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Construction Programs & Results Inc

We Like to See The Good Guys Win!

Discouraged and ready to hit the road

by Michael Stone

Got a note in the other day. Does it sound familiar?

"We recently bid a job that was given to us on Wednesday to be completed the following weekend. It entailed 5 offices measuring 12X10 X7. These offices were furnished and carpeted. Our bid was to move the furniture into the center of the room, cover, prep rest of room, remove wall hangings etc., and then paint all four walls. The ceilings were not included. In addition to this we included fixing any nail holes and also replacing furniture and cleaning office after our clean up and punch. We bid $2,600 based upon our usual formula and the fact that it was a rush job."

"We lost the bid to someone who bid $1500 for the whole job. It does seem as though there is a "new norm" and that prices are coming down accordingly. I still don't want to bid on price but I don't think this bid was unfair and maybe we do need to change our bidding process. The business we submitted the bid to is laying off 25 people in their maintenance area and is now seeking outside contractors to do the work. No one has any money these days."

"I am very discouraged to say the least and ready to hit the road. What do you think?"

I receive a note like this at least once a week. I will respond here the same as I would if they were to call me on the phone and ask what I think.

The sales call is where you set the parameters under which you will work. If you don't set the parameters, the customer will. It is obvious here that the "sales call" involved measuring the facility, estimating the job and giving the potential client a price for the work. Given their financial situation the odds were good that price was going to be the deciding factor. The salesperson did not get any commitment before doing any of the work. Why?

First question out of my mouth with the prospective owner of this building would have been, "What is your criteria for selecting your contractor?" Followed immediately by, "When will you be ready to make your buying decision?" Those two questions would put the owner on notice that I was not there to dish out prices. I am serious about doing my work and if you just want a price, go away. In this situation, it would also be appropriate to work in questions like "Why are you laying off maintenance staff?" And "Do you think you can get outside contractors to perform your maintenance cheaper than you can do it in house?"

We discuss the questions you have to ask on a sales call in our book, "Profitable Sales, A Contractor's Guide". The purpose is to discover what the owner is thinking. If their primary interest is price, sorry, I'm late for lunch. It's time to leave and look for someone who is willing to pay a fair price for my services.

In this situation, it's also important to look at how the company is attracting leads. If you are offering "free estimates" or marketing to those who are looking for low prices, this is what you'll get. I think this contractor needs to revisit the game plan on how to attract business to their company. When your competitor is bidding a price that is almost half your price, and getting the job, you're aiming for the wrong market.


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