TWIA Commercial Property & Casualty
How to win without being the low bidder
Apr
Chad Prinkey is CEO of Well Built Construction Consulting, a Baltimore-based firm that delivers strategic consulting, facilitation services and peer roundtables for construction executives. Opinions are the author’s own.
How many times have you gotten a follow-up call about a potential project feeling dejected as you alert your team that you weren’t the low bidder?
It’s as if the mere fact of being not low ensures you cannot win the project. If there’s still time, your precon team may rally to cut the price and try to eek out a win against the odds, but more often, this information is a notification that your competition was awarded the project.
However, I’ve worked with dozens of companies for whom the notification that they aren’t the low number is more often followed by a reassurance that their client is going to advocate on their behalf and steer them the job regardless. Let’s outline how they make that happen.
Give them a reason
Chad Prinkey
Permission granted by Well Built Construction Consulting
“But all this customer cares about is low price!” We hear this line daily as a defense of longheld beliefs that their darned customers just don’t care about value over price. Here’s a new belief system to consider: If your customers don’t care about anything but low price, you haven’t given them a good enough reason to.
Would you spend more money for something if you didn’t see a meaningful difference between your options? I wouldn’t. That said, when you believe something is that much more valuable than the other options, if you’re like me (and most people), you do whatever is in your power to justify the additional expense.
If you can accept this premise, the question you must ask is how you can earn a position in your clients’ minds that you are that much more valuable than the other options?
Build relationships
Step one is building relationships with the right people. If your primary point of contact with your customer thinks you are the best in the business, that may not translate into a dollar more than your competition if they cannot award the project or at least significantly influence the award.
If you’re a GC/CM, navigating the owner’s decision-making team can range in complexity. Question and discern the data you gather to identify all of the players and their various roles in the decision process. Ideally, do this completely independently from any specific project pursuit, as your questions will be met with more skepticism when a live project is on the line.
With this intelligence, you can create a business development strategy to build credibility and earn favor with those who control your fate.
The landscape can become even more complex for specialty contractors, as the GC/CM may or may not be fully empowered to make your award. Depending on contract type and delivery method, the owner or even other third parties may weigh in on awarding your scope.
Our clients have found that, while pursuing relationships with owners independently of any project pursuit can have significant payoffs for some trades and market sectors, it always pays to build deep relationships across teams and departments within their GC/CM clients.
Choose the right client
Buyers can be persuaded of your value with the right strategic approach. Once you have the opportunity to win them over, focus less on nailing a winning approach and more on listening closely to what they care most about.
Tailor your approach to selling your company to what matters most to them. If what matters most to them is not a strength of your company, you must be willing to accept the possibility that you’re not a fit.
Keep in mind, though, that not everyone should be your client, and that’s OK. Focus on the clients who care most about the things that make your company special.
Focus on operational advantage
Once you’ve been given a chance to prove yourself, you must follow through. Your friends won’t consistently pay more to hire you if you’re not actually better than the other options out there. This is where becoming operationally excellent comes in.
You can’t just think you are better than the other guy, you need to know what the market standards look like and raise your internal standards.
Conduct market research by speaking with your clients and competitors to understand what the norms are. Hire people away from your competitors to gain insights into what they do better than you and what advantages you can exploit. Build processes, train your team relentlessly, and ensure you have systems that allow you to monitor your consistency with the standards.
If you’re reading this — whoever you are — there’s room for improvement.
Create a superior strategy
Don’t be afraid to ask clients for the preferred contractor treatment you deserve. Can we expect an opportunity to meet with you after we bid? If we’re not low, will you contact us and negotiate from there? Can we negotiate the work directly with you instead of competing?
Once awarded the work, get regular performance feedback. Find out what your team can do to better meet your clients’ needs and deliver. Then go confirm your team is out there crushing it.
Leverage your success
Document your clients’ positive feedback by asking them if they’d provide a testimonial and asking them to serve as references for you on other projects. Get credit for being the amazing service provider you are, and you’ll be building a powerful case against the apples-to-apples procurement environment your buyers tend to create.
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