Most contractors think their reputation for quality work and exceptional service should get them lots of referrals and win plenty of work. Most don’t have a budget for marketing or sales, and most don’t really think staying in front of customers matters enough to develop a system to build loyal customer relationships.
No matter what most contractors think about business development activities, their actions speak loudly: wait for customers to call, pick up plans, bid cheap and hopefully win enough work to keep busy. This old school construction business model hasn’t worked for years, but contractors continue to offer low prices to fill their sales pipeline as their only sales system.
Does your sales pipeline stay full
How do you ensure your sales pipeline stays full of profitable projects proposing against only a few qualified competitors at high margins? Look around at very successful construction companies in your market. Their sales strategy is not to sit and wait for the phone to ring.
They have a pro-active business development system that attracts continuous customers and preferred targets, stays in touch with customers and spreads the word around town who’s the best at what they do. When you wait for customers to call and ask you to bid, you’re at the mercy of their decision whether to call.
Read next: 4 Ways to Increase Sales from Existing Customers
Plus, they control who is your competition and determine if your sales pipeline stays full. Not a good way to run a business. These six pro-active measures can help construction contractors fill their sales pipeline and keep it full.
1. Track your sales pipeline
To get started building a steady sales pipeline, determine first how much money you need to bring in every month and annually to build and grow your company. As a construction business coach, I help clients determine the sales they need to hit their goals using a ‘Sales Award Tracking’ system spreadsheet which lays out the bid, proposals, bid-hit ratio (number of bids versus awards won) and award volume they need on a monthly and annual basis.
To get a sample of all sales tracking systems described in this article, email [email protected].
Sales Award Tracking System
Annual Monthly
Goals
Gross Profit (OH + P) Goal $ 1,200,000 $ 120,000
Sales Contract Award Goal $12,000,000 $ 1,000,000
Bid-Hit Ratio 20% 20%
Bids & Proposals Required $ 60,000 $12,000,000
Actual
Bid & Proposals Volume $________ $_________
Bid-Hit Ratio ________ _________
Contract Awards $________ $_________
Contract Awards Cumulative $________ $_________
Gross Profit Awards $________ $_________
Gross Profit Cumulative $________ $_________
Over / Under Goal $________ $_________
2. Determine what type of work to target
After first determining what sales and gross profit you need to win every month, next decide what kind of projects and customers you want to target and attack. Without a focus it’s hard to aim at anything or improve your sales results.
Contractors who struggle with profitable sales tend to do any job, any size, anywhere, for anyone. Because they are not focused on one or two project or customer types, they can’t develop a steady sales pipeline full of good jobs to win.
What are your best customer types that have a potential to develop an ongoing flow of high-margin work with? What are your best project types, job sizes, locations and contract award methods? By concentrating on only a few customer types or markets you can build a reputation as an expert in that type of work. Plus, customers are easy to find if you know which type and who you want to target.
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For example, a generalist says they build industrial buildings while a specialist has a specific sales strategy and plan to attack food manufacturing companies who require expertise in clean, healthy, hygienic construction in an open operating plant environment. Who do you think has the potential to make more money and win better work against less competition? The moral of the story is to focus on specific targets to make more money.
3. Create a target market and customer list
In order to keep the sales pipeline full, you have to have customer targets to market and sell to on a regular basis. Make a list of your existing and new customers you want to go after, target and do business with in the future, including the new markets you want to do business with.
Sales Pipeline Target List
- Top Loyal Customers
- Repeat Customers
- Past Customers
- New Customer Targets
- New Market Targets
4. Develop a sales activity calendar
Now that you have a sales pipeline customer target list, do something about it! Start with the low hanging fruit or customers you already know. Determine how you can best get them to want to hire your company more often than they have in the past.
For each top, repeat or past customer, develop a plan of attack. List out all of you customer targets and decide what sales activity will work for each to improve the bid-hit ratio or sales pipeline with them. Include the specific sales activities for each target and how often you will attack them (minimum three times per year per customer).
Sales activities can include:
- lunches
- ball games
- industry dinners
- golf
- fishing
- mailings
- postcards
- gifts
- lunch and learns
- presentations
- field trips
- information
- brochures
Keep track of your sales pipeline activities every month in your regular business-development meeting.
5. Stay focused on getting more work
Contractors are generally too busy working on building their projects and often put their estimating, bidding and sales activity as a second priority. After they solve all of their daily issues, field challenges and job problems, they try to find a little time to focus on winning some work. Business is simple — GET work and DO work.
When you spend all your prime time doing work, getting profitable work never happens. To develop a steady sales pipeline full of high-margin customers and contracts takes a top commitment to make getting and winning work just as important as doing it.
Profitable construction company owners dedicate almost 50% of their time on the “get work” side of their business. They hold monthly business development strategy meetings, review their sales and award tracking results, focus on building customer relationships, make sales calls weekly, and make sure their company marketing plan is in place and operating on a continuous basis.
They also focus on potential, future, current and recent proposals, estimates and bids. And most importantly, they concentrate on pro-active follow-up after submitting each and every bid and proposal.
Read next: Sales Follow-up Is Key for Construction Contractors
Weekly BIZ-DEV, sales and estimating meeting agenda
Who: President, maketing, sales and estimating
When: Weekly Monday AM
1. Review estimating, proposal and bid schedule
a. Potential projects to bid, propose and estimate
b. Current jobs estimating and bidding
c. Bid and proposal follow-up activity
2. Schedule weekly loyal customer activities
3. Review weekly sales call action plan
4. Develop weekly customer target action plans
5. Review and plan future sales opportunities
6. Commit to new customer target activities
7. Plan upcoming marketing activities6. Commit to keep you sales pipeline flowing
By committing to take regular business development, sales and marketing activity steps, your company will begin to find better customers and higher margin work. When all you do is bid and build, it’s hard to maximize your bottom-line. Be more pro-active and stay focused on getting the work you want, and your sales pipeline will flow the way you want it to.
Read next: 10 Steps to Winning More Construction Customer Sales
George Hedley CPBC is a certified professional construction BIZCOACH and popular speaker. He helps contractors build better businesses, grow, increase profits, develop management teams, improve field production, and get their companies to work. He is the best-selling author of “Get Your Construction Business To Always Make A Profit!” available on Amazon.com. To get his free e-newsletter, start a personalized BIZCOACH program, attend a BIZ-BUILDER Action Plan Boot Camp, or get a discount at www.HardhatBIZSCHOOL.com online university for contractors, E-mail [email protected].