There was a time when general contractors (GCs) had more projects than teams to work them. Homeowners were buying. Proposals were as simple as working off past bids, cutting and pasting some new numbers, and adding different client names and job specifics. A nostalgic grin crosses your face. Those were the days. Today, you have to work harder and smarter. Customers are taking more care when selecting subcontractors, and to win their jobs, so must you.
Nexstar Network Inc. and PSMJ Resources Inc. coach business owners to successfully run their companies. Both serve the construction industry. Nexstar Network, based in Little Canada, Minn., is a national, member-based business development organization. PSMJ, headquartered in Newton, Mass., also has offices in the United Kingdom and Australia. The two companies may approach coaching differently, but they share many ideas when it comes to creating proposals that win business. Their chief strategy is simple: The better you understand your client’s needs, the better your chances of getting the job.
Building a relationship
“Generally, if you don’t know the person you are addressing well enough to use their first name in the salutation of the cover letter, you have no business submitting the proposal,” said Frank A. Stasiowski, FAIA, president of PSMJ. Stasiowski said that, while the request for proposals may give some details about your potential client, knowing these items won’t replace the importance of interacting with the potential customer to learn what makes him or her tick.
“Meeting in person allows you to ask and listen in order to learn more about their company and the project,” Stasiowski said. “How do they work with subcontractors? What problems have they had on past projects, with previous contractors? How are project teams run? What motivates the company? The better you can identify their issues, the better you can figure out how to help them and communicate it in a proposal.”
Lisa Schardt, business enhancement coach for Nexstar Network, agreed that your No. 1 goal is getting face time during the proposal process.
“The ‘mail-and-pray’ approach just doesn’t cut it,” she said. “You want to be relatable to your client, so learn who they are. They need to know who you are, too. Come in knowing your client’s industry. Find out if you work with the GC or someone else. Whether new construction or a remodel, the homework is the same to make your proposal stand out. Business decisions are often made because of a one-on-one connection or impression.”
Stasiowski once sat in with a selection committee for a government contract and saw a perfect example of this concept.
“Typically, proposals for these projects are set against a score sheet,” he said. “A committee may be up to 12 individuals who rank you based on your proposal. In my meeting, several of the committee members had met a particular contractor who impressed them. A few others really liked the cover letter. That contractor’s score wasn’t as high as a few others. After a discussion, they revisited the proposal and rescored it more favorably. We’re all human, and so are selection committees.”
Any face time with the client helps you personalize your proposal and is a way to get early decision-maker buy-in.
“Now that you can clearly articulate your understanding of the project, phrase sentences with some familiarity, such as, ‘based on our conversation with Ms. A or Mr. B, it is our understanding that the drivers of this project are …’,” Stasiowski said. “This shows you took the time to meet them, and you want to align your efforts with their needs. Sincerely mention how you enjoyed getting up to speed on the firm’s goals and plans for the project.”
Schardt added that one way to help a client get to know you is to include photographs of your team and your facility. Include company history, goals, values and mission.
Throw away the cookie cutter
A decision-maker can spot a generic proposal using canned content a mile away. Such proposals can communicate laziness, insincerity, or a lack of drive or enthusiasm for the project.
“We are not talking about the look of the presentation,” Stasiowski said. “That should be set and ready to use in all your proposals. Focus on writing creative content that revolves around a client’s issue. Identify the issues the client finds important and offer solutions.”
Stasiowski suggested using your cover letter to address the client’s top concerns and direct them to the pages in the proposal featuring your solutions.
“Take some risks, identify other areas you think the client missed and offer resolutions,” he said. “It shows initiative and critical thinking. If keeping to a schedule is emphasized by the client and you have software to address this, cite it. While you’ll want to include a page of references with contact information, also drop them into case studies. Maybe it’s how you saved time and money for a client. Also, only make promises you can keep. I read one proposal that boldly guaranteed no change orders, but it went on to explain what the client needed to do for that to happen.”
Creativity can also make a proposal stand out. For example, Stasiowski has featured an organizational chart that placed the prospective client in the center within a circle. Spokes led to the people and departments that would serve and interact with the client. In another proposal, the contractor didn’t want the client getting caught up with cost. He communicated where the contractor’s services cost fell under the total project budget; it came in at less than 1 percent. He then laid out in dollars each aspect of his company’s role in the project, so costs were not only clear and straightforward, but also in perspective and ultimately less intimidating.
“Align your credentials to the ones your client needs,” Schardt said. “And don’t assume you are going to get the job because of previous business. ‘Once a customer, always a customer’ is not a truism anymore. Management and decision-makers change. You have to re-earn the business every time.”
You are in business to make a profit. Setting your price shouldn’t be intimidating. You can negotiate less expensive ways of doing things, whether it’s using certain vendors, techniques and approaches. But your services are your services.
“Don’t let others define your value,” Schardt said. “When you are putting out a proposal, you build from a position of strength. Don’t guesstimate your costs. McDonald’s knows exactly the cost of what goes into a hamburger right down to the pickle. It’s bottom-up pricing. You need to account for your costs every operating minute. Number Cruncher is one of several great software programs to help you. Start with your break-even, and build from there. Don’t shortchange yourself. I’ve seen contractors settle for a 5 percent margin and lose money on the deal. You want your business to grow.”
Too often Schardt has found contractors setting their price through comparison of two competitors and then splitting the difference.
“Look at your profit and loss statements from month to month,” she said. “Then set a margin of profit that doesn’t hurt you.”
Stasiowski uses the adage: price on value and manage on cost.
“Don’t be part of that low bid/change order culture,” he said. “You’ll never win in price. You’ll lose money, and you may harm your good reputation. If you are hoping for return business, I ask, a return to what? It’s a losing proposition. Once a client knows he or she can get you for this cost, why would they pay you more the next time? It’s tough to manage your way out of a losing proposal. Negotiated contracts are the way to go. Bottom line, not everyone buys on price. It’s people having a rapport or a feeling of trust between each other.”
Finally, if you are invited to present your proposal, Stasiowski recommended you conduct yourself with eagerness and enthusiasm.
“Rehearse back at the office,” he said. “Make sure you bring staff that shows their passion for the project. It adds intensity to what they say and communicates a commitment to what your client is doing. You can win with passion, sometimes in the absence of expertise.”
GAVIN is the owner of Gavo Communications, a marketing services firm serving the construction, landscaping and related design industries. He can be reached at firstname.lastname@example.org.