Leaders in the construction markets nurture relationships with and seek the support of contractors to install their products. This is a given. However, with the advent of new technologies, changing regulations, streamlined purchasing systems, and volatile economic conditions, the contractor’s role is changing as other influencers and decision makers’ roles evolve. Consulting engineers, in particular, now play an important, if extended, role in all primary construction markets (commercial, industrial, municipal and even some residential), especially when projects are large or complex.

How much do consulting engineers matter? Consider that in the last 15 years, contracting and construction materials and systems supply companies have grown at or about the pace of the development (loosely aligned with GDP) in a given region, whereas design consultants, including architects and engineers (A&Es) grew 8 times faster. Even with the bubble(s) popping during the last 10 months, A&Es have outperformed all of their job-site peers by a factor of five, measured in revenue per employee over the last decade. Today, design is the highest value element of a construction event, at least as indicated by revenue trends.

This results in significant pressure on suppliers who need consultants to favor their products when specifications are created.

Most companies who depend on inclusion in a design specification do not have the information necessary to exploit opportunities nor minimize risks as consulting engineer power grows and changes. It is important to recognize that consulting engineers do not just influence new construction sales; they also influence overall business success and product strength and operational strategy on many dimensions:

• Near and Long Term Revenues: If the installed base secures the lucrative aftermarket, then it is safe to conclude that the work done by consulting engineers to select or influence systems, products and brands up front has a direct and significant impact on a supplier’s overall sales and profitability, and on the health of its channel.

• Price, Sales Pace, and Cost of Sales: Most makers of construction or building systems are not highly differentiated from competitive offers. With trends towards specifications that call for performance characteristics rather than prescription of a single brand and with more incomplete specifications for more common items, a supplier is often just one on a list of equals named by the consulting engineer is lost in the bidding process. These shifts often ebb and flow, like a tide, and a supplier must have accurate, clear information, and indicators to be positioned well with precisely aligned resources in any cycle.

• Focus and breadth: In the past, consulting engineers focused on one discipline. Today, consolidation among consulting engineers is resulting in more work being done by a smaller number of larger, cross-discipline engineering firms. These Goliaths are among the market’s top performers (see figure 1). In 2006, a record 40% of all design work in North America was done by 1% of the firms. For the supplier, this dynamic may hold the key to adding value by either focusing on a technology or by bundling offers, but only if 1.) consulting engineers receive coordinated, careful attention and 2.) the relationship can show that the innovation or the bundle value is greater than the alternative.

Figure 1 – Construction Project Lifecycle Zoom Image

• Coverage and Scale: Historically, systems and material supplier sale efforts have been organized by region -- by who a company can reach effectively and conveniently.  However, the practice of consulting is borderless, especially as firms get larger and as information technologies like BIM take hold. Traditionally, supplier sales teams have been more likely to be able to engage the entire construction process when the consulting firm is small and local. When a bigger firm is awarded the design contract, (often for larger jobs), many suppliers have trouble coordinating resources towards sales success. At the same time, consulting engineers are not the only decision maker or influencer during critical project lifecycle stages. In effect, they are surrogates who represent the interests of owners, and help shape the work done by general contractors and their  electrical/mechanical subs. For this reason, the construction and operation is best viewed on a lifecycle (see figure 2).

Figure 2 – A&E Firm Performance Analysis Zoom Image

And lifecycle matters. For some elements of a building, campus or community, operating costs will far outweigh upfront costs. Of all of the trends seen with A&E firms, the most important may be that they are becoming the go-to source for estimating and ensuring the economic value proposition of any system or material.

To best understand consulting engineer influence and create effective strategies and programs to grow the business through increased loyalty, a supplier must know:

• Who holds what level of decision making or influencing power by project size and market?  And how is this changing and wh

• What similar drivers or operating conditions do groups of consulting engineers share and that can used to more effectively segment the industry? Once the segments are know

• What marketing and commercial programs, products and services are necessary to create competitive advantage and grow influence? How can they be sustained?

So even while consultant engineers don’t buy, as the chief surrogates of owners for a time, they are a critical cog in the construction and ownership cycle, and any supplier’s marketing strategy must be as fully-formed to add value for them, as it must be for paying customers. The strategy, however, should be as agile as the consultant can be -- able to go and work anywhere that there might be demand.