You Might Be a "Commodity Contractor" If…

Without separating your company from the competition you increase the risk of being viewed by the customer as the same, providing the same and delivering the same

Construction Workers With Bricks Freedigitalphotos

Contractors often struggle trying to identify what makes them uniquely different from their competitors. Whether you are a smaller specialty contractor or a large general contractor with loads of business development support, the task to separate one’s construction company from another can be daunting to say the least.

Daunting it may be, but necessary it remains. Without separating your company from the competition you increase the risk of being viewed by the customer as the same, providing the same and delivering the same. Such sameness can hang that ugly term on you that we contractors hate…a commodity. While not all commodities should be viewed as bad, it can be the “kiss of death” to the market success of a contractor.

To borrow from Jeff Foxworthy a little, see how many of the following statements might apply to you:

  • You might be viewed as a Commodity Contractor if the first thing you tell a customer is… “We’re a quality contractor.”
  • You might be viewed as a Commodity Contractor if you show pictures of completed “quality” work to the customer.
  • You might be viewed as a Commodity Contractor if you tell the customer about all the other customers who like you.
  • You might be viewed as a Commodity Contractor if you offer a discount for full payment paid up front.
  • You might be viewed as a Commodity Contractor if you seek taking customers out to lunch or bring donuts along with bid.
  • You might be viewed as a Commodity Contractor if your brochure says you’re that area’s “preferred contractor.”
  • You might be viewed as a Commodity Contractor if your website looks like your brochure and says you perform quality work and are a “preferred contractor.”

Now, before you consider questioning everything you’re doing that is even remotely close to the previous statements, consider this: There is a proper place for each of the efforts presented above. However, if this is “all you got” you are patterning close to the majority of your competitors. This isn’t going to separate you from the pack; it’s going to make you part of the pack.

Consider a few ways to separate your company from the pack of contractors who are presenting a similar image of their companies.

Do your homework and learn something about the customer’s organization or industry

This is huge! Why? Because very few contractors spend any time looking for such information — they spend all their time doing take-offs, measuring square feet or cubic yards. Yes, we must perform the numbers calculations, but we also need to learn more about the customer to demonstrate our greater interest in really serving his needs — especially with new customers.

This research isn’t always easy, but it must be attempted. Such findings might include learning about the company’s expansion plans that were reported in a small section of an article four months earlier. What you learn might be broader, such as uncovering significant trends in the customer’s industry — perhaps a strong push for the industry in fuel conversion or moving to automate more job functions traditionally completed by labor. The more you identify the changes, progress or challenges for the customer — and build that into your selling process — the better you will position yourself as more progressive and truly become the preferred “consultant” contractor!

Speak to your company’s results of saving customers money by better planning and solutions with specific examples

“Come on, man,” everyone wants to save money, right? Did you make some suggested changes to a past client that wound up saving the client money on options competing contractors weren’t smart enough to recommend? Share this! Did you “re-engineer” a portion of a project that actually allowed a client to redirect the savings on one portion of the job to another area of the job that needed attention? Share this!

This approach is much more convincing than simply informing the customer of all the good work you do while you provide them with before and after pictures. Remember, “before and after” pictures are not taboo, but they need to be tied to something of significance to the prospective customer — and that significance is most often tied to their finances.

When developing your estimate provide two or three solid solutions

Customers like to make their own decisions, but most contractors provide only one estimate based on their take-offs and calculations. The more progressive contractor recognizes that there might be different solutions to the customer’s needs. As a result, the contractor who provides two or three solutions, with specific services and approaches outlined and including the different pricing for each option, will place himself in the driver’s seat. 

It’s a psychological reality in the United States: customers like their options. They like to be able to pick from a collective lot of possible “best practice” solutions. They feel empowered by such opportunities. Rather than make your one-and-only estimate part of the pack that includes other contractors, submit several estimates and create your own pack for the customer to select from.

Note: The larger the project the less likely, and actually the less realistic, submitting multiple bids may be. However, even for the contractor bidding a large project there may be portions of the project that might benefit from having Option A, B, or C available.  Just keep in mind: most people like to have a choice.

Provide a work “look ahead schedule” for proposed work

Many contractors have taken some of my suggestions and develop a weekly “Next Week Look Ahead” schedule for their crews to better prepare for the upcoming week. This same tool, or certainly a version of it, could be included with the estimate, allowing the customer the opportunity to actually see how the job will proceed over the course of the time involved. 

Even if your job is only a few days or less in length, projecting the sequence of work to be completed will give the customer a better feel for the investment of time to be spent and how that time will be used. I guarantee you that your competitors are not executing this effort.

By the way, this is a process that is quite common for the larger contractors, especially those who will be coordinating with other contractors. General contractors are not the only ones who can execute this technique; try it and get a leg up on your competitors.

Provide customer bids with a “10 Point Quality System” check sheet

Ok, you’re going to inform the customer at some point about how “quality” is your highest concern and how well your crews perform work. Great! So back this up in a more definitive manner by giving the customer a check sheet that identifies specifically and clearly what makes your quality superior. Your “10 Point Quality System” might include some or all of the items listed below.

  • Discuss work process with client and provide schedule for work to be completed.
  • Take “before” pictures of areas to be worked to be benchmarked against “after” pictures taken at the job’s conclusion.
  • Contact client prior to each new starting point or phase of work to be performed.
  • Review each phase of work with client upon completion of the phase.
  • Organize the jobsite and keep it clean during work.
  • Maintain safety tools and communication during work.
  • Retain material tickets for client review if desired.
  • Warranty work in the estimate and offer an extended warranty to insure client satisfaction.
  • Conduct contractor and client “walk about” anytime during work but always at conclusion of project.
  • Create “punch-list” of items needing adjustment, if any, at conclusion of work performed.
  • Provide a post-job review for customer to suggest work for customer’s future planning or budgeting.

No matter what you might include on your list, it’s critical that you reflect the quality, safety, cleanliness, etc. that you believe your crews do provide. Again, it’s not that we are not going to talk about our quality craftsmanship, it’s just that we need to leverage that in a way that separates us from our competitors.

The Commodity Contractor just wants to bid work, win a few jobs here and there, but with no real creativity or energy to do anything any different. The Commodity Contractor’s prices will be driven lower over time because there is little reason for many customers to justify spending any more with that company. And, this same contractor will win his share of the cheap work that is out there. Still, if you want to set yourself apart, thereby increasing the chance to win more-profitable work, then integrating the points presented here will work in your favor.

Finally, most Commodity Contractors are not reading this article. They don’t want to work that hard at being that much better. Build the techniques shared here and start separating yourself from the less committed…and be a Preferred Contractor.

“Preferred Contractor!” Now that sounds better, doesn’t it? 

© Brad Humphrey, Pinnacle Development Group/The Contractor’s Best Friend™