Low Bid Is Not Enough

10 tips to win bids and gain more profitable construction projects.

Bidding lots of jobs is not enough to guarantee a steady flow of profitable work in today's competitive marketplace. Successful general contractors and subcontractors have learned their bid is only one step in the sales cycle.

As a general contractor, we bid several jobs every month. For each project, we receive about 100 subcontractor bids for the 30 sub-trades usually required. On average, less than 15% of these bidders ever call us to present their bid, review their proposal, discuss their bid or even to meet with us for any reason. When we don't hear from our valued subcontractors, we assume they don't have more to offer except their price. And when they finally do call, they only ask: “How do I look?"

Do you sell more than price?

Most contractors and subcontractors are proud of their quality work, reputation and personal service. And today's financial demands, project complexities and tight schedules require project owners to often look for more than low bid. But, if they aren't aware of the added value a contractor offers, the buyer has no choice but to evaluate and select based on price.

As a construction business speaker, I see thousands of different construction companies in all parts of the country every year. I recognize 10 things successful contractors and subcontractors do to get more than their share of the profitable work. See how your company compares to this list.

  1. Written marketing & sales plan. Companies that plan their futures create their futures. Sit down and write your sales and marketing plan including sales and profit goals, customer targets, market areas, and project types and sizes. Then record the action steps necessary to make it happen.
  2. Marketing budget 2 to 4 percent of volume. Companies who invest in their futures 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 per year on marketing, mailings, flyers, customer events, meals, ballgames, golfing, thank-you gifts and cards to send out to customers.
  3. Customer relationship follow-up program - Identify your top 20 customers and spend time with them at least every 2 months in a relationship building settings like meals or events.
  4. Target marketing mailing program. Keep a database of your loyal, repeat and potential customers and your referring parties. Use a simple software program like Sage ACT customer tracking software. Mail something every 2 to 3 months to your entire list to keep your name in front of them to pique their interests and tell them what you can do for them.
  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. To be the best, your customer must know what you specialize in. Let them know and tell them again and again.
  6. Sales and presentation skills. To win great jobs takes professionalism, knowledge and confidence. Firms who are awarded more jobs are well trained in sales and presentation skills, and show up at the project interview with their team rehearsed and ready to impress.
  7. Right place at the right time. Estimators are more than price givers. They are in the sales business and 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.
  8. Referral solicitation program. The easiest way to double your sales is to ask loyal customers for a referral. Referrals don't come often without asking, and when asked, customers will give. A simple checklist is all it takes to remind you to ask.
  9. Active in industry and community. Successful companies are seen by everyone, everywhere. They are active in their industry associations and community organizations. They serve on boards of directors and give time and money to make things better.
  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 complain about changing.

If you want to increase your chances of winning more than your share of profitable jobs, consider implementing these 10 tips. Make your bid only one small part of the selling process and join the list of very successful companies.