PROFIT BUILDING
By George Hedley Catch More Fish!
You go fi shing to catch fi sh, not just fi sh. The guy or gal who catches the biggest or the most fi sh wins and gets to brag about his or her accomplishments until the next fi shing trip. To catch lots of fi sh it takes prepara- tion, planning, tactics, time and technique. It also takes knowing the right bait and the right place to fi sh. To win the big jobs in construction you also need the right bait and the right targets. Think of your bid or proposal as tempting bait customers will want to bite. Think of your target market as fi shing holes with lots of fi sh that want what your company has to offer. Just like in fi shing, when you decide to bid on
certain types of projects or customers, your goal is to catch either big ones or lots of fi sh. To be successful, you have to spend time researching and looking for the right fi shing holes where customers bite often. You also must seek profi table projects to go after, opportunities that’ll give you the best chance to make the most money, and jobs where the barrier to entry is high and the competition is low. When you offer the right bait and fi sh in the
right spots, your fi shing techniques will work and customers will bite your offer at a fair price. The wrong bait in the wrong fi shing holes will keep you bidding on the wrong projects against too many competitors with too low prices. To be successful, you can’t keep bidding the same way and doing the same things hoping customers will bite. And when you fi nally catch a customer, reel them in and decide if you want to accept their offer.
What happens when the fi sh don’t bite? Try different fi shing techniques, change your bait or move to other fi shing holes. Unlike when fi shing, stubborn contractors don’t look for new markets, customers or tactics to land more con- tracts. Frustrated contractors just keep bidding to the same customers over and over, using the same bait and proposal strategies as they’ve always used. Contractors often think if they bid enough jobs, eventually they’ll get their share. This strategy won’t work! Like fi shing, you must change your estimating and bidding strategies to get the big ones to bite more often. You have to use the right tackle, different techniques and tastier bait to get fi sh to think your bait is better than your competition, and continually keep look- ing for better fi shing holes.
8 METAL CONSTRUCTION NEWS January 2013 Track your catch ratio! k h i!
You stop fi shing if the fi sh don’t bite. In contracting you need a system to track and determine if your customers are biting often enough. By tracking your catch or win ratio, or the rate at which you successfully bid or propose on projects, you’ll know where to fi sh for projects. A 5-to-1 catch or bid-hit ratio equals one win for every fi ve jobs you bid on. Unfortunately, the majority of contractors don’t track this ratio and keep bidding to customers on projects against too many competitors without knowing why or when they’re successful or not. To me, this is like going fi shing every day, not really knowing if you catch any fi sh, and starving as a result of not keeping track of what bait works and which fi shing hole has the fi sh that bite!
Do you know what your catch ratio is? To determine how many jobs to bid, what type of jobs to go after, and which customers give you a higher percentage of their work, you must keep track of your bids and proposals. Keep track by project types, customers, job size and location. As you study your trends, you'll fi nd certain customers give you more work than others and you'll discover you do bet- ter with certain kinds of projects and markets. From these facts you can decide where you want to fi sh in the future to improve your success rate. You can also determine what type of new customers and jobs you need to target to improve your bottom-line results.
Offer tasty bait! What else can you include in your typical proposal or bid to entice customers to bite more often? Standard proposals with standard exclusions and inclusions are only standard and do not sell or con- vince customers to buy. Offering a lower price is only one aspect of winning proposals. What does your customer value as much or more than price? When you don’t ask your customer what they want before proposing on a project, you miss opportuni- ties to set your company apart. Every project has unique requirements that are often more important than price. Before you start working on an estimate for a customer, always ask them what additional award factors they are looking for in a contrac- tor. You’ll be surprised with their answers, which can include guarantees, warranties, supervision, cleanliness, track record, safety, manpower, trained crews, ability to fi nish on-time, night and weekend
work, technology, communication, value-engineer- ing, attention to detail and many other attributes that can differentiate your company.
Use better bait! On most construction opportunities, the primary goal of your bid is to get a meeting with the decision maker. At this meeting you can discuss the project in depth, review how you can help your customer meet their goals, explain why you’re the best choice, review pricing options, get a second chance to be the selected contractor, and get last look. It’s very diffi cult to accomplish this with a standard written proposal or over the phone. When you meet in person, you can look your customer in the eye, sell confi dence, negotiate the price and scope, and shake hands on a contract agreement. At the meeting, discuss every aspect and op-
tion that might infl uence their decision. Include dis- cussions about enhanced quality, fi nishing ahead of schedule, lowering the budget, eliminating change orders, your supervisor and project manager, reducing their risk and meeting their goals. As you present and discuss the entire project requirements and demands, carefully watch your customer’s face, expressions, body language and reactions to the pricing and ideas you present. Look for clues and suggestions on how you can offer more than what they want and be the chosen winner.
Have fun catching more fi sh! Like in fi shing, not every bid tactic and type of proposal bait will work on every job. But, try them and you’ll like the outcome as they improve your catch ratio as you win more work. When you’re not getting the results you want, change your tactics, try better bait and fi nd new fi shing holes as you look for profi table work.
George Hedley is a licensed professional business coach, popular professional speaker and author of “Get Your Business to Work!” available at his on- line bookstore. He works with contractors to build profi table growing companies. To request your free copy of “Profi t 101 For Contractors,” sign up for his free monthly e-newsletter, hire Hedley to speak, be part of his ongoing BIZCOACH program, or take a class at Hardhat BIZSCHOOL online university, visit
www.hardhatpresentations.com or email
gh@hardhatpresentations.com.
www.metalconstructionnews.com
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