Where and How Do You Sell in a Down Economy? - Part 1

  

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How tight markets can be good for those who are savvy in services

It’s no secret that the US economy has been stumbling along for most of the past three years. The road to recovery has been bumpy at best. However, if you can clear away the fog of bad news you will discover sectors of the economy that are actually performing quite well.

Since much of the growth in the security industry is tied to new construction, the current situation represents a distinct challenge. According to statistics from the US Census Bureau (see first chart below) construction spending today is roughly equal to the levels we observed in the year 2000. We ascended the mountain of growth from 2003 to 2008 only to now have been hurled back onto the valley floor.
 

So where do you look for new business when there are few contruction cranes in the air?

For Integrators looking to sustain or increase relative growth rates (which I hope is everyone) this represents a large obstacle that requires real thought to overcome.   One way to sustain growth in this low construction environment is to focus on those industries that are in fact growing. Yes, some industries are actually still growing.   To find them let’s look at two indicators of potential opportunity.
 

Construction & employment as indicators of potential opportunity

Organizations that are building new facilities or moving into new office space in completed facilities are usually growing and probably have new needs for physical security. According to the US Department of Commerce, overall construction in the first half of 2011 was 5.4% below the same period in 2010.  So, we’re not off to a good start.  However, if we peel back the data and check individual industry sectors we see a slightly more attractive environment. Take a look at the data below which was extracted from the June 2011 Department of Commerce report on construction.

You can see here that some traditional hot targets for security spending like Public Education and Manufacturing are showing rapidly slowing construction rates in the first half of 2011. Meanwhile, Commercial, Healthcare, and Utilities are all generating substantial new construction projects.  If you haven’t changed your vertical marketing focus from three or four years ago, you may be targeting markets that represent very thin opportunities.

One great resource to slice through this data is the USA Today's money page where you can sort the data by industry, state and even by major metro area.  This is a good place to start if you are interested in understanding your local market conditions a bit better.

But new construction is not the only measure of growth or indicator of potential opportunity.  Many organizations have plenty of space and don’t need to make large investments in new construction.

In part two of this blog I’ll take a look at another potential indicator of opportunity, namely, the growth in employment.

- John Szczygiel