Selling construction services is a largely quantitative process. It is no surprise to some who have used a numbers and sequence based system successfully. Given the fact that many contractors have had to be the salesperson-in-chief while managing existing construction projects, it is understandable that the use of a personality based sales process is of little value in construction contracting. Contractors like a numbers / process based system. Easy to manage in the blur of acquiring, building and tracking projects.
Most construction service buyers buy based on fact and focus. Remember, this is one of the largest purchases most people make (if not the largest). They are careful and sober, not emotional. The sophisticated (many times, wealthy) buyer is a product of bad experiences. His or her radar seeks facts and truth not large claims and promises.
We are in a hard business that penalizes the careless. If you over promise, that can be a financial problem in our low margin industry. Covering up for mistakes by selling more may work for a distributor but, it is impossible for a construction firm. Most, if not all, projects must make money since we are in a 4% net profit before tax, variable cost business. There is no room for guesses or unpriced promises. The business is too lean and the liability risk is almost unlimited.
Take a minute and think through your best projects. This is a good exercise. To start, a great understanding of the technical issues of the job was known before a proposal was submitted. The estimating and pricing process covered all the dangers and windfalls involved. From there, the customer understood exactly what they were getting. There was little miscommunication as to scope, speed, price and especially, quality and safety.
Value engineering was offered for a couple of areas (we don’t know of a project that hasn’t gone through a value engineering phase). The V.E. savings were projected with confidence due to experience and knowledge of the alternative materials and methods. We didn’t use some unproven material or method just because of the “sizzle” it generates.
Typically, the project started after a thorough study of the plans by the field management. Also, the project was executed with standard construction processes very familiar to the company including the field team.
Don’t forget, on our best projects (Cost, time, quality and safety) we probably were working with a repeat client who knows us and trusts us. In the least, they are a referral from a good client.
Thinking back to the selling process, we would be smart to replicate the sales process of these best projects. Stated differently, how do we make sure we have the best client, project information and business situation before we proceed?
We can be certain that the sales process should not be an emotional one. Where the client is charged up for a week only to be let down by the reality of construction. No, to do so only lets our client be disappointed who will certainly tell other potential clients.
From our research, consulting work and observations, we have concluded that there are 6 steps to be followed in the sales process. Different people call them different things however, these steps perform 6 critical functions to landing an above average project. One of our next posts will concern this selling process in construction. These 6 steps can be largely quantified.
If you can quantitify something, you can monitor performance easily. Something to remember when your salesperson’s whereabouts or progress is uncertain.
For more information on this critical subject, purchase a copy of my McGraw-Hill book, Managing a Construction Firm on Just 24 Hours a Day. We offer a bundle with Excel templates that are featured in the book to help assist in making financial, estimating and project management decisions.
Matt Stevens is President of Stevens Construction Institute, Inc. A management consulting firm which works only with construction contractors. Learn more at www.stevensci.com