Only 50-60 percent of general contractors buy subcontracting services based on price. But most specialty contractors think 90 percent of the jobs they win are based on price.
Discerning general contractors know that the bid is just the initial cost, not the total cost in terms of value and time. They only buy on price when they don't have any other information on which to base a buying decision.
Specialty contractors, however, often fail to provide that information. By making your company different from your competition, you can win more jobs. To emphasize that difference, develop and implement a marketing plan that focuses on what makes you unique.
Price is how most contractors differentiate themselves. But price is too easy for a competitor to match or undercut. To set yourself apart, consider adopting the following strategies, that are difficult for the competition to match:
Create A Memorable NameAn excellent way to differentiate yourself is to give each service or product you offer a marketable or memorable "name." One building contractor, for example, calls its process for administering the punch list, "The Rolling Punchlist," which is merely its way of compiling and resolving items on the list during the job instead of saving all the items until the end.
Another contractor offers a "Pre-Warranty Expiration Inspection." In this case, he provides a free inspection and repair of any job a month prior to the warranty expiring. Not only is the service unique, it has a name. Special warranties or guarantees can also offset a higher bid.
Create A Unique Product Or MethodGeneral contractors tend to believe subcontracting services are very similar. Find ways to make your installed product look different or ways to speed construction for the general contractor.
Always meet with the general contractor early (before you start work) to discuss the best approaches to the job. Offer "value-engineering" suggestions to help differentiate what you provide.
Your use of creative construction techniques and delivery systems will also cause buyers to view your company more positively than they view your competitors. For example, prefabbing saves on labor time, and also saves time for the general contractor.
Expand Your ServiceTo get more work in a competitive environment, providing excellent service is just a prerequisite to bid. Respond quickly to inquiries. Offer technical expertise. Go beyond the specs. Offer a special service that makes the general contractor look good - and give this service a "name." For example:
- Bring a list of the scope of work done each day to the general contractor's superintendent, and provide a list of what you hope to accomplish tomorrow.
- Ask if you may attend the weekly meetings between the general contractor and owner. At these meetings, suggest ways to speed the project or to work through scheduling and coordination problems.
- Offer to manage other specialty trades with your construction management services.
- Offer design-build services rather than waiting for the design from the engineer.
- Develop a job-specific safety program. State the likely safety hazards on a job, and list the actions you will take daily or weekly to ensure there are no accidents.
Build RelationshipsHaving a good relationship with a general contractor or buyer of your services results in repeat and new business.
Most specialty contractors develop a relationship during the job with the general contractor's field superintendent, but when the project is over the relationship stops. Don't let relationships with general contractors slide.
Get together with them between projects by meeting for breakfast or lunch. Being proactive in building and maintaining these personal contacts gives your business a competitive edge.
If this kind of relationship building makes you uncomfortable, create a service that gives you an excuse to meet with general contractors between projects. For example, offer a free inspection at 30 or 45 days post-project, and walk the job with the superintendent.
Build A Good ImageRelationship building improves your image. Are you perceived as easy to get along with and flexible? Are you a team player, or are you a loner or a change-order pursuer? A good image helps you sell yourself, even if you are not different from your competition in other ways.
Most specialty contractors just pick up the plans and specs, figure a price, and fax a bid back to the general contractor. Go that extra step and make a phone call to ask questions. What's important on this job? What services can you provide? What are potential problems, and how can you help the general contractor avoid them?
Your employees out in the field should be cooperative and easy to work with. This may require in-house, customer-relationship training and creating a company culture that emphasizes teamwork.
Provide A Measure Of Your SuccessIn addition to giving each of your services or products a "name," monitor and measure them constantly to develop a "continuous improvement" culture. This should facilitate a competitive advantage in the sales process as well.
Consider a scenario in which a buyer asks two different specialty contractors about the quality of their work. One contractor states, "We do good work," while the other declares, "We have an overall quality rating of 4.8 out of 5 based on 250 customer surveys taken over the last three years." Clearly, the second response provides evidence to support claims of quality.
After completing a project, have the client respond to a one- or two- page survey about your work. Use the survey data to make positive statements about your company - both in brochures and in meetings. To encourage completion of the survey, deliver it to the client personally, or fax the survey and call to follow up. You must be aggressive to ensure that the surveys are returned.
Another measurement you can use in your marketing efforts is the Experience Modification Rate (EMR) from your insurance company - if it's below 1. Also use that figure to market the effectiveness of your company's safety program.
Make A DifferenceIdentifying or creating the differences between you and the competition takes effort. Set aside time with your employees to brainstorm approaches for achieving this goal. Make sure your final ideas are specific and present measurable concepts of your services.
Unfortunately, a lack of time makes it difficult for some specialty contractors to market themselves well. Consider hiring an outside consultant if time is a problem. Remember, investing money in improving your company's image is sure to lead to more business.
Specific Applications For Specialty ContractorsHow do some specialty contractors differentiate their contracting services from the competition's? Here are some suggestions:
- Quality. Promote the dollar value of helping customers stay on schedule. For example: "We preserve general contractors' profits by saving them money at the end of the job. How? With a shorter punch list that gets them their retention sooner."
Service. Emphasize your ability to reduce the number of specialty contractor by being a single source for all work your segment might involve.
People. If you've got certified technicians on the payroll, tell your customers about the workers' demonstrated abilities. Train your foremen in people skills. Maintain a personality checklist, and then match the foremen to customers' needs. Assign your best problem-solving superintendent to demanding jobs, or your best craftsman to tight-tolerance projects.
Productivity. If you've got high-tech equipment, tell customers about the benefits.
Marketing. Produce videos and/or slide shows that introduce potential customers to your project managers, foremen, and other construction team members. Keep a public relations person on retainer to take advantage of opportunities to publicize high-profile jobs. Emphasize computer technology that gives the customer continually updated job progress reports or instant communication with the project manager.