Can Architects Beat The Builders?
Architects design around 5% of new homes built each year in Australia, and a lot of us would like that to change because we see too much of this.
To improve our market share, and to protect the built environment, we would have to take business away from the home builders.
Before I talk about how we can do it (without lowering our fees), let’s talk about:
…why business as usual won’t work.
Doing nothing and repeating what we’ve always done doesn’t work because the architecture industry is facing big headwinds — that are neither short-term or cyclical.
In the homebuilding market, builder-designed and architect-designed houses are substitute goods for one another. This means a consumer can easily switch.
As housing and inner-city land prices increase relative to incomes, consumers will increasingly substitute architects for builders, and cities for sprawl — as Australians replace more expensive choices with less costly ones.
Architects are lucky that we don’t have to price-match the homebuilders because there’s a durable cultural perception that architect-designed homes provide more utility, quality and sophistication (and we couldn’t, if we tried). But, unless the trend reverses and incomes increase relative to the cost of housing, we will continue to lose customers to cheaper alternatives.
On the one hand, this makes housing cheaper overall (which is something we like), but on the other, it gives the public less choice about how they live, and a lower quality built environment (which is bad).
It also means that in the long-run, our industry is facing death by a thousand cuts.
Why wasn’t this an issue fifty years ago?
Architecture boomed because of a thing called the income effect. As people’s disposable income rose, and the relative cost of construction decreased (basically, both things happened in the mid 20th century) they bought more luxury services like architecture.
Inferior goods like spec-homes are less desirable during periods like this.
But, 2018 isn’t one of these times. Disposable income is shrinking, housing costs are rising, and households are overleveraged.
What the remedy for this problem?
Teach people about architecture.
The sensible response from the industry is to look for ways to “educate the public on the value of Architects through marketing and public outreach”.
That’s way better the lobbying government for regulation, because asking those in power to grant architects a more powerful monopoly position would be asking them to increase the cost of housing by force — political suicide.
Grassroots education is awesome because it‘s the best solution to architecture’s biggest problem: people thinking about building a home find it difficult to tell whether architecture, the higher-priced option, is in fact any better.
They don’t know the precise differences between two different houses, one by a builder, and the other by an architect — and they don’t know what the fair price for any of them is.
Even though I have loads of stuff to share on this subject, because it’s literally my job, I won’t touch on the ways architects can engage the public in this article.
Instead, we’ll talk about what architects should say to the public once they have their attention — because the right answer isn’t obvious.
Architecture is like hairdressing, restaurants and sneaker stores.
As an architectural marketer, I have to be very cautious not to compare architecture to other types of products or markets.
I get it, it’s a sensitive subject. Architecture is special.
But one area that it’s similar is the market structure (guys, please let me have this one, just once).
Like most consumer-facing markets, home-building is a “monopolistic competition” where we all offer something different, with elements of uniqueness, but we’re all essentially competing for the same customers.
A pizza restaurant and a mexican restaurant are both competing for diners. Nike and Adidas are competing for feet.
The central feature of these markets is that products are similar, but slightly differentiated, so each firm or category can build it’s own little monopoly on the thing it does.
In architecture, we currently differentiate in three ways.
Each way has it’s own strengths and weaknesses, as far as the likelihood of successfully building our advocacy efforts around it.
In the crudest sense, architect-designed houses use size, design, colour, shape, performance and features to stand out from each other, and builder-designed homes.
Unfortunately, what makes architecture physically distinguished is very, very easy to copy.
While short-term innovations by individual firms do increase demand, and profits, they’re quickly returned to normal by imitation.
Each spike in demand improves the prestige value of architecture overall, but it fades.
Architecture’s advocates need to be cautious about any decision to focus on physical differences. That includes sustainability, durability and liveability — which are often incorrectly put in their own special category away from style.
This doesn’t just apply to the way houses look, but how we describe the benefits and features of our work.
Here’s what the Institute has to say on their “what an architect does’ page.
Here is some copy from Metricon.
Our homes cover all budgets and all styles of living, but they’re all linked by a common theme: bright, light-filled spaces, great, practical liveability, and stylish contemporary appeal.
We design homes that are adaptable, flexible and work with your lifestyle. Homes that truly answer the needs of the modern family.
This copy wouldn’t raise an eyebrow if you saw it on an architect’s about page.
The “architect-designed homes look better, feel better, perform better” thing isn’t going to work — because it’s totally contestable to the untrained eye.
We can’t win this fight by talking about buildings, or showing them.
A quick note on architectural communication
A big problem with the architecture industry is that the only publicly-digestible content that any firm puts out is photos, which only differentiate the product in physical terms.
I can’t stress enough how important it is for architects to embrace storytelling: words, video and sound to distinguish themselves. Contact Vanity Projects if you want to know how to get started.
This is the registered architect part. Architects can differentiate themselves through the skills of their employees, and the level of training they have received.
Unlike physical characteristics, an architect’s monopoly on their level of skill and training is rock-solid.
Warwick Mihaly gave a great analogy for this type of differentiation.
Have you ever heard of a cheaper version of a lawyer? Of course not.
Even though lawyers are disrupted all the time because lots of other people can do elements of their job cheaper — they’re still lawyers.
Likewise, plenty of people can mimic what we do, but they can’t take what we are, and what we know — in short, they can’t easily replicate the design process that we’ve developed over centuries that sits at the core of our business model.
Sell the process! Sell the process!! Sell the process!!!
The architect’s business moat that protects them from competition isn’t built around specifying the coolest taps (6 months earlier than they appear on the shelves at Bunnings), or creating lifestyles, or eco-friendly homes .
The big home-builders achilles heal is that they say things like “it’s all about you” — but clearly, it isn’t, and we can nail them on that.
Individual firms benefit from telling human stories too
As service providers, communicating your unique process will also help you to differentiate yourself from other architects, who don’t usually show any aspect of themselves other than their project photos to the world.
If you can frame the uniqueness of your process as an outcome of being an architect, you’ll be doing your bit for the team-brand at the same time.
Over time, architects have learned to differentiate themselves by marketing to a small, urban, design-conscious segment of the market— rather than the entire market of people needing homes.
This strategy works well for individual firms, where successful marketing and branding decisions are highly rewarded, and you need a niche.
But, as an industry, it’s driving irrelevance and marginalisation — as we teach swathes of Australians that they aren’t part of our market.
At the same time, home-builders have widened their net to encompass anyone and everyone with generic platitudes.
The architecture industry as a whole will struggle to improve it’s market share by communicating anything that remotely resembles “X type of person uses an architect” — or casting aspersions about the political or cultural values of the architecture profession. It just plays to the builder’s advantage.
I want to repeat this point, because it’s so important. Having strong political, social and cultural views makes an individual firm stronger, but makes the industry less competitive — if your goal is to see more architect-designed homes in your neighbourhood.
So what does the right advocacy framework look like?
As you can see in the chart above, there is a conflict of interest between what’s good for individual firms, and what’s good for the industry as a whole, in two of the three categories.
As we compete with other architects by advertising the physical differences of our projects, neglecting our qualifications/process, and targeting our branding at tiny niche’s — we’re doing the exact opposite of what the industry needs to grow it’s market share.
I left the architecture industry to learn marketing and start Vanity Projects because I was deeply troubled by how little of what I learnt about architects, and what they do, the impact they have on the world, and how they think, exists in the public realm.
I didn’t survive as an architect because I didn’t care enough about buildings, the physical product.
But, that rare point of view, being obsessed with architects and caring little about architecture has given me a better understanding of what the general public is missing out on from our profession.
Insights into the architectural design process.
While relevance will continue to persist as a central theme and intractable dilemma of every future architecture conference and working group, I hope that this article gives a direction for anyone looking to contribute their time to this problem.
Further reading: Could Architects Make More Money?
Looking for specific marketing advice for your firm? Book a coaching session with me by visiting this link.