Every fall, construction companies across the country sit down to plan for the year ahead. They review last year’s revenue, debate which markets to grow, and set targets for the year ahead. They do this with conviction—and, far too often, without evidence. The markets they choose tend to be the ones they’ve always been in, the ones a senior leader is excited about, or the ones that look attractive from the outside. The value proposition they bring to those markets tends to sound like everyone else’s: experienced team, client-focused, committed to quality. And then they wonder why their hit rate is stuck. Here’s the uncomfortable truth: most A/E/C companies don’t have a market strategy. They have a revenue target and a list of markets they hope will get them there. The difference matters more than most leaders realize.

The Planning Error Hidden in Plain Sight

When I work with companies on strategic planning, I often ask a simple question early in the process: “Why do clients choose you over a competitor?” The answers are almost always some variation of the same theme: relationships, reliability, technical expertise, or responsive communication. Those things may be true. But they’re not differentiating. Every competitor in the room would say the same thing—and probably does, on their website, in their SOQs, and in their interviews. When every company sounds the same, clients default to price, incumbent relationships, or whoever happens to be in front of them at the right moment. The root cause isn’t a messaging problem. It’s a research problem. Companies skip the work of understanding what drives client decisions in each market, what gaps competitors leave open, and where their own capabilities create genuine, defensible value. Without that foundation, any “strategy” is just aspiration dressed up as a plan.

Research Is Where Your Value Proposition Actually Lives

A useful framework for this discovery work is the 5C Analysis: Climate, Customers, Competitors, Collaborators, and Company. Each C surfaces a different layer of your competitive landscape—and together, they reveal where your company’s capabilities intersect with real market opportunity.

• Climate examines the market dynamics you’re operating in: funding trends, regulatory shifts, economic headwinds, and the forces shaping client spending decisions. 
• Customers asks who your buyers are, what problems keep them up at night, and how they make selection decisions—criteria that are often very different from what companies assume. 
• Competitors maps the competitive intensity in a given segment, where others are strong, and, critically, where the gaps are. 
• Collaborators identifies the teaming partners, associations, and ecosystem relationships that extend your reach.
• Company is an honest assessment of your brand, relationships, bench strength, and delivery track record in that specific market.

The magic happens at the intersection of all five. Where the client's need is acute, competitive positioning is weak, and your company has real capability, that’s where your value proposition has teeth. That’s where you can say something specific and credible that a competitor cannot. Your value proposition isn’t something you write in a planning session. It’s something you discover through research—and then align to where real opportunity exists.

Consider what happened when one Mid-Atlantic contractor finally did the work. The company had spent years pursuing healthcare work alongside a half-dozen larger competitors, only to lose at roughly the same rate as everyone else. When their BD team finally sat down to interview decision-makers at two regional hospital systems, the feedback was consistent: what those clients wanted most was a contractor who understood phased construction in occupied facilities well enough to function as a planning partner, not just a builder. The company had done exactly that kind of work — they’d just never named it, proven it, or led with it. Neither had their competitors. Within 18 months of repositioning around that specific capability, with documented outcomes, client references, and a pursuit team trained to have that conversation, their healthcare hit rate climbed from 28% to over 50%.

Two Levels of Value Proposition—and Why Both Matter

Before connecting your value proposition to your market strategy, it’s worth distinguishing between the two levels at which it operates. At the company level, your value proposition answers a broad question: why does your company exist, and what does it stand for? This is your identity—the through-line that connects everything you do. It’s durable, relatively stable, and should be true across most of the work you pursue. At the market segment level, your value proposition gets specific. It answers a narrower question: why should a K-12 school district, or a healthcare system, or a water utility choose your company over the alternatives in that segment? You must ground the value proposition in what you know about that client type’s decision criteria, the competitive landscape in that segment, and the proof you can muster to back up your claims.

The two levels nest together. Your company-level value proposition sets the character and credibility of your brand. Your segment-level value proposition translates that into client-relevant language with specific evidence. When they’re aligned, your BD team has something meaningful to say in every conversation. When they’re disconnected, or when only the company-level version exists, sellers default to the generic strengths that make clients’ eyes glaze over. If your company says the same thing to a hospital client as it does to a developer client, you don’t have a value proposition. You have a tagline.

Where to Play: Making Deliberate Choices

Once you’ve done the research, market selection becomes a different exercise entirely. Instead of starting with “which markets do we want?” you’re asking “where does our value proposition have the greatest leverage?” A practical way to structure this is through a Core / Target / Emerging tiering framework. Core markets are where you have deep relationships, a proven delivery record, and a reputation that makes both repeat and new business easier to win. They should account for roughly 60% of your revenue, backlog, and pipeline, and maybe even warrant dedicated market leadership and maximum investment. Target markets are where you’re building position—investing in relationships before opportunities appear, with the goal of converting them to Core over time. They represent roughly 25% of your focus. Emerging markets are speculative: you pursue them opportunistically rather than systematically, but they should never fill more than 15% of your backlog.

The discipline here is in the allocation. Most companies spread their BD investment too thin: a little attention everywhere, concentrated strength nowhere. The companies that win consistently are the ones willing to say, “we are not going to chase that,” because they’ve made an honest assessment of where their value proposition gives them a real advantage and where it doesn’t. The pattern holds in reverse, too. One contractor with a strong identity in commercial office construction — ground-up and tenant-improvement work for institutional clients who valued schedule certainty and a sophisticated preconstruction process — discovered during annual planning that nearly 20% of its recent revenue had come from light industrial and warehouse projects. The company had won most of it opportunistically, through subcontractor referrals and competitive bids. The margins were thin, the client relationships weren’t sticky, and the work required a different subcontractor base than their core portfolio. The decision to formally stop chasing that segment and redirect BD investment toward a healthcare target they’d been circling for two years felt risky at the time. Twelve months later, their overall hit rate had improved, and their average project margin was up four points. Saying no to the work that didn’t fit had made room to win more of the work that did.

How to Win: Aligning Value Proposition to Market Strategy

Choosing where to play is the strategic decision. Knowing how to win in those markets is the execution question, and it depends entirely on whether you’ve built your value proposition for those clients. A market strategy that aligns with your value proposition has six elements working together. The first three define where and with whom you compete: priority segments and services (where you create outsized value), an Ideal Client Profile (who you serve best and why), and a plan for where to show up (both in-person and through marketing and thought leadership). The second three shape how you compete and what you select: a teaming and ecosystem map (who amplifies your reach), opportunity filters (how you define “good fit” in advance, before you’re emotionally invested in a pursuit), and win themes backed by proof (specific, differentiated messages tied to client decision criteria). Notice that this list starts with segments and clients, not with your capabilities. That ordering is intentional. A value proposition that starts with “here’s what we’re good at” is looking inward. A market strategy that starts with “here’s what this client type cares about, and here’s where we uniquely solve it” is looking outward. The 5C research is what makes that outward orientation possible.

One way to pressure-test whether your 5C research has produced a real value proposition is to draft a positioning statement using this formula:

• For [client type], [firm name] is the only [type of contractor] that delivers [specific benefit], because only [firm name] can [evidence or proof point]. If you can’t complete it without resorting to vague language, your research is incomplete. The formula itself is simple; the hard work is gathering what goes inside it.

Companies with hit rates well above the industry average of 37–44% tend to do this upstream positioning work long before an RFP drops. By the time a pursuit begins, they’ve already built the relationships, shaped the client’s thinking, and established the credibility that makes their proposal feel like a natural conclusion rather than a cold pitch.

Where Annual Planning Should Actually Start

Annual planning is the right moment to do this work—not as a one-time exercise, but as a discipline your company repeats every year as markets shift and your capabilities evolve. Before you set growth targets, ask three questions:

• In which of our markets does our 5C research show the strongest alignment between client need, competitive gap, and our capabilities?
• Do we have a segment-level value proposition for each of our Core and Target markets—one that’s specific, differentiated, and backed by evidence?
• Have we concentrated our BD investments—time, relationships, marketing spend—in the markets where we have that advantage, or have we spread ourselves too thin?

If you can’t answer those questions confidently, you don’t yet have a market strategy. You have a plan to stay busy. And in a competitive environment where companies that do this work are increasingly pulling away from those that don’t, staying busy isn’t enough.

The companies that win consistently aren’t the most talented or the most aggressive. They’re the most intentional. They’ve done the research to know where they win. They’ve built a value proposition that means something specific to specific clients. And they’ve aligned their market strategy to that advantage with enough discipline to say no to everything that falls outside it. That’s not luck. That’s a system. And annual planning is the right moment to build it.

A 5C Market Research Framework is included on the following pages to help you put these concepts into practice.

 
5C Market Research Framework

A companion tool to “You Can’t Win Where You Haven’t Decided to Play”

Complete one worksheet per market segment you are evaluating. This is research work, not a planning room exercise—answers should come from client interviews, win/loss data, subcontractor feedback, and competitive observation, not internal assumptions. Plan to revisit and update annually.

• Market Segment / Geography: _______________________________________________
• Date Completed: _______________   
• Completed by: _______________   
• Next Review: _______________

PART 1: 5C RESEARCH

Climate: Market Dynamics

• What is driving demand in this segment right now, and what forces could shift it?
• What are the primary funding sources (public, private, institutional) and how stable are they?
• What regulatory, economic, or technology trends are reshaping this segment?
• Is the total addressable market growing, stable, or contracting? Over what timeframe?

Customers: Who Buys and Why
Answers should come from actual client conversations, not assumptions. If you haven’t interviewed clients in this segment recently, that is the first step.

• Who are the actual decision-makers and influencers in the selection process (titles, roles, internal dynamics)?
• What are the top three criteria clients in this segment use to select a contractor? (Rank them.)
• What is the biggest problem or risk clients in this segment are trying to solve or avoid?
• Based on past wins and losses, which client types are the best fit for your firm’s capabilities and culture?

Competitors: The Competitive Landscape
Focus on the gaps competitors leave open, not just where they are strong.

• Who are your top 3–5 competitors in this segment? What is each known for?
• Where are competitors consistently weak or absent? What client needs go underserved?
• What do you know about your win/loss record against specific competitors in this segment?

Collaborators: Your Ecosystem
Collaborators extend your reach and credibility. A strong ecosystem is often a competitive advantage in itself.

• Which design firms, engineers, or owner’s reps are most active in this segment and where do you have relationships?
• What industry associations, owner groups, or affinity networks are most relevant to this client type?
• Are there subcontractors or specialty trades whose relationships give you a meaningful advantage in this segment?

Company: An Honest Self-Assessment
Be rigorous here. Optimistic self-assessments produce strategies that don’t hold up in the market.

• What is our reputation and brand recognition in this segment specifically (not the firm overall)?
• What project types, delivery methods, or client challenges are we genuinely best at? What is our proof?
• What capability gaps or relationship weaknesses would we need to address to be truly competitive here?

PART 2: SYNTHESIS

Answer these after completing all five sections above. This is where your value proposition emerges.

• Where does an acute client need, a competitive gap, and a genuine company capability all intersect?
• Based on this research, should this segment be classified as Core, Target, or Emerging? Why?
• What is the single most important BD action to take in this segment in the next 90 days?

PART 3: VALUE PROPOSITION

Use your research to complete the formula below. Every blank should be filled with something specific and evidence-backed. If you find yourself writing something vague, return to your 5C notes—the answer is in the research.

• For [client type / segment], [firm name] is the only [type of contractor] that delivers [specific benefit], because only [firm name] can [evidence or proof point].
• Our draft positioning statement for this segment:______________________________________________________________________________________________________________________________________________________________

Test: Could a competitor say this exact statement about their firm? If yes, keep working. The goal is a statement only you can make.

Our Expert

Julie Witecki

Principal, FMI Consulting

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Julie Witecki, a Principal with FMI Consulting, helps A/E/C firms bring strategy to life. With over 25 years of experience in marketing and business development, she believes that strategy only becomes powerful when it’s actionable - activated through the systems, tools, and people who engage the market every day. At FMI, Julie works with clients to ground their strategic decisions in research, then align marketing and BD efforts to turn those decisions into measurable impact. Her approach ensures that strategy isn’t just smart - it’s real, relevant, and results-driven. Based in Denver, Julie has a coast-to-coast view of the A/E/C industry. Julie serves on the AGC Business Development committee. She is active in the Colorado chapter of SMPS and is a Certified Professional Services Marketer. She has also achieved the APMP Bid & Proposal Foundation-level Certification and the CU Boulder Leeds School of Business Customer Experience Certification. Julie has an MBA from Regis University and a BA from the University of Colorado at Boulder.

This article was developed by industry professionals on the AGC Business Development Committee who are focused on best practices in strategic growth, client engagement, and construction marketing. It reflects a collaborative process incorporating AI-supported research, editing, and peer review.