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Masons: Use Your Bid as Bait
By George Hedley
I have been hearing these same complaints about the construction business since 1977, when I started my general contracting company. It seems as if nothing changes as contractors continue to compete against low-price competitors.
Bid like you fish
Before you go fishing, you need the right bait to lure the fish to bite. Think of your bid as tasty bait customers will want to bite, so you can land a juicy contract. When you fish, your goal is to catch either the big one or lots of fish. So you look for the secret fishing holes where they bite.
When looking for profitable projects to bid to, you must seek opportunities that will give you the best chance to make the most money. When you finally catch a fish, you can reel it in, weigh it, and decide if you want to keep it. After you submit a bid and get the call to cut your bid or match a better price to get the job, it is your choice to accept that offer as well.
When you go fishing and they aren’t biting, what do you do? You try different fishing techniques, change your bait, or move on to another fishing hole. But stubborn contractors don’t look elsewhere when they don’t land enough contracts. Most contractors just keep bidding to the same customers over and over, using the same bait and proposal strategies as they’ve always used.
Contractors often think if they bid enough the same way, eventually they’ll get their share. This effort won’t get you the positive results you want. Like fishing, you must change your estimating and bidding strategies to get the big ones to bite more often.
Bid-hit ratio is the rate at which you successfully bid or propose on projects. For example, a 5-to-1 bid-hit ratio states for every five jobs you bid or propose on, you are awarded only one. In a survey I conducted of more than 2,000 construction general contractors, subcontractors and design-build companies, less than 10 percent know and track their bid-hit ratios.
Do you know what yours is? In order to determine how many jobs to bid, what type of jobs to go after, and which customers give you a higher percentage of their work, you must know your bid-hit ratio for these different categories. Track it by types of projects, customers, job type, job size, and project location. As you study your bid-hit ratio trends, you'll find certain customers give you more work than others, and you'll find you do better with certain kinds of jobs.
Customers may value these things more than price:
Ability and experience: understanding the plans and specifications, reputation for excessive change orders, in-house design and value engineering, and experience in similar projects
Customer service: trust with a delicate customer, service department, flexibility and response time
Solid workforce: properly trained professional field crews, foremen who can make decisions, large-enough crews, ability to make the schedule, and quality workmanship
Image: great safety record, maintain clean jobsite, jobsite image and uniforms
Financial security: financial strength and bonding capacity, payment schedule and need for cash.
Use your bid as bait!
Remember your bid is bait to go fishing for a contract. The main purpose for your bid is act as bait to get a meeting with your customer. At this meeting, you can discuss the project in depth, review how you can help your customer meet goals, explain why you are the best choice, review pricing options, get a second chance to be the selected contractor, and get last look.
|Last Updated on Sunday, 23 June 2013 20:03|