How to Win Contracts Without Being the Lowest Bidder
By Tony Bass
During my seminars, I tell contractors there is a financial benchmark that the IRS, your accountant or your banker will never ask you for. But if I work for you, we will figure this out. The ultimate measurement for sales success is your close ratio. Are you spending a tremendous amount of time bidding, but not winning? Think about it. Could your close ratio be higher? Are your proposals and presentations setting you apart from the competition?
Note: Calculate your close ratio by dividing the number of jobs sold by the total number or estimates written. I have worked with contractors who have a close ratio as low as 10% and as high as 83%.
By standardizing your proposal process you will look more professional, separate yourself from the crowd, and win contracts even when you are not the lowest priced contractor. When your prospect sees you have it together on paper, they can assume they’ll get quality service out in the field.
First is the cover sheet, which begins a booklet-like appearance. Binding your presentations with a clear cover and including the customer’s name and address personalizes the proposal. The next seven to ten pages are your sales script. With a sales script, you can train others to be an effective sales person for you firm!
The second page should be a brief introduction letter with a headline. The headline should be a restatement of what the client has asked you to provide. When you meet with Ms. Prospect, and she says, “I’m looking for a low maintenance, backyard paver patio,” write “Proposal for a Low Maintenance Backyard Paver Patio.” When Ms. Prospect sees the headline she will say, “Wow, that’s just what I’m looking for!” Incorporating THE headline is a key strategy to building a proposal that will be sold.
The next page is a company profile and how you begin to differentiate your company. List what professional organizations your company is a member of and then tell them your history. This should tell the reader what you are all about – your company story, and what services you can provide.
After that include licensing, insurance and reference information. If you are licensed or certified but you don’t tell people about it, your efforts are pointless. Explain your insurance in detail providing limits of coverage. Always, include references and how much they spent. That way your prospect can get some comfort knowing you have experience with projects similar to the amount of money in their budget.
Page five is a company photograph. This picture will serve as brand identity for your company. It will show prospects the size of your company, the number of employees, the professionalism of your look and maybe even some of your productivity-enhancing equipment.
Next, include a document entitled the “Compilation of Services.” The Compilation of Services explains technically exactly what your company will and will not do (think plans and specs). Setting expectations from the beginning can solve a lot of problems down the road. By explaining your process in complete detail, you build a competitive advantage and perception of value in the customer’s mind.
Youve built a strong perception of value about your company and services, now it’s time to talk price. What’s important is to help a customer look for options – so don’t give just one price. Consider giving at least two prices, because what the customer really wants are solutions. If you only give them one price, they have to look elsewhere for a second bid. However, if you give two prices or perhaps three, then they have options to choose from. Who would you rather bid against: other companies, or yourself?
Right after you give a price, it’s time to go through the guarantee or the warranty on your services. Your guarantee is an important part of the value proposition and can make a huge impression on the prospect’s perception of you. If your supplier provides a 5-year product warranty, explain it in detail.
After the warranty, include a copy of your company newsletter or other marketing collateral. This is another way to differentiate your company in the sales process. Photos of completed projects, similar in scope, can be powerful sales tools.
The final part of the presentation is the credibility piece. For example, use an article published about your company. Publicity builds credibility. Perhaps you have been interviewed on TV or radio. A CD could be provided with a copy of the interview. I encourage you to include credibility pieces in every presentation you give. This provides a lasting impression to potential clients to go forward and trust your firm.
If you give your potential clients all this information in an organized and clear format, you really build a compelling case for your company. Remember, the more information you provide, the better off you are. When you leave gray areas, you create opportunities for misunderstandings and misunderstandings can lead to problems. Implementing these simple ideas can help your team sale more efficiently, more effectively and most important – more consistently.
Tony Bass, a Vander Kooi Associate since 1999 is author of “Growing your Landscape, Irrigation, Tree Service, or Snow Removal Company.” Tony bases his counsel on 20 years of landscape industry experience, including founding, growing and ultimately selling his initially small landscaping business for a seven-figure profit. He is also founder and president of Super Lawn Trucks, which manufactures vehicles designed specifically for lawn and landscape contractors. Contact: Tony@tonybassconsulting.com