Masonry Magazine July 2012 Page. 38
BUSINESS BUILDING
By George Hedley
Winning Against Low-Priced Competition
Every construction company wants a simple solution to charge higher prices and win more work than the competition. But why should customers award your company contracts, unless you are the low bidder? Bid lists have grown, and many of your competitors are pricing jobs lower than their costs to keep their doors open and crews busy. Therefore, customers are taking risks and using the lowest bidder to save lots of money.
Finally, you are realizing business is not what it was, and it will take three to five years for the economy to come back. Only a few years ago, you could get lots of work just by bidding your customer's steady stream of work. But today, this sales strategy is dead. Now, it takes more than producing quality work and bidding projects per plans and specifications to stay busy. You must do more and offer something different than your competitors to win profitable contracts. You need to change, improve and upgrade your estimating systems, bidding strategies, proposal format, presentation methods, customer contacts, marketing plan and sales tactics to be successful.
Be low bid or get in the sales business
In public works construction, the low bidder usually gets awarded the job, and there is little or no room to gain an advantage except price. This requires the lowest possible costs, the most efficient construction management and field operation possible; and lean, productive, well-trained field crews without downtime, job problems, quality issues, conflicts or mistakes. Your subcontractors and suppliers also must be supervised and managed tightly without gaps in scheduling, productivity, conflicts or quality.
In private work and in public work, where performance is a part of the award-consideration process, it takes a lot more than turning in a bid to win contracts. You have to give customers a differentiating reason to hire your company. It's not just about price, inclusions and exclusions. Too many competitors exist who can do the same job as your company and will cut their bid to the bone to get a job. Therefore, you now have to be in both the construction and sales business. Estimating and bidding used to be the only sales tactic you needed to win jobs. Sales involve more than pricing jobs and delivering bids. It is about giving your customer what he specifically wants on each job you're bidding.
What differentiates your company?
Imagine you are driving down the freeway and need to fill up your gas tank. Do you look for the best quality, service or price? Usually, you look for the closest gas station, since they're all basically the same. In the construction business, it also doesn't matter which contractor or subcontractor customers use. In the customer's mind, most contractors are all relatively equal and do an adequate job performing the work required. And most proposals look alike by only offering the minimum required per plans and specifications.
Can customers really tell the difference between your company's bid proposal and your competitors? If all else is equal, the only differentiating factor It's about giving your customer what he specifically wants on each job you're bidding. between your company and the competition is price. What do you do to stand out from the crowd and set your company apart? Do you offer any of these differentiating factors?
* Doing more than required for the same price
* Offering completion, service and quality guarantees
* Being the specialist, expert or most knowledgeable contractor
* Professionally presenting your company
* Using cutting-edge technology
* Being well financed and bondable
* Having well-trained foreman and crews
* Having large crews available to man the job
* Finishing jobs faster than competitors
* Meeting project goals and deadlines
* Offering value-added engineering ideas
* Having a trusted customer relationship
* Giving customers what they want
Give customers a reason to hire you
A great way to win contracts is to have trusted relationships with customers by spending lots of time together eating, fishing, golfing or other activities
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