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Sell More than Low Price

05/15/24

Have you ever been the low bid on a construction project and didn’t get the job? It doesn’t seem fair. Why did it happen? What can you do to avoid this happening again in the future? Bidding more on more jobs won’t guarantee a steady flow of profitable work in today’s tough, competitive economy. Successful contractors and subcontractors have learned that bidding is only one step in the sales cycle. Pro-active customer relationships and an organized and consistently steady marketing and sales program is 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 make sure you’re getting what you want. They spend at least five to ten percent of their sales volume to ensure they are keeping a continuous flow of orders coming their way from you.

Look at your company’s financial dedication to sales, marketing, and taking care of customers. When the business was booming, all you had to do was bid enough jobs. That doesn’t cut it today. Now it takes a commitment to business development and a thorough understanding of what your customers want on every job. This program costs more money to implement. But, without spending money to make money, you’ll have nothing to offer except lower prices to win less contracts with.

Most general contractors bid several construction jobs every month. For every job they bid, they usually receive about 100 subcontractor bids for the 30 sub-trades involved. Most subcontractors rarely even call to discuss the project requirements prior to bidding. And then they never ask to meet with the decision maker to present their bids. How can only turning in prices give you a competitive advantage and improve your bid odds? When general contractors don’t hear from subcontractors before, during, and after the bid date, they can only assume they’re too busy to help or don’t have anything valuable to offer except their price. Don’t you think meeting with customers will make a difference? Face-to- face sales give you an opportunity to negotiate, build relationships, develop trust, and increase the inclination to work together.

Do you sell more than price

Customers demand and expect more than a cheap price today. 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 can offer, he or she can only evaluate your proposal based on price. Your written bid looks very unconvincing stacked up against five or ten 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, faster, easier, or safer?

Take a look at what the top 10 percent best-in-class and profitable construction companies use to sell more than low price:

  1. Written marketing and sales BIZ-Development plan
  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 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 referral networking system in place
  8. Key managers who are very active in their industry and community
  9. Never bidding on a job without meeting the decision maker first
  10. Always asking what’s the most important factor in awarding a job

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 all year. Take your customers to lunch or a ball game. Send them something that shows how you helped another customer finish their 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’ll begin to see better bottom-line and top-line results.

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.