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Low Bid Is Not Enough


Ever been low bid and didn’t get awarded the job? Follow these tips to win more profitable work.

Bidding on lots of jobs is not enough to guarantee a steady flow of profitable work in today’s competitive construction marketplace. Successful general contractors, subcontractors, and suppliers have learned that their bid is only one of the many required steps in the sales cycle.

A successful commercial general contractor might bid several jobs every month. For each project, they can expect to receive about 100 subcontractor bids for the 30 sub-trades usually required. On average, less than five percent of these subcontractors ever call back to present their bid, review their proposal, discuss their bid, or even to meet with the general contractor for any reason. When you don’t hear back from your valued subcontractors, do you assume they don’t have more to offer except price?

Do you sell more than price?

Most contractors and subcontractors are proud of their quality work, reputation, and personal service. Today’s financial demands, project complexities, and tight schedules require project owners to often look for more than just low bids that provide the minimum. However, if they aren’t made aware of the added value contractors can offer, the buyer has no choice but to evaluate, select, and award contracts based on price.

There are ten things that successful contractors, subcontractors, and suppliers do to get more than their share of the available profitable work. See how your company compares to this list of winning tips:

1. Written marketing and sales plan – Companies that plan their future, create their future. Sit down and write your sales and marketing plan. Include sales and profit goals, customer targets, market areas, project types and sizes, and action steps to make it happen.

2. Marketing budget – Companies who invest in their future make more money than those who don’t. Create an image, logo, and marketing materials to build an impression of who you are, what you stand for, and what you specialize in. Invest at least $10,000 to $20,000 per year, in addition to the cost for sales people or estimators, on marketing, mailings, flyers, customer events, meals, ballgames, golfing, thank-you gifts, and cards to send out to customers. Any marketing is better than no marketing. But be consistent and diligent.

3. Customer relationship follow-up program – Identify your top 20 customers and spend time with them at least every two months in a relationship- building setting like meals, association meetings, golfing, charity events, or at professional ballgames. Make sure you stay in touch with customers who make you the most money. Go and see them at least four times per year.

4. Targeted marketing mailing program – Keep a database of your loyal, repeat, potential customers, and referring parties. Use a simple software program like ‘ACT’ to keep track. Mail something to your entire list every two to three months to keep your name in front of them, peak their interest, and to tell them what you can do for them. Keep the mailings simple. Send out photos, articles, postcards, flyers, new product updates, news updates, or fun things to make them smile.

5. Expertise, specialty, or niche – Successful companies are known for being the best at something. Some are known for project types, or difficult jobs, or fast track, or design-build, or technical expertise. To be perceived as the best contractor choice, your customer must know what you specialize in or your area of expertise. If you market your company as a ‘jack of all trades’ who builds any type of project for any type of customer, you will not be perceived as an expert in any project type. Let them know what you are good at and then tell them again and again and again.

6. Sales and presentation skills – To win great jobs takes professionalism, knowledge, and confidence. Firms who are awarded more jobs than their competitors are well trained in sales and presentation skills. They show up at the project interview ready to impress, with their team rehearsed, dressed like pros, and ready to ask for the order. They use photos, charts, CPM schedules, graphs, power-point presentations, customer testimonials, value-added propositions, cost-saving ideas, and lots of visual props to get their point across.

7. Right place at the right time – Estimators are more than price givers. They are in the sales business and must spend lots of time with their customers. To be at the right place at the right time, you must be in your customer’s office at least once a week. Successful estimators create a relationship of trust with customers by spending time working with them on value engineering ideas, solutions to difficult problems, and seeking better ways to build. Are you a price giver or a problem solver? Customers want to hire people who solve problems for them and make their lives easier and stress-free.

8. Referral solicitation program – The easiest way to double your sales is to ask loyal customers for a referral. Referrals don’t come without asking, but when asked, customers will give them. A simple checklist is all it takes to remind you to ask. Call your last ten customers and take them to lunch to thank them for the work. Then, at the end of lunch, ask them for a referral. You can be guaranteed that you will get all the work you can handle if you spend more time in sales than you do worrying about ordering door knobs and scheduling your crews.

9. Active in industry and community – Successful companies are seen by everyone, everywhere, all the time. They are active in their industry associations, local charities, and community organizations. They serve on boards of directors and give time and money to make things better for the people around them.

10. Cutting edge – Leading companies use the latest tools, techniques, and technology to stay ahead of and lead their customers. They show the future to their customers instead of complaining about changing. What are you waiting for? What are your competitors doing that you should be doing? What can you be the first to use? The longer you wait, the further behind you get.

If you want to increase your chances of winning more than your share of profitable jobs, consider implementing these ten tips. Make your bid only one small part of the selling process and join the list of very successful companies.

Business - Commercial Construction Industry

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.