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“Brad, I have done a lot of work for this guy in the past. You can’t imagine how I felt when I saw one of my competitors doing work at his site. I just don’t get it, I thought he liked me.”
How many times have I heard this from contractors through the years?
“But Brad, I thought they liked me!”
Huh! Welcome to the 21st Century Customer…they’re not loyal! And friendships, while not insignificant, are not the main driver a customer considers when deciding to have construction work performed.
In general, contractors have experienced an interesting shift over the past few years in how customers are making purchasing decisions. As customers spend more money or require more complicated solutions, they are also processing their buying decisions different than in past years. Consider four huge trends.
1. Greater use of “team” decision-making.
Also is known as “consensus decision-making,” one thing is clearly at play today: more customers are utilizing more internal people to finalize a decision. Whether it’s a residential owner who must confirm with a spouse or get some advice from a friend or a relative, or whether it’s a commercial customer who now must present their “three bids” to a committee, more decisions involve some combination of team effort.
2. Greater avoidance of any unnecessary risk.
The increase in “risk aversion” is just too easy to see in today’s market. Customers want as little risk exposure as possible and will, in some cases, threaten to sue a contractor for the slightest error in construction. Customers are more demanding that the contractor assume all of the personal risk and liability for work performed to release the customers from any responsibility.
3. Greater demand for some form of tailored work.
Whether you are a contractor who works residential, commercial, industrial, or government projects, you have probably experienced a greater demand by customers for something “special” in what you do for them. This “customization” might be physical, cosmetic, financial, or even process oriented, related to how you schedule your work. Many contractors admit that their customers simply want to feel like they are getting “more for their money” than just what the basics might provide. “Give me something that other customers do not have,” might be a generic request made more today than in past years.
4. Increase in using a “3rd Party” expert.
Certainly the larger-sized projects are contracting with some form of an “Owner’s Representative.” In many cases this 3rd Party, who is retained formally and financially, might have some recognized specialty that would benefit the owner. In a smaller-sized project this “Owner’s Rep” might be a friend or relative who just experienced a similar type of construction -- so obviously that now qualifies him as a “Construction Expert.” This 3rd Party is both trying and tiring and it is a trend that seems to be creeping into the lives of many contractors.
Now, the Consultant Salesperson is the contractor or estimator who must overcome such trends. At the heart of selling, the new breed of salespeople work to establish a good relationship with customers while also realizing that the relationship is no guarantee that they will be the only preferred contractor.
Let me share a few observations about the “new breed” of salesperson, the Consultant Salesperson. Check off those traits that are being exercised by those responsible for getting work in your company.
Traits of a Consultant Salesperson
- Really understands the customer’s business model
- Seeks “intel” about the customer’s business or industry… especially intel that the customer might not know about their own company or industry
- Challenges customers with new ideas, insights, solutions etc.
- Not afraid to confront money discussions head-on; confident to sell “Cadillac versus Yugo”
- Studies tactics and strategies of competitors and “predicts” for the customer what they’ll hear from competitors
- Prepares estimate that is tailored to customer needs and that addresses specific requests for “customization”
- Will create Estimates A & B, when needed, to empower the customer to make final decision…sooner!
Additionally, the Consultant Salesperson builds a few more efforts into their process, including:
- Always “Asks” for the business
- Professionally requests reasons when a “No” is presented by customer
- Follows up with customers and adds new info to customer profile
- Regularly asks customers for additional references for new work
In light of the four trends presented earlier, let’s begin examining the traits for the Consultant Salesperson. We’ll entertain the first two traits in this article and continue with the remaining traits next week.
Trait #1. Really understands the customer’s business model
One clear difference in selling today versus just a few years ago is the need for construction sales efforts to better understand what makes a customer’s “engine run.” This is best discovered through identifying the business model on which customers base their growth. This trait is as critical to the smaller specialty contractor as it is to the large general contractor
A customer’s business model simply represents how the customer intends to grow his organization. Does he want to be “#1” in his marketplace? How big does he want to grow…and by what year? Is reputation and professionalism of prime importance? Is customer satisfaction a foundational core value?
Believe it or not, knowing the answers to these simple questions, and others that might not be so simple, should impact how you prepare to communicate your company, solutions, work processes etc. Understanding a customer’s model will empower you to emphasize particular aspects of your estimate, services, attention to detail etc. – whatever best fits that business model. This effort on your part will strengthen the customer’s thought process of your similar commitment to what is important to him and his success.
One quick satisfying-the-customer example. Most organizations have some formal statement of this “value” and have designed efforts to make sure that they are satisfying the customer. Therefore, if customer service is a “core value” for a customer that you are trying to win business with, then it might be prudent to emphasize how effective your crew’s efforts are to satisfying your customers.
Trait #2 - Seeks out “intel” about the customer’s business or industry…especially intel the customer might not know about his own company or industry
Our second trait requires a bit more study and research, and must be included in 21st Century selling. Trait #2 might be the one trait that truly works to separate you from your competition. You might not be surprised to learn how many people, charged with making construction decisions for their company, are not necessarily up-to-date on developments in their own industry.
Many of the people contractors work for are busy and have their eyes, ears and noses down “in the weeds.” Often, they might not even find the time to read about new developments in their own industry or trends that are beginning to be observed in other areas of the country or world. Let me share a brief story with you that I think illustrates this second trait.
This past year a contractor asked me if I could assist his organization in pulling together a presentation they were invited to make to a small financial institution that had multiple locations. A committee for this group was charged with interviewing five contractors, awarding the winner a contract to remodel 15 small branch locations.
I asked the contractor to pull together his team and to present to me what they normally present. They made what I would call a traditional presentation, including the traditional bullet points presented by most contractors. The points included:
- Who we are and how long have we been in business
- Who our “project leaders” are and their years of experience
- How many similar remodels we have done in the past
- Why we’re the best contractor for quality, customer satisfaction etc.
- Three references of past customers who think we’re the “cat’s meow”
I think you can see where they were coming from – and why I “cut to the bone” pretty fast. I informed the team that they were not going to do “that” presentation, and I asked them, “How many times was the customer’s committee going to hear the same thing from the four other contractors who were also presenting?”
We determined to put all the responses to the five statements listed above into a spiral bound handout, which would be given to the committee members at the end of the 50-minute presentation.
“So what are we going to do Brad?”
Here’s what the contractor’s team did do:
- We did some research on the financial industry and found that, like other industries, most are looking for ways to downsize.
- Research found that financial companies are looking to reduce their number of locations and/or shrinking the square feet of space used.
- Research also found that the use of kiosks was growing and more customers were doing more electronic “banking.”
- The contractor studied the customer’s locations and actually found several that were larger than might be needed. They then proposed their “shrinkage” idea and suggested turning the extra space into rentable space for other businesses, thus enabling the customer to make money on existing property without damaging each site’s ongoing business.
The contractor presented this new “intel” to the customer’s committee (interestingly, one of the committee members didn’t believe the trends research and researched himself).
The day after all five contractors presented to the committee, the president of this small customer called my contractor friend to award him and his company the job. Funny, the president shared with the contractor,
“You were the only contractor that knew more about our future than we did. No other contractor even mentioned the trends you presented.”
Now, perhaps this contractor would have won the job anyway, but I think you see the “differentiation” that was made by the effort made. So take a new look at how you sell your construction services. Be committed to learn more about the industry of the customers whose work you are trying to win.
For the specialty contractor, learning more about what general contractors are facing with their customers can lead to a better way to win work with GCs. If your customer is a property owner then you need to become more acquainted with what property owners are dealing with in their industry. If your customer is a homeowner, what trends might be impacting the housing industry and market?
The impact made by these first two traits alone is enough to stimulate more work for your construction company. Don’t be caught in the trap of just going through the motions of getting bids out without recognizing what your customers are also going through.
Take the extra time and turn some evening TV watching into some “googling” on your computer for information that can help you become more knowledgeable about the market you serve and how this “intel” can separate you from your competitors.
Come on…research a little!
© 2013 Brad Humphrey, Pinnacle Development Group/The Contractor’s Best Friend™