Roulette

Winning bids is all about the “F” Word

In working with over 60 commercial flooring companies we have identified 4 competencies that when mastered, significantly improve business performance and consistency.

They are:

  • Lead Generation
  • Pipeline Management
  • Work in Progress Management
  • Performance Management (Know your numbers)

There is massive variation the maturity of these competencies from business to business.  We will headline some key points for each one, beginning this week with managing your pipeline more effectively.

The win rate for competitive flooring bids with General Contractors is very low.

In some cases, so low that the cost of resources to identify, estimate, and submit, is higher than the profit margin we achieve on the few we do win.

We have found that the win rate varies significantly from one flooring company to another, and from one salesperson to another.  The highest win rate we have seen consistently achieved is around 38% and the lowest is below 10%.

In all cases, the win rate can, and has demonstrably been improved, by adopting the F word.

Follow-up!

Let's look at this through the lens of two salespeople, Steady Eddie and Roulette Ron.

 

Roulette Ron is an ebullient, brash and colorful character.  He is full of stories and bluster.  He is your organization's worst nightmare for paperwork and systems.

He is always too busy with his next bid to attend sales meetings.

He believes if you gave him 2 or 3 more estimators he could double your revenues single handedly!

Roulette is his moniker and yes he's a gambler.  A quote and hope guy.

He's not stupid.  He has his ear to the ground and if there is a bid to be had.  He's your man.

But here's the thing.  Ron sees the bid on the bid board.  He plucks it off, throws it over the wall to estimating and then waits for the GC to do all the work.  He lets that roulette wheel spin and waits for the croupier (in this case the GC Bid Manager) to tell him if he's won or not.

He maybe wins 10%. Ron doesn't really care.  After all he is playing with house money!!  He's laughing all the way to his bank.  (Your bank balance is depleted with all the estimating and admin costs!)

 

Steady Eddie is more retiring, bordering on shy.  He doesn't think he's a salesman.  He identifies with being a craftsman who solves flooring problems.

He doesn't bid everything.  he bids where he knows or has worked with the GC.

He knows he has maximum influence before he accepts the bid.

After all, the GC is trying to convince at least 3 contractors to bid so he they can submit quality proposals to the ultimate owner.  They know it will somewhat of a calculated risk on Eddie's part. So they will gladly talk to you at this point.

 

The first thing Eddie does is to call the Bid Manager! (Note: he doesn't blindly download the electronic bid and then forward to estimating!!!)

Look, Eddie knows most of them are interns or juniors.  But you know Eddie's best clients today were juniors in the past and they owe him.  He tries to help them! Shock horror!

He finds factors that are important to the GC other than price.

 

Secondly, Eddie knows he can't win without getting a seat at the table.

You have to be one of the 3 players with a chance

(Roulette Ron is happy to be one of the 36 numbers, Steady Eddie is already improving his worst odds to one in three).

He does this by submitting a minimum viable bid. He keeps all the extras and alternatives as separate and he judiciously puts some costs into general conditions.

 

Thirdly, Eddie is no dummy.  He leverages his vendors.  On any bid there are one or two materials that comprise the bulk of the costs.  He calls those vendors and gets a price agreement.  If he feels he aint getting a competitive rate he'll no-bid.

 

Fourthly, he asks when the decision will be made and let's the bid manager know he will follow-up.  Eddie holds the Bid Manger accountable.  Subtly he creates a peer relationship.  He is no longer a supplier looking for last look.  And when he calls, he reminds them of the obligation and he gets vital information and often gleans additional competitive intelligence.

 

Fifthly, he is swift to offer value engineering and answers any technical questions the junior bid manager may have.  And it is always a phone call.  Not just a robotic email. He leverages the non price benefits he uncovered in his pre-bid conversation in the first step!

Steady Eddie wins 40% of his bids.  And his estimators and contract admin love him.

 

Let's recap.

Roulette Ron submits more bids, probably makes little to no phone follow up calls and wins 10% of bids at high cost to you.

Steady Eddie submits less bids, follows-up with 6+ phone calls, wins 40% of his bids and consumes less overhead.

 

Moral of the story: Don't forget to “F” your bids

 

PS Want to grow your employees, profit and cash–see our new program The Flooring Academy