10 Marketing Concepts for Architecture Firms

In service of introducing new ideas into the field of architecture, we've compiled a list of 10 important marketing concepts to think through with your team and reorient your marketing initiatives from being passive to active. We've even included some bonuses!
By
George Valdes

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Introduction

In a typical Architecture firm, marketing is much more focused on Brand and Communications and operates as a reactionary function that responds to ad-hoc deadlines while serving as a support function for other teams. While modern data driven marketing teams in other industries do encompass Brand and Communication functions, the push towards measurable outcomes has focused organizations to understand the effectiveness of each dollar spent. In light of this, we'd like to introduce you to 10 concepts that are critical in order to run a modern marketing organization.

Target Audience / Market

One of the earliest, highest impact activities your firm can perform is defining you target market or audience. Essentially, who are the people who are most likely to request or search for your services -- what is their demographic? For architecture firms, the answer to this question is a mix of internal and external constraints.

  • What are you or your team / network good at?
  • What typologies of projects are you best suited to work on either through work experiences or connections?
  • How complex are the ideal projects you'd like to go after?
  • How are they currently being served?

Once you have a clear target audience, the rest of the definitions in this article will be informed by that.

Marketing Channel

In simple terms, a marketing channel is the way your services get in front of a potential client and is also known as a distribution channel. You can think of trade shows, meetups, Nextdoor, Houzz, your website and blog, as examples of marketing channels.

Inbound Marketing

Inbound marketing is a specific strategy for attracting the attention of prospects, and educating them via informative content before they are even ready to buy. The goal is to provide solutions and value before they even fully engage you. It’s a cost-effective way to convert strangers into customers and promoters of your firm. Channels typical of inbound marketing include — Organic Search, SEO Content, and Social Media.

Some examples of Inbound Marketing

  • SEO optimized Blog Posts
  • Newsletter
  • Publications
  • SEO optimized websites
  • Social Media
  • Nextdoor posts
  • Houzz profile
  • Owned Meetup

Outbound Marketing

Outbound marketing is a traditional and costly strategy seeking to potential customers. Outbound marketing includes channels and activities such as trade shows, seminar series, cold calling, and submitting RFPs and RFQs.

Some examples of Outbound Marketing

  • TV/radio advertisements
  • Telemarketing/cold-calling
  • Email marketing
  • Trade shows
  • Newspaper advertising
  • Press releases
  • Direct mail (brochures, postcards)
  • Paid Advertisement
  • Branded marketing (newsletters, key chains, pens, even flash drives)
  • NextDoor posts
  • Social direct messaging

Client Journey

For our purposes, the client journey, also known as the sales journey, is the series of steps your future client is likely to take before contracting an architect for design services; from awareness, to interest, to negotiation, to making a decision, and signing the contract. We’ll be very specific about where we are in the client journey when we talk about the various tools available. It's important to note — the client journey for each project type might look very different. Understanding the types of services you are best suited to deliver competitively, according to your resources and local business environment should determine the project types you will focus your efforts on. The goal is to provide the highest quality experience for your prospective clients.

Below is an example of a journey for a family looking to build their own home.

The journey begins with a new addition to the family which leads to a period of research. Your marketing team should be able to map out the series of questions, the research and the network of consultants (in this case brokers) that a potential client will use before they even consider reaching out to you as the architect.

Once you understand this journey, you can then build an experience around them by developing in-depth content that helps to answer these questions and provide guidance before they need your services. What you've done by this point is made it easier for them to trust you and this make your firm an early contender for their project.

Triggers kick off the demand for a change. In this case, the need for more space due to the upcoming birth of a child is a trigger for wanting to build a custom home.

Top of Funnel

Top of funnel describes the early stage of the client journey and the marketing activities best suited for awareness. These activities typically involve campaigns that seek to introduce your firm to a broader audience in order to pique their interest. At this stage, your future client might not be interested in any services but may start researching.

Marketing Qualified Lead (MQL)

An MQL is a lead that has expressed interest in your firm through engagement with your brand. Typically an MQL is associated with having signed up to some company newsletter or other transactional event that gave your firm permission to engage with them. It's important to not view MQLs as a monolith because they could very well be comprised of an audience that is not a potential client i.e. students. Working with your team to segment these leads will help you prioritize your downstream marketing initiatives.

Business Development Qualified Lead (BDQL)

Adapted from the more widely known Sales Qualified Lead, the BDQL is lead that has already reached out to your company and is interested in having a conversation about an upcoming project.

Conversion Rates

Conversion rates simply track the percentage rate of conversion from one stage through the next of your client's journey. It helps you track the progress of a lead down the funnel through to when they've signed a contract and are having design services rendered.

Account Based Marketing

Account Based Marketing (ABM) is a strategic organizational framework for aligning marketing and business development teams in order to target specific potential clients. The strategy typically entails finding key decision makers through a mix of outbound marketing campaigns, mapping their web of influence, and delivering the right message at the right time to those that can be champions for your organization and key decision makers. As opposed to blindly announcing your message to a broader, unqualified audience you identify the key accounts you would like to acquire.

Let's take a look at Developer XYZ.

Developer XYZ →    COO {Decision Maker}, Director {Influencer}, Associate {Champion}

We were introduced to Developer XYZ through an Associate who became our internal champion at the company after they saw us on a LinkedIn ad and downloaded a free pro-forma model on our website to help them calculate the potential value of a deal (very fictitious scenario!). After a couple of initial conversations, we've learned that the Director has a lot of influence in the company and is well respected for their tastes. The associate has informed us that the Director is very close to the COO and would like to meet with us in order to understand what we can offer.

After months of building up goodwill and a clear services scope, we can now approach the COO with a proposal that is tuned to their needs.

What is critical here is that an ABM model helps you side step the competition by having a "multi-threaded" relationship within your prospective client's organization.

Lifetime Value (LTV)

What is the total revenue opportunity value of each client relationship? LTV helps you understand the opportunity cost of every relationship you're building with past, present, and future client. Over time you can develop more refined projections by each client and project type. For example, due to the nature of the business, designing the first retail store for an emerging clothing brand could lead to a large account with repeat work over years. What might have been a project worth $100,000 of revenue could be worth millions. In fact, many large firms found their early growth this way. Alternatively, a residential client might only need a new house every 6-10 years. For the purposes of this article we'll look at LTV as part of a larger equation concerning marketing spend.

A simple categorization might be:

Low Repeatable Volume, Small Account Size
Residential Home Owner — every 10+ years
Retail Owner — every 1-2 years depending on their business model

Low Repeatable Volume, Large Account Size
Residential Home Owner — every 6+ years

Repeatable Volume, Large Account Size
Residential Developer — every 1+ Year depending on their volume of upcoming work
Commercial Office  — every 1-2 years depending on their business modelHospitality — depends on their local growth model
Education — depends on the institution

Highly Repeatable Volume, Large Account Size
Retail Rollouts — several per year
Commercial Developer — every 1-2 years depending on their business model

Included as part of a strong due diligence process during client intake, a potential client's LTV could help you decide how to proceed with the opportunity and help you modify your proposal accordingly.

Cost Per Lead (CPL) (Bonus!)

Now that we understand the definition of a MQL and BDQL, we can now shift our attention to the cost of acquiring those types of leads.
Cost Per Lead breaks down the attendant costs of all your marketing activities in relation to top of funnel activities divided by the number of leads you acquired.

Let's say you spent $1000 on an event. How many new contacts did you make from that event? Of those contacts, how many of them looked like they were in need of your services in the near term?

Let's assume you made 50 contacts. After review, you found that you had about 25 potential leads of new projects. Your CPL for this particular marketing activity would be:

$1000 / 25 = $40 CPL

Each of your marketing activities can be grouped in order to understand their impact in aggregate. CPL is just one number to keep track of in terms of marketing efficacy. Your customer acquisition costs (CAC) tell the real story about your costs in relation to your win-rate. The balance between CPL and CAC will help paint a fuller picture about where you should allocate additional resources specific to your target market.

Client Acquisition Cost (CAC) (Bonus!)

How much does it cost your firm to actually acquire a new client?  Client Acquisition Cost considers the marketing costs associated with the acquisition of every new client.

Why does this matter?

Depending on the typology of a given project you might find that the inherent margin (we encourage all architects to budget with margin in mind) determines the strategy. Low revenue, high volume work necessitates a low-cost long-term inbound strategy like SEO driven content while higher-margin, long term projects can afford a higher CAC and can leverage paid channels.

So how do we calculate it?

To calculate CAC, divide all the costs spent on acquiring more clients (marketing expenses) by the number of clients acquired in the period the money was spent. For example, if a client spent $100 on marketing initiatives in a year and acquired 100 clients in the same year, their CAC is $1.00.

But how do I know which channel is really working? Breaking out your CAC analysis by channel will demonstrate where you are seeing the highest return for every dollar spent.

How do I know when I'm spending too much? Research shows that architecture firms spend about 4-6% of their revenue on marketing. If your firm cushions revenue with a 20% profit margin for your first project, then your acceptable CAC will draw down from that profit margin. At 30% of that margin you would land at a total of 6-7% of your projected project revenue (not including additional services which your team should be incredibly dogmatic about -- but that's for another post.)


Let's see what that might look like in an example:

Marketing Budget (not including headcount)  
Average Revenue per Project (By typology) $100,000
Dedicated Profit Margin (20% not including CAC) $20,000
Recommended Marketing Spend (1/3 of Profit Margin) $6,6667

Payback Period (Bonus!)

Your marketing initiative's payback period is the duration of time that it takes to recoup your initial investment. Put another way, if you spend $100 on marketing today, how long will it take for you to recoup that investment. Due to the very long nature of sales cycles in Architecture what we want to make sure that we do is commit the first invoice to whatever initiatives brought that client in the door.

For example:You helped organize an event that cost the firm $5000. At that event you met a developer that was interested in working with your firm on a new project. After 6 months of back and forth and contract was finally signed. In your agreement, you included a deposit or retainer in order to start the work. One month later, upon receipt of that deposit — $25000, you can know say that it took 7 months from lead generation to revenue. In this instance, your payback period is 7 months.

You can average out this number across all marketing initiatives or specific to category, in this case events.

Other ways you might want to explore this number would be by typology of projects. Some typologies have a shorter payback period due to smaller periods of negotiation or discovery.

Hypothetical Example

Seeing as we walked through some amazing concepts, we'd figure we could walk you through a hypothetical example of how you could look at the relationship between revenue, marketing, and costs.

Let's walk through an example that looks at the potential revenue and then breaks down the costs of a couple of marketing initiatives to understand the effectiveness of different channels. The payback analysis then looks at the duration of your return on investment, basically how long did it take for you to recoup your initial investment for marketing.

Note: Projects are acquired and start at the same time. Client quality is not a factor but could be part of a risk calculation.

Assumptions  
Number of Potential Residential Clients: 5
Average Total Revenue per Client: $50,000
Average Monthly Cash Flow: $20,833
Length of Projects (months): 12
Average Monthly Margin % = 20% ($4,166.66)
Average Lifetime Value per Client: $75,000

Marketing Costs per Channel  
Trade show: $15,000 (2 Clients @ $7,500 CAC - 15% of Revenue )
Facebook Ads: $3,000 (3 Clients @ $1,000 CAC - 2% of Revenue)
Average Blended CAC per client: $3,600

Payback Analysis  
Blended Payback Period through Profit Margin: 4.32 Months
Payback Period per Facebook Client: 0.24 Months
Payback Period per Trade show Client: 1.8 Months

Note: This does not factor how you've structured payments in your contract (ex. 25% of flat fee upfront) or if there are late payments

Depending on your total cash reserves, the risk factor of each project, the quality of the client, and the confidence level of a larger LTV, this scenario could be worth the expense.

What is clear from this example is that the Facebook Ad strategy should be continued and refined to lower the CAC even further.

Conclusion

In conclusion, we've covered 11 modern marketing concepts that are applicable for Architecture firms. We strongly believe marketing organizations can benefit from being much more data driven about the outcomes of their work in order to be fully aligned with the service journey of their prospective clients. If you have any questions about these concepts feel free to reach out to george@monograph.io — happy to continue the conversation!

ABOUT THE AUTHOR

George Valdes is part of the Growth team at Monograph. He deeply enjoys solving complex problems in the built environment and in the AEC industry and is particularly interested in helping architecture firms take control of their marketing. George earned his Bachelor's of Landscape Architecture at Florida International University and his Master's of Architecture from Columbia University.

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