In last week's article I presented four trends that are impacting the way contractors sell. They were:
1. Greater use of “team” decision-making.
2. Greater avoidance of any unnecessary risk.
3. Greater demand for some form of tailored work.
4. Greater increase in using a “3rd Party” expert.
Depending on the size of the construction company, the Consultant Salesperson could be the owner, business development manager, or an estimator. No matter who it is, the person responsible for bringing sales to the company must overcome the impact of the trends.
While most contractors have faced each of the four trends in varying degrees for years, the impact made by customers’ buying habits today are drawing more from these four trends than in past years.
An interesting side note to this issue involves the residential market. It too has begun to align with the four trends. Days of going out and closing the deal on a concrete patio on the first visit, much less building a new house for a customer, are fading away. Often, the homeowner has a relative or friend who is an “expert” on concrete patios and wants their input before making a final decision. Yikes!
In our first article we also shared the traits of the Consultant Salesman. Selling amidst the four trends noted earlier requires an approach that might be slightly different. The following traits presented for your review, represent what might be necessary to overcome any interference that such trends could pose to a contractor.
Traits of a Consultant Salesperson
- Really understands the customer’s business model
- Seeks “intel” about the customer’s business or industry…that the customer might not know about their own company or industry
- Challenges customers with new ideas, insights, solutions etc.
- Not afraid to take on 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 the competitors
- Prepares estimate that is tailored to customer needs and that addresses specific requests for “customization”
- Will create Estimate A & B, when needed, to empower the customer to make final decision…sooner!
We addressed the first two traits in our previous article. We will now look at the third and fourth traits, unlocking yet more insights for you to integrate into your selling.
Trait #3 - Challenges customers with new ideas, insights, solutions etc.
The Consultant Salesperson does not shy away from bringing new ideas or insights on how to complete a project in the best manner possible. The “challenges” effort does not address customers in a demeaning or negative manner but rather impresses upon the customer that there might be more options available than he thought -- or than what others have told him. It’s listening to the customer share his opinions and then providing information that might counter what the customer thinks or has been told. Remember, you’re the expert for your specialty area!
To challenge with new ideas, insights and solutions suggests that a contractor must be about the business of digging deeper for what is new in the industry. Most contractors I’ve known and worked with through the years are some of the brightest tacticians around, often providing a greater solution for a customer. Yet many of these same contractors have limited even greater results because they were always late in learning of some new development in technique, engineering, materials etc. that would have set them apart from competitors who also did not do their homework.
With “updates and upgrades” making themselves known almost weekly, it really does pay a contractor to keep one eye on any “new” sciences impacting equipment, materials and construction techniques. Such monitoring can reward the contractor with providing fresh information to customers, separating their company from other contractors.
Remember, to “challenge” the customer suggests challenging his viewpoint on a particular area of his construction need. He might have been given information from a knowledgeable source or he could have relied on his brother-in-law who had a similar project completed. You need to listen to his information, perhaps even questioning his source before politely and positively addressing your knowledge, research and proposed solution.
The reason it’s so important to practice this trait is that a growing trend among customers is their reliance on more input from others. While the residentially focused contractor might have to compete with the opinions or experiences of “Uncle Buck,” the commercial contractor might very well run into the owner who has retained the services of a legitimate “industry expert.” Don’t be fooled, old “Uncle Buck” might yield more influence than a hired expert.
One brief example sheds some light on this trait. A contractor I recently visited was working with a developer of a condominium complex. The contractor was hired to put in curb and gutters and install the parking lots and streets throughout the campus. He also was to place the concrete blocks for the walls of a few small holding ponds.
When the concrete contractor realized the lay of the land and the direction that the water was going to naturally take (and thanks to the excavator who further influenced the flow who improved this mistake) he saw an immediate problem and opportunity: the run-off into the ponds would not be maximized. In other words, the ponds were a bit off line to where the flow of the water would naturally run. When he brought this to the attention of the developer, a bit of a disagreement was voiced by the excavating contractor.
After hearing the site contractor defend his worker’s efforts, the developer brought in a civil engineer to take another read of the land. Sure enough, the site work was off just enough to potentially divert run-off to other undesirable locations rather than to the ponds. The appropriate corrections were made (at the excavator’s expense) and the project moved ahead.
My contractor friend had maintained his composure, especially when the site guy was arguing with a lot of gusto. His challenge about direction, run-offs, etc. had paid off and prevented even greater problems for the developer when it eventually would rain. While my contractor was not a “site guy,” he did his own amount of research to back up what his sixth sense prompted him to consider.
Trait #4 - Not afraid to take on money discussions head-on; confident to sell “Cadillac versus Yugo”
Let me begin this discussion by focusing on the latter phrase for this fourth trait. If a contractor needs to be clear about anything, he needs to clearly understand what he is selling. Every contractor thinks that he is selling high premium quality. Unfortunately he might not be selling at the higher price that matches what he thinks his company delivers.
Over the years I have found that those contractors who bid low to get work, and get it quickly, are probably selling at a lower margin than others. Look, we want to win work but at some point you have to determine whether you will be a low bidder or higher-end bidder. While it’s not always this easy, contractors must determine where they will fall in the money area or risk being all over the map when it comes to bids.
I define “Cadillac” as high-quality, premium attention, and clean site operations. In short, the performance efforts and results are nothing short of first class! This effort should result in a higher-priced product.
Now, selling “Cadillac” requires the Consultant Salesperson to present a case that is simply better than others. The Consultant Salesperson listens to the customer’s issues, researches the deeper issues that can support his selling effort, and presents a solution that is truly unique from the competitors. The catch here is that if the Consultant Salesperson DOES NOT complete this effort then his product and services, no matter how good his crews really are, will be seen in the same company of providers as the poorest-performing contractors around.
Such a negative result pushes the “Cadillac” contractor into the same commodity group as the “Yugo” from the customer’s perspective. If you want to charge more you must do a few things confidently:
- Don’t “cave in” when the customer first objects to your prices.
- Up-talk your own services, superiority of crews, superior solution, supporting researched facts etc. – as opposed to “down-talking” your competition.
- When the customer asks, “Why is your competitor 20% lower than your price?” don’t get defensive, simply reply, “That’s interesting, Mr. Customer. Why do you think they’re 20% cheaper than my price?”
- When you have presented you’re A+ effort on selling the best solutions, and presented your pricing, “shut up” and allow the silence to move the customer to talk first.
- Remember, your presentation to your superiority should include the homework you did and presented that reflects your greater understanding about the customer’s company, industry and needs on the job that you cannot only satisfy but satisfy at a higher level that your competitors cannot match.
Let’s go back and consider the third point just presented. The response is not meant just to be cute. In fact, it is intended to throw back on the customer doubts about why the competition is charging so little. Trust me, often the customer will suddenly have some of the following thoughts run through their brain:
- “Why are they cheaper?”
- “Will they use less material or inferior material or components?”
- “What are they holding back from me that this contractor is providing?”
- “Well, the lower priced contractor really didn’t tell me anything new.”
- “You do get what you pay for.”
- “I do want a first class effort and result; can the lower bid really provide that?”
The Consultant Salesperson holds his ground, confidently, especially when money is beginning to be discussed. Another thought here as to why you need to be confident when it comes to money discussions.
When you have shot your price to your customer, perhaps even realizing that you will not be the lowest bidder at the table, dropping your pricing too quickly can send mixed signals. It’s almost as if the customer is thinking, “Hey, wait a minute. If you are dropping your price that fast, what else are not going to stand behind.”
While negotiation is part of most construction selling experiences, timing is everything! The Consultant Salesperson plays a good “hand of poker” and doesn’t fold too quickly. But before you start planning a little “chicken” with your customers, be confident in what you are going to bid in the first place. Don’t put a bid out there if you are really having second thoughts about it. You’re bound to look worse when you cave on the price than had you lowered your price to begin with and stuck to your guns.
There is nothing routine about selling construction services today. If you believe even half of the “four trends” shared this week and last, and I believe all four are relevant, there is much we can do as contractors to put on our consulting hat and strengthen our entire selling process.
Seek new insights, ideas, techniques etc. and present your estimates with confidence. Stand strong behind a job well prepared and convey that confidence to your customers and you’ll increase your “hit ratio” of won projects!
© 2013 Brad Humphrey, Pinnacle Development Group/The Contractor’s Best Friend™