Guest Commentary

September/October 2009

How To Beat the Bidding Frenzy

Twenty-five ideas to help contractors get new work in this down economy

Joseph C. Hoffman Consultant

Joseph Hoffman is founder and president of www.jsbarclaymarketing.com. Hoffman has more than 30 years of experience in the industry and served as the senior marketing officer for a number of well-known construction management companies. He is active in a number of trade associations and served on the mayor of New York City’s Procurement Committee. He has a master’s degree from New York University.

As a contractor, you know how to make good money, especially if economic conditions were the same as in 2006 or 2007. However, today we are witnessing a different operating environment with respect to politics, the overall economy, competition, customer purchasing, corporate issues and materials and services pricing.

A key question is, given limited time and resources, where should you channel your efforts to obtain new business? Below are several marketing ideas that can generate new business for your company. Many are interrelated and more effective when done together.

> SWOT analysis. A strengths, weaknesses, opportunities and threats analysis provides a reality check and can help minimize your weaknesses and maximize your strengths.

> Meet with your clients more often. Get feedback and capitalize on those existing relationships. They are powerful. Ask your customers and friends, “Do you know anybody else that can use us?” It works.

> Take advantage of your brand. Use it for better positioning, connecting with your customers and promoting and focusing on what you do best.

> Develop, review and revise your strategic plan. Include any revisions or upgrades to services, contracting, marketing and so on.

> Increase the number of leads. Go mining. Work the Internet. There are many sites you may have never heard of that offer opportunities. Review government agencies’ capital budgets; they disclose projects and their cost estimates several months in advance. Retain a lead service such as Dodge Reports or others. They identify projects early and give you time to develop relationships and team partners.

> Attend local seminars, conferences and events. Be active in your associations. Go in with the goal of gathering important market intelligence and potential leads.

> Get more people involved in marketing. Everybody can contribute, whether it is uncovering a lead in a newspaper, recommending a friend or just being empowered. Social media marketing is growing. Major corporations and even the federal government are “tweeting.” Some of your employees may already be taking advantage of the new social media. Have them uncover opportunities.

> Try a different industry sector. Your specialized skills and trades may be applicable to other industries not yet served by your company. If you are strong in MEP, consider cable- or computer-systems installation. If you have constructed college dormitories, consider Army barracks. The key is to diversify and yet take advantage of your specialty.

> Contact facility-management firms. They contract out for construction. Provide a “quid pro quo” to maintain a good relationship.

> Increase teaming opportunities. Proactively reach out to potential partners and networks to increase opportunities and share risks.

> Introduce and promote value-added services. In these times, any source of revenue is valuable. Explore areas where clients will consider additional services. Some may produce additional revenue, such as service contracts.

> Have you considered education? K-12, colleges and universities have money to spend. How about private schools?

> Contact property owners. They typically rebid work every two years. Track their bidding cycles.

> Hire a business-development professional. Whether you hire a full-time or part-time in-house person or a consultant, make sure that he or she generates immediate sales activity. A sizable pipeline of qualified prospects from “low-hanging fruit” should be expected in less than a few months.

> Consider using customer-relationship management software. CRM will document your contacts, date of contact, result of the contact, planned actions and a plethora of other information. Make sure you monitor and measure progress against reasonable objectives.

> Explore new technologies. Many systems can enhance operations, provide better management information and help your company be more competitive. Try using building information modeling, enterprise software and CAD-based products for drawings.

> Get more people involved with the sales team. Have employees participate in business development by identifying leads and networking at professional conferences or seminars. Executives can purchase a lead service, update marketing materials, attend business-development meetings, measure performance, incentivize employees, provide training and participate on sales calls.

> Improve your proposal development process. Contractors who do mostly bid work do not have much experience in generating in-house proposals. Depending upon your direction and sales activity, consider retaining a proposal consultant but develop some “go/no-go” criteria to guide your proposal decisions.

> Measure performance. You do not have to wait for a signed contract to determine sales performance. As the saying goes, “you cannot manage what you cannot measure.”

> Get to know the federal government. It provides stimulus dollars, Dept. of Defense contracts, military-base closure-related contracts and institutional construction. Lawmakers have dedicated $135 billion for construction, with the largest percentage going to transportation projects. Can your company do transportation work, which often involves multiple trades? According to McGraw-Hill Construction, base closures and realignment budgets increased by 29% in 2008 and will increase by 18% in 2009.

> Seek out state and local government requests for proposals and bids. Develop or update your database of Websites for RFPs and bidding opportunities. Review each site at least weekly. Some sites will automatically e-mail selected opportunities based on your search criteria.

> Solicit political introductions, which can be powerful. Use your local representative for introductions. Before requesting the services of a politician, you must have a specific request. Know in advance the project of interest and the action desired. Focus on your local community and job retention. Sophisticated political constituents have been known to obtain favorable legislation or earmarks written on their behalf.

> Consider going after task-order or on-call contracts. Team with engineering or pure construction management firms. Typically, on-call contracts involve professionals to work at the client’s site as an extension of staff. In doing so, you receive a multiplier, obtain steady profit and retain quality staff without management overhead cost. The name of the game is providing technical resources and specialized skills on an as-needed basis.

> Do not waste money on a Website now— do it later. You are better off focusing on business development. A Website is like a glorified brochure, and while I do believe in them, you will probably need some serious search engine optimization to go with it.

> Develop a sound contingency plan. Consider a fallback position should your plans not work. The recession will not last forever, and you may have the resources and existing business to ride it out.