axiom. It dictates that having special knowledge of a customer allows the vendor to provide more effective and relevant solutions to anticipated problems—a distinct competitive edge. The concept of fear-selling takes this premise one step further. Specifically, having unique information from several customers offers options to analyze multiple site occurrences, identify trends and predict future events. This creates a fact-based building system reliability model that supports fear-selling activities.

The basis for this fear-selling tactic is the services information product (SIP) model. The SIP model advocates the capture of unique customer information from every services offering. This information is analyzed and a fact-based building system reliability model is developed. This information, once properly cataloged, creates the opportunity for new products—tangible revenue-producing offerings that diversify the consulting engineer's portfolio mix. And, because the information was obtained through the consultant's unique customer experiences, the product is able to be a strong market differentiator.

The Quantifiable Value Proposition

It has long been established that people rarely make a buying decision based on potential upside opportunity. After all, if the status quo is working, why would a buyer want to risk changing the current environment? Telling decision makers that their asset values will increase usually is a drawn-out unsuccessful sales approach.

Sell fear on a downside perspective. Building system failure has a dramatic impact on a buyer's psyche. Fear is quantifiable, reasonable and unpredictable.

Sometimes just changing a sales presentation from opportunity to downside consequences may be sufficient to move the buyer to a decision. If consulting engineers were selling building system optimization services, one approach would be to stress the expected savings from the potential project. The other alternative would be to highlight the lost dollars by not implementing a building optimization solution. The buyer may be more willing to engage in a building optimization project to fix a problem instead of optimize a system.

Benefits

The benefits of fear selling are very straightforward. Consulting engineers move from order-takers for design and implementation services to fear abatement specialists focused on protecting the building owner from potential disaster. Consulting rates increase as a correlation to quantifiable savings as opposed to the practice of competitive bidding—a practice that almost assures an unattractive profit margin.

Of greatest value, however, is the ability to extend the customer relationship to a period in line with the life cycle of the building systems— a timeline of 15 years to 20 years. Accomplishing this objective lays the foundation for increased revenue per customer metrics; a reduced need to acquire new customers; and a more developed relationship with customers.

Is fear selling for everyone? Of all the professional service industries, consulting engineering is one of the very few that has this option available. It is a powerful form of differentiation and it also creates a compelling case for the building system owner.





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