What business activity makes the most money for your company? I bet you didn't say: "Sales!" To most contractors, their total sales effort requires no more than picking up a set of plans from a customer, estimating the job, turning in a bid and then waiting for the results. They rely heavily on price to sell most jobs. As the economy has gotten worse, and work is harder and harder to get, many company owners have thought about how to increase their sales. Some have even decided to hire a salesperson to increase company revenue. But then what? These frustrated owners don't know how to manage a salesperson to get the results they need or want.
Construction Sales Is Easy
It's a numbers game. When competent salespeople make regular sales calls on good prospects who need what you offer, your company will get its share of the business. When you don't make the calls, you won't get the business. It's like professional hockey-the team that takes the most shots usually wins the game. The more sales calls, the more business.
Most business owners don't like to make sales calls, so they try to encourage their estimator to make them. But, most estimators are not built to sell. They are built to analyze a set of plans, use calculators and computers and put a price on a specified amount of work. Like business owners, estimators also don't like to get out of their comfort zone, go out and make sales calls and spend a majority of their time selling. So, in tight markets, small business owners often want to hire salespeople to solve their lack of revenue problem.
Why do Construction Companies Struggle?
A major reason small- to medium-size companies struggle is a lack of a systemized, focused sales and marketing plan. They mainly rely on reputation to earn the right to be awarded enough work to make a reasonable profit. This works in good times, but not during a slower economy. Successful companies must have written sales systems and marketing plans that help salespeople proactively and aggressively look for new customers, targets and contracts.
I've noticed a common thread among the successful subcontractors our general contracting company use. They have a plan to find and attract new customers and follow it diligently. Every week, they come by our office as a part of their sales route to meet with our project managers and build relationships with our employees. They are always in the selling mode and ready when we have an opportunity for them. The majority of subcontractors wait until we call them, but the successful contractors are already there waiting for an opportunity to attack.
A proactive sales plan starts with a business owner or general sales manager who will hold his or her salespeople to a required standard of performance excellence. These required standards can include the number of calls per day, number of customer lunches per week, number of face-to-face meetings per week, number of proposals and total proposal volume per month. To know how you're doing, you must keep score.
Keeping score with salespeople is often difficult because they typically don't want to be tied down to a set number of required calls. They like to let their instincts take them through the day. They don't like to be held accountable to a minimum standard, and they don't like to track numbers. They also usually don't like to write, don't like discipline and don't want to follow a written plan. They generally feel their gift of gab will get them through and reap enough results. But without numbers to hit, most salespeople will fail and not meet your expectations.
Sales information to track:
- The type of customers you want
- The markets you want to attack
- The project locations you like
- The project sizes you want
- The minimum fee per job
- Sales calls per day
- Leads from
