When you’re applying the same business practices day in and day out, there’s not much room for change. Real change often takes a different approach.
For example, when it comes to improving estimating and sales performance, I’d bet that many of your competitors chase low-priced work that’s available to almost any bidder. While this low-bid strategy is one way to go, there are other ways to secure better prospects.
Public works are open to anyone. Even most private work is open to any contractor or subcontractor who shows interest and requests to be on unlimited bid lists. While bidding a high volume of projects is not necessarily a problem, the goal should be winning high-margin work. And winning better contracts takes more than simply estimating, bidding and waiting for results.
To succeed, you have to set yourself apart from the competition. Most companies want to deliver quality and service over price, but they still don’t offer anything different from their competitors. When preparing a proposal, estimate or bid, most companies never consider including more than the minimum required.
There is a significant percentage of construction project owners who will pay slightly more for quality instead of focusing only the lowest bidders on projects. This “do more, earn more” mindset can drive more than just profits; it can boost your reputation as a contractor who outshines the competition.
However, if you simply submit your bid and hope for a contract award, customers will not be aware of any added value, service or quality you offer. Therefore, the buyer has no choice but to evaluate and select based solely on price. To sell quality and service over price, you must determine what your customer wants on every project you bid on, and deliver exactly that.
Focus on the important issues that make a difference — try asking about the client’s needs before you bid, and then address it in full detail in your proposal.
The following outlines six different ways to step outside of your routine and aim to exceed customer satisfaction by offering more than just low prices.
1. Build Trust
Most customers are really purchasing — and buying into — their perception of your value, and level of trustworthiness, and whether they might actually enjoy the experience of doing business with you. If your company is perceived as a professional company which provides exceptional quality and on-time work, you can easily get onto lots of bid lists.
Construction is really about the people business. Companies that realize they’re selling trusted relationships more than bricks and mortar, have higher bid-hit-win ratios and make more money than their competitors. At first, the purpose of your bid or proposal is to get in front of new and repeat customers.
Then, as you deliver excellent work, you begin to build trust and get to know them personally. Come up with a plan to regularly invite them to breakfast, lunch, industry meetings or ballgames.
The only way to create trusted, deep and loyal relationships is to spend face-to-face time with customers in a fun or relaxed atmosphere.
Building trust with clients requires frequency and quality time, just as it does with your friends and family.
2. Be the Preferred Provider
Leading companies are known for being the best at delivering their respective end products. Some are well known for project types, specialty niches, difficult jobs, fast-tracked schedules, design-build work or quality workmanship. People will pay more for the best.
And to be the best, your customer must know your company’s services and specialties. Why is Nordstrom known for customer service? They tell their customers about it all the time.
When you’re known as the best at your specialties within your market, your company will get the first chance to propose, and the last chance to match the price needed. Experts land great jobs at their set price. Generalists get the leftovers when their price is the cheapest.
3. Bid What You Want to Build
Before you sell quality over price, determine which type of work your company should do, and for which type of customers.
At Hedley Construction, we determined our best customers were developers who needed full-service construction and development project management, from initial concept and feasibility to working drawings and permits to construction and completion. These customers need what we offer, and don’t mind paying for it. Eliminate target customers who just want a low bid and don’t give you credit for extra quality and professional service.
4. Offer More
We bid and price out several jobs every month. For each project, we receive about 100 subcontractor bids for the 30 sub-trades required. On average, less than 10% of these bidders actually call to present their bid, review their proposal or even to meet for any reason.
Every project has different needs. Sometimes, price is the only differentiating factor — but how will you know what really matters to your customer without asking before you bid? On most projects, price is not the only determining factor.
Subcontractor selection is weighed heavily based on specific factors, such as schedule, quality, safety, professionalism and technical skills. Always try to deliver your bid in person, and present it in a convincing way so your customer will see and believe your company has the solutions to their problems.
5. Follow up & Set a Meeting
Someone in your company must be in the sales business and spend lots of time with customers. Be in the right place at the right time by being in your customer’s office (or home) every week during the bidding process.
This will show them you want the job more than your competitor does. Stop by for a visit, ask questions, offer ideas on how to improve their project, provide alternative suggestions, and look for ways to help your customer at every turn.
After the bid presentation, follow up aggressively and in person. Estimating and preparing the bid is only half the work — you must do more than just email your bid and hope. Remember that bids don’t sell; people do.
6. Ask Questions
Most estimates, bids and presentations are submitted without the presenter ever asking for the contract. Before you agree to invest time into bidding a project, get in the habit of asking tough questions about the most important selection criteria and who else is bidding.
And after reviewing your bid with the customer, make sure to ask, “What will it take to award us the contract right now?”