Editor's Note: This is the tenth in our 2010 series, "Win in 2010."
Native American tribes appointed rainmakers who used their powers to create rain when the crops needed water, sustaining the crops and nourishing the people. In order to obtain more sales, successful construction companies should have someone responsible to "make it rain" money.
Most construction businesses have fixed indirect overhead expenses that do not vary much as their sales go up or down. With a relatively fixed cost of doing business, the best way to make more profit is to generate more revenue.
In your construction business, you need someone responsible to bring in enough money from customers and clients to keep your people fed and the machine working. With this in mind, the only thing that really matters is to find and keep customers at a profit. Without customers, there is no business.
Many construction companies grew over the boom years by doing good work and relying on their reputation to generate repeat customers and referrals. A systematic marketing program and sales system were not necessary to generate enough revenue to keep everyone busy. Today, without a dedicated and effective ongoing marketing and sales plan, companies can not generate enough revenue to keep the doors open.
Why Should Customers Do Business With Your Construction Company?
Selling starts with understanding what your potential customers want to buy and why they should do business with you. You must be able to answer these questions with such clarity that your customers will almost taste the benefits of what you have to offer and the differentiating factors that set your company apart. Start by making a list of benefits you provide for your customers and reasons they should buy only from you: This list includes ways you solve customers' problems, make them more money, save them money, help them do more with less, achieve what they want faster than ever before, reduce their stress or make them feel good about doing business with your company.
To help you finalize your list of customer benefits, put yourself in their shoes. What would convince you to buy only from your company? Remember, customers do not really care about how long you have been in business. They don't necessarily consider the depth of your experience or the extent of your personal service, your commitment to quality, your safety record, or what tools and equipment you own. In truth, they care only about what they want and how you will provide effective and efficient solutions to solve their problems.
Get a Sales Appointment
As you start to implement a proactive sales program, it will be next to impossible to get a sales appointment with potential customers unless you can convince them you are different than your competitors, you have solutions to their problems and you care about their success. Your first task will be to entice customers to invite you to meet with them on their terms. This starts by asking the right questions about what your customers want, listening to their answers and then responding with ways you can help them get what they want. If a potential customer does not think you can help them solve his or her problem at the right price, you will not be able to get the sales appointment you want.
Only Sell to the Best Customers
Selling is like fishing. In order to be successful catching fish, it takes a fishing pole, tackle, lures, bait, line, a boat, and most importantly: fish that will bite what you offer them. To improve your results, it is best to fish where there are lots of fish. To get an even bigger return on your time fishing, find bigger fish. Most importantly, offer them the bait that they love to eat!
The best salespeople fish for profitable customers with tasty bait, using the best strategies, in places where there are lots of customers who want to buy what you offer at the price you want to sell your products and services. For example, if you are a contractor looking to sell potential customers the same type of work as your competitors offer, you will have difficulty getting them to bite without lowering your price. If you are a subcontractor offering carpentry, drywall, or concrete work to general contractors in a down market, they have lots of options and you have lots of competitors. It is hard to make a sale when there are too many fishermen trying to nab the same small fish with the same proposal offering a fixed price for a specified scope of work.
To get customers to bite, you must look for customers who need what you offer. Determine if what you offer targets customers' needs. For example, hospitals want contractors who are trained, safe, clean, technical and will work 24 hours. Though hospitals are hard to win over initially, once inside their walls, they will use your company for services over a long time.
Another example is targeting the United States Army Corp of Engineers. Their construction procurement program is based on qualifications, experience, track record and lastly, price. It takes a lot of effort to get hired on your first construction project for them, but once qualified with an excellent performance record, you will be placed at the top of the selection list for future projects. Most contractors focus on offering the lowest price, building fast and building only what is in the contract. If you offer this to the Army Corp, you won't last long in their system. It takes more effort, management and money to be a contractor for them than most are willing to invest.
Remodeling expensive homes also takes more effort. These customers are used to a great deal of personal service, cutting-edge systems, daily communication, follow-up, hand-holding, and professionalism from top to bottom within your organization. The effort is intense and expensive to perform, but worth it. Once you become a preferred provider in exclusive neighborhoods, customers will flock to use your company for their construction needs without caring about the price.
The types of customers who are demanding require more time and service. They also require a more sophisticated selling system and process to get them to buy from your company. In addition, bigger customers who are more sophisticated and professional are harder to sell. But over time they will be worth the effort as they will buy more of your services than small one-time customers.
Seven Steps to Greater Sales for Your Construction Company
1. Find Potential Customer Targets and Leads
Start your sales process by identifying past, repeat and potential customers. Review your contracts over the past three to five years and create a database of customers who have a potential to be long-time repeat customers. Next, spend several days searching for potential customers who are viable candidates. Compile your list on a database tracking software system like ACT so you can sort them by needs, potential, project type and location.
2. Implement a Consistent Marketing Plan
The key to any sales plan is to do it consistently over a long period of time. A one-time brochure, e-mail, phone call or mailing will not penetrate potential customers. Determine how you will proactively attack your customer target list over the next two to three years. I recommend contacting customers at least every quarter to gain recognition.
3. Set a Meeting
In order to make a sale and get a signed contract, you will have to get in front of your customer. To set a meeting, start with a consistent mailing program to familiarize customers with your company and what it has to offer. Customize letters explaining why they should do business with you and how you will make them money and save them time or hassles. Promise a follow-up call and deliver on your promise. If your offer is enticing enough, customers will take your call and want to meet with you. Call them and suggest a short 10- to 20-minute meeting to discuss what they need and how you can solve their problems.
4. Get the Facts
Consider your first meeting as a fact-finding session where you are there simply to ask questions, listen and look for ways to solve their problems. At this meeting, qualify their potential for a long-time relationship. Also, find out how they do business, how they award contracts and what they like and dislike from a supplier. After the meeting, always send a handwritten thank-you note. Then, reflect and determine if they are a good prospect for your future.
5. Present Winning Proposals
After your first meeting, you must create a proposal that will entice customers to buy from your company. Use lots of visuals and photographs of people solving problems for their customers. Offer to take them out to a jobsite or completed project to see your work and talk to one of your other customers. In your written proposal, convince them why they should buy only from you. Be sure to entice them to want to buy, offer solutions to their problems, overcome their fears and concerns, overcome price objections, tell them how you will reduce their risk and ask for the order in a compelling manner.
6. Follow up Aggressively
After the proposal, you must follow up at least every other day to show you are interested in working with them and helping them make more money. If the customer doesn't return your calls, leave messages with additional ideas about how your company can perform better or save him or her money. Don't give up. You worked hard to get this far, so take it to the finish line. Send postcards, handwritten notes, photos or anything during this phase to keep your company at the top of the customer's mind.
7. Create Loyal Customers
Getting a signed contract is only the first step in your long-term relationship with customers. Stay in touch with them often during the project to ask how it is going and how you can do more or better than expected. After the contract is completed, send them a thank-you card and gift as a token of your appreciation. The sales work continues as you work hard to stay close and build on the initial relationship. Take customers out to lunch, a ballgame, fishing or golfing at least every quarter to reinforce the relationship. This will increase your chances of turning repeat customers into loyal customers who will use your company for all of their needs.
Construction Business Owner, October 2010