December 2010: Business Building

Words: George Hedley

altBusiness Building

Sell More Than Price

Have you ever been low bidder and not gotten the job? It doesn’t seem right. How did it happen? What can you do to avoid that in the future? Follow these proven suggestions to win more profitable work.

Bidding more and more jobs will not guarantee a steady flow of profitable work in today’s tough, competitive economy. Successful building contractors and subcontractors have learned that bidding is only one step in the sales cycle. Pro-active customer relationships and an organized and consistent pro-active marketing and sales program are required now, more than ever. Look at your suppliers. They know how to market. They have dedicated, full-time sales people assigned to your account. These sales people call on you on a regular basis, take you to lunch, and assure you are getting what you want. They spend at least 5 percent to 10 percent of their sales volume to insure they keep a continuous flow of orders coming their way. Look at your financial dedication to sales, marketing and taking care of your customers. When the business was plentiful, all you had to do was bid enough jobs. That doesn’t cut it today. Now, it takes a commitment to sales and marketing, and a thorough understanding of what your customer wants on every job. That costs more money. But without spending money to make money, you will have nothing to offer except lower and lower prices. At my commercial construction company, we bid several construction jobs every month. For every job we bid, we usually receive about 100 subcontractor bids for the 30 sub-trades involved. What amazes me is that subcontractors rarely ever call to discuss the project requirements prior to bidding, and never ask to meet with us to present or review their bids. I know their experience can help us win the work and improve their odds when they offer us advice and ideas. When we don’t hear from our subcontractors, we can only assume they are too busy to help and don’t have anything valuable to offer, except a low price. Or they don’t think meeting with us will make a difference. They are wrong. Face-to-face sales builds relationships, trust and a desire to work together. Do you sell more than price? Customers demand and expect more than a cheap price today. And, most contractors and subcontractors are proud of their quality work, reputation, expertise and customer service. But, if your potential customer isn’t aware of the added value you offer, he can only evaluate your bid based on low price. Your written bid looks very unconvincing when stacked up against five or 10 other bidders. The only differentiating factors are the prices, inclusions and exclusions. Is that the only factor you want your company to be judged on? Don’t you think you could do better if you had a strong enough relationship to get a meeting with your potential customers and discuss how you can make the job go better or faster? As a construction industry speaker, I see thousands of different construction companies in all parts of the country. Take a look at what construction companies in the top 10 percent of profitability use to sell more than price:
  1. Written marketing and sales plans
  2. Marketing budgets from $10,000 minimum to $40,000 or higher ??
  3. Pro-active customer relationship follow-up programs
  4. Consistent monthly mailings to their target markets
  5. Constant customer reminders of project niche expertise and specialties
  6. Sales training for all estimators, project managers and sales people
  7. A systematic referral networking system in place
  8. Key managers are very active in their industry and community
  9. They never bid a job without meeting the decision maker first
  10. They always ask what the most important factor in awarding the job is.
If you want to sell more than price and improve your profit margins, you’ve got to offer more than a low price on a piece of paper. You must do something to convince customers your company is the best choice. This must be done with a pro-active, systematic approach to selling that goes on year-round. Take your customers to lunch or a ball game. Send them something that shows how you helped another customer finish a project faster. Ask them how you can help them make more money. Send them a handwritten note thanking them for the contract or the opportunity to bid their work. When you make your bid only one small part of your complete selling process, you will begin to see real bottom- and top-line results. ??
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