From Estimating to Selling: Reducing Risk and Winning Contracts
If bidding is your only method of business development, then you have placed an enormous burden on your estimating staff. Sharpening the pencil to win competitive bids and eek out profits can be counter-productive.
Making that profit up through change orders and claims, which often result in frayed client relationships, can also be counter-productive in the long run.
When you compete on price alone, you let the competition help set the price and increase your risk.
While estimators are extremely valuable, they are not magicians. They may be meticulous, accurate and knowledgeable, but they cannot control the competition, influence the owner or work miracles. This begs the question of how to win more profitable jobs.
Let’s face it, if you had a bigger and better pipeline of opportunities, your chances to win could go up exponentially. How can you introduce more selling into your business development mix and build that pipeline of quality opportunities? How can selling complement the estimating department’s performance and be introduced in a seamless manner?
Capitalizing on Relationships
You already have relationships, or you wouldn’t be in business. A key principle of Marketing 101 is to take advantage of existing relationships and sell another product or service to existing clients. The clients already know you, and you should have credibility with them.
You just need to find out about their needs, and that comes from asking them the right questions.
• How do you do your estimating? Do you ever go outside for professional estimating services?
• How do your in-house project managers juggle their workload? We have two excellent project managers available that could be outsourced to work under your staff. Can you use one of them?
• How does your maintenance division address emergency repairs? Can they use some help in HVAC, electrical or plumbing on an as-needed basis?
Note that each suggestion was preceded by an open-ended question to get the client talking about his problem. If you can solve them, you have found a home. You are also better positioned to win by:
• Learning more about forthcoming projects and being more selective in bidding;
• Making the shortlist more often;
• Understanding the client’s needs better than your competition so that you can provide greater value, a better bid, a viable alternate bid or some extras.
Clients need good contractors, and they should be interested in your broad capabilities. If they like you, they will find a way to give you business. They just need a good reason to do so, and it’s not necessarily the lowest price.
Publicizing your successes, either by advertising or through articles, enhances your lead generation program, public relations and credibility. This could be an important arrow in your marketing quiver, especially when you bestow the accolades on the client.
Proposals vs. Estimates
Winning contracts by way of a proposal requires the services of a good proposal writer and a proposal team with assigned responsibilities, knowledgeable of the RFP process. If you do not have this in-house capability, it can be learned, either by total immersion, by retaining a consultant or by teaming.
Sophisticated clients are interested in what you know about their projects and needs and your approach to solving their problems. They seek the best technical solution, so leave your standard proposal boilerplate on the hard drive. Your best technical writers are usually your senior project executives, who will focus and learn as much as they can about the project and the client.
If the project is big enough, some firms will hire the project manager a year in advance of the RFP to serve as the “Capture Captain.” As such, he/she will position the firm to win the contract.
If you’ve done the job of selling, then the proposal becomes merely a form of documented evidence for your client’s boss.