Every service company, professional, engineer, contractor, subcontractor or builder I’ve ever met boasts how their quality and service is superior to the competition. But after you present your proposal and the excitement settles down, what really matters? PRICE!
Will your customers pay more?
It’s great to take pride in your company’s awesome service and quality workmanship. Thinking you’re better is one thing, but getting paid more than your competition for better quality is another. Ask yourself this question:
Do your customers pay your company more than your competition for the same work?
To get paid more, you must offer more. Most companies want to sell quality over price, but really don’t offer any more than their competitors.Getting awarded a contract is normally based on bidding lump sum for the minimum required per the project specifications, plans and customer’s project requirements. When preparing a proposal, estimate or bid, most companies never consider including more than the minimum required. Why? They’ve got to be low bidder to get the work!
Imagine living in a world where customers, clients, project owners, developers, builders and homeowners actually pay more for quality work and excellent service. I took an interesting survey while speaking at a Construction Owners Association of America convention. COAA is comprised of organizations and companies who regularly engage in building major construction projects as the owner or developer. During my presentation, I asked these attendees to tell me how much quality and service matters when selecting architects, engineers, contractors, subcontractors, suppliers or maintenance companies. The results were not what I regularly experience in the real world.
Quality and Service Matters!
Ninety-five percent of these project owners surveyed stated quality and service matters when selecting their service providers, suppliers and contractors, and 89 percent said they will and do pay more for better quality and service! I found this astonishing. As a general contractor, when I bid or propose on most projects, the contract award is primarily based on the lowest bidder. Why? The quality is already determined by the project plans and specifications. The survey showed the following:
How much more will building owners and developers pay for quality workmanship?
36 percent will pay 1 to 4 percent more
36 percent will pay 5 percent more
18 percent will pay 10 percent or more
and ONLY 10 percent will NOT pay more!
How much more will building owners and developers pay for good service?
38 percent will pay 1 to 4 percent more
29 percent will pay 5 percent more
17 percent will pay 10 percent or more
and ONLY 16 percent will NOT pay more!
Do you sell more than price?
Most general contractors, subcontractors and suppliers are proud of their quality of work, reputation and personal service. But today’s financial demands, project complexities and tight schedules require project owners and developers to often look for more than a low bid. However, if they aren’t aware of the added value or quality workmanship you offer, the buyer has no choice but to evaluate and select based on price.
The bottom line—four out of five say they will pay more for better quality and service! How much more and when depends on each customer, project and property. In order to sell quality over price, you must determine specifically what your customer wants on every project you propose on. Focus on the important issues that make a difference by asking before you bid, and then address it in full detail in your proposal.
George Hedley owns Hedley Construction & Development Inc. and Hardhat Presentations in Costa Mesa, Calif. He is the author of “The Business Success Blueprint Series,” available in eight workbook and audio CD sets. Hedley is available to speak at your organization about his proven system to build profits, people, customers and wealth. Construction company owners are invited to attend his two-day Profit-Builder Circle boot camp, held regularly. Visit www.hardhatpresentations.com for more information.
Check out next month’s column on the 7 ways to sell more than price.