Sure, competitive pricing matters, but over-reliance on being the lowest bidder is a tactic that leaves a lot to chance–and ultimately a lot of potential wins and profits on the table. It’s a good idea to strategically consider your sales and marketing processes. Read on for pointers from pros.
Positioned for Growth: Sales Process
At Well Built Construction Consulting, Chad Prinkey reminds us that there are steps we can take, besides focusing on bidding low, to position the business for winning more and better projects:
How does your construction business win work today? If you’re like the hundreds of typical contractors, you’re probably getting on bid lists, bidding work, following up (maybe!) and being awarded projects as the “lowest qualified bidder.” It works, right?Your ability to secure competitive pricing from vendors and subs, and your confidence in operations to efficiently run work absolutely matters. As a growing company, you’re never going to win work consistently if hiring your firm is cost prohibitive. I’ll shoot you straight, though: If your sales approach boils down to “be the lowest qualified bidder,” you might as well add “fingers crossed” as an official step in your sales process. The low bidder won’t always win the day, and if you’re only winning when you’re low, you are leaving a ton of business and profit on the table.
Like other aspects of running a construction business, a consistent, documented and methodical approach is vital to attracting and winning new projects. In other words, use your understanding of the market you are competing in to develop and follow an intentional sales process. According to Prinkey, a solid sales process should arm you to:
- Quickly evaluate and separate the wheat from the chaff. You probably don’t have unlimited sales and estimating resources to effectively chase every project so focus on the ones that fit your business and have a high potential of converting to a sale.
- Create interactive conversations with your buyers. In most cases, humans are making buying decisions, and without talking to them you’re just another number.
- Gather essential information about the project, buyers and competitors. A little key information goes a long way to help your team highlight key differentiators beyond price in your proposal.
- …Close the deal. You need an opportunity to present your unique approach to the project and your team’s ability to deliver optimal results. You should also plan to field questions from the customer to put their mind at ease. Without this opportunity, your bid is all the information available to your buyer to make a decision.
At Built to Build, Shawn Van Dyke reminds us that it is also essential to know how many projects, at what scale, you need to sustain and grow your business. He suggests backing out from your Profit and Loss Statement to reverse engineer a marketing plan, noting: “Your income, your cost of goods sold, your expenses, and your net profit – those items are your business. The P&L tells the story of your business…. The P&L shows how your business operates, but your business starts with sales. So all the income that comes into your business is sales. That’s where your business starts.” Knowing how many leads you need to generate the prospects that ultimately become customers will enable you to develop a more strategic marketing plan in support of your sales goals. Finally, as Michael Monahan reminds us, we must always be marketing: “Relying on marketing only when you need new business is not an efficient or effective strategy. When you market your company well, everything becomes easier, including learning about bid opportunities, winning business, attracting and retaining talent, and connecting with investors.”
Poised For Growth?
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