Many of you are in 2nd and 3rd generation businesses. You can remember what it was like before the advent of the electronic bid.
Firstly, you had to go to the contractor’s office to pick up and view the plans. Those plans were things of beauty.
Crafted by expert draughtsmen each plan told the entire story on one giant page.
Not only beautiful but expensive. No mass production and being shopped out to lots of bidders.
Often you, the flooring sub would work in the contractor’s bid room jointly producing the takeoff. This intimate atmosphere created deep and lasting relationships.
As a result, you would win most of the ones you worked on or certainly you could get a high hit rate on your must-have wins.
And, if anything changed the plan was marked up with clouds to highlight the changes. Easy to see.
Well, a lot has changed. And not necessarily for the better. Welcome to digitization. Which can often mean commoditization.
Electronic transmission of digitized bids has changed the landscape for several reasons:
- Communication and interaction between you and your customer have become much less personal.
- It is cheap to send digital bids so everyone is in on the act (lowest price bid often wins)
- Some of the design is now done with junior architects using basic CAD systems.
- Your estimator does most of the takeoff and detail bid. They have more of a relationship with the customer than the PM
- Lesser involvement of the PM means they don’t get as many opportunities to add value and advice to the contractor
- Very hard to track changes on a small computer screen—you have to reference a list and do cross-checksWe track our client’s sales pipelines. We know any one PM/Salesperson is handling as many as 70 bids at one time.The result—you the owner spend a ton of money creating these bids and the win rate is less than 20%!
PM’s just can’t follow up on this volume and a lack of intimacy means the PM has a minimal relationship, so bids are won and lost on price.
Look, we know your salespeople aren’t going to bid less (quote & hope) without good data and intelligence (we can and do provide this as part of our programs).
What we do suggest is your PM’s pick 1-2 bids per week and go and physically sit with the contractor and go through it. They will be surprised, hopefully delighted, and your success rate will go up.
Remember, competence gets you into a game that relationships win
So encourage your salespeople to go out and nurture existing relationships and build new ones. Guaranteed to pay dividends!