A few years ago, we had a great loyal customer we built several office and industrial projects for every year. We had project meetings every week during the construction phase. After leaving his conference room one day, I noticed several of my competitors sitting in his lobby. This made me nervous. I called him later that day to find out what they were doing there. He told me the other contractors were tenant improvement interior construction specialists. He was asking them to give him proposals and bids to build out the interior improvements in the shell buildings we were constructing.
This shocked me. Why didn’t my customer of 10 years know we do lots of interior tenant improvement construction? In fact, in most of the projects we had built for him, there were interior office improvements included with our shell construction. It turns out he thought we specialized in building larger, ground-up projects only and didn’t want to be bothered with any small jobs. He was looking for a tenant improvement specialty contractor to finish out the interiors of his multi-tenant and office projects. It upset me that a good customer wouldn’t trust us to do this kind of work too. After all, we’re in the construction business! We can build any kind of project, large or small. It’s just framing, drywall, plugs, lights, paint and carpet!
In retrospect, he was right. We don’t have a dedicated tenant improvement project manager or division that specializes in servicing small interior office projects. Yes, we can build them, but not as efficient as companies who are set up for this kind of work. They use different types of foremen, superintendents and subcontractors. They’re used to working around existing tenants in occupied buildings. They have crews who work weekends and nights. I have to admit, they are really a better choice than our company for this kind of work.
Don’t Do Everything for Everybody!
Are you in the “Yes” business? Do you say “Yes” to any kind of job opportunity thrown your way? Experience shows that companies who specialize are more organized, more professional, more experienced, and make a lot more money than a jack of all trades. Perceived experts are the first called when a customer needs a pro to complete a tough project. Experts get the first chance to get jobs that require a little more engineering or technical knowledge. They generally give the first proposal and are often the only bidder. They come highly recommended and respected for their expertise and ability to complete a certain type of project.
What Are You Known For?
There are many ways to specialize. Review the following list and think about what kind of work your company is known for or can become the perceived expert in:
Contracts: Large or small, minimum or maximum size, bid or negotiated, per plans or design-build, cost plus or lump-sum, service or maintenance, etc.
Location: City, region or neighborhood.
Project type: Public or private, commercial or residential, new construction or remodel, site work or buildings, shell buildings or interiors, single or multiple buildings, buildings for sale or lease, single or multistory, etc.
Specialty: Schools or military, hospitals or renovations, office buildings or interiors, manufacturing or warehouses, medical buildings or labs, retail stores or interiors, new homes or remodels, track or custom homes, etc.
Difficulty: Technical or simple, single or multiphased, high-tech or standard, regular or overtime, night or weekend work, tight quarters or large site, extreme quality, etc.
Customer: Developer or corporation, company or individual, entrepreneur or chain store, sophisticated or first timer, multiple or single sites, homeowner or builder, etc.
More Than One Expertise is OK
The smaller your niche, the better you are perceived in the marketplace. Even if your company specializes in several types of work, split your customers and marketing into specific niches and attack accordingly. Don’t mail out brochures to everyone telling them you are great at everything. Send out specific expertise marketing pieces to profess your expertise in a single area. Target your marketing to the audience who needs that expertise. This will elevate your presence and boost your return on investment.
On your website, have a separate home page for each type of work specialty. People who are looking for contractors or installers, search by expertise in a particular type of work. The problem with being good at everything is you get selected based on price instead of competence. Specialists get hired for their knowledge and reputation for solving difficult problems. As a result, they can also charge more for their services and work.
Narrow Equals Strength!
Think about how you can get more focused on niche project types. The narrower your expertise, the more clout you’ll have in the marketplace. When I need to hire a specialist on a specific type of project, the harder they are to find, the more I’ll pay for their services.
Some other ways to set yourself apart from your competition is to be known for results. A competitor of mine is known for building projects 25% faster than everyone else. For this difference they get a 20% premium on their overhead and profit markup. Think about how you can you become known for speed, quality, value engineering, safety, training, professionalism, financial capacity, competent foreman, screened and drug tested employees, certifications, night and weekend work, etc. Any of these will create a niche for you and get you more money than the everyday contractor who will bid anything.
Smaller is NOT Smaller!
The only way to win profitable work today is to differentiate yourself from your competition. Becoming a known expert in something will accomplish this. According to a survey from the Society of Marketing Professional Services, the top two reasons construction companies don’t get awarded projects are their inability to market and properly present the differences between themselves and their competition, and their lack of expertise in a particular service niche.
Going small does not limit your opportunities. It increases them by going deeper into a market. When you continue to be and do everything for everyone, you don’t have enough time and can’t make enough money for all the different types of work you attempt to complete.
George Hedley, CSP, CPBC, helps contractors grow and profit as a professional business coach, popular speaker and peer group leader. He is the author of “Get Your Construction Business to Always Make a Profit!” and “Hardhat BIZSCHOOL Online University,” available on his website. Visit www.hardhatbizschool.com for more information.
