Construction Monkey

Construction Monkey Blog

As subcontractors, especially during tough economic times, sales is a tougher and tougher battle.  In the US there are approximately 800,000 specialty subcontractors, which means that whatever line of business you are in, there is a line of competitors for each every opportunity out there.  So how do you sell a job?

Low price becomes the quick and simple answer, since the economy has changed it is definetly a buyer's market and with that the lowest price wins.  That is the popular theory, but I beg to differ.  Given the economy, the price is no longer a differentiator, but is now a pre-qualifier.  What do I mean?  Well in 1999, if I wanted to break into a new market (either geographic or vertical segment), I could pull the price lever and at some point I would win the job.  If the market clearing price for a project was $1MM and I came in at $850k at some point the client was willing to utilize us for the work (given that there was no overwhelming issue with quality or performance) and during the good times no one was willing to meet this "low ball" number.  Once we completed a job or two in the market segment we became "experts" and then could win at the $1MM level.  I could differentiate the company's offering by price.

In today's world the competition and pricing is so aggressive that there is not a price lever anymore.  Anyone who wants the job, including the "experts", have pulled that lever several bailouts ago.  The prices are well below the $1MM and the "competitive" range is probably sitting closer to $725k.  So if you are not the "expert" you cannot offer a price advantage.  Does that mean you are screwed?  Not at all, but if definitely needs to change your mindset towards what you are really selling.  The tougher the economy gets the more I hear it is all about price.  I don't believe that, yes price is important, but is more like providing a bond (just a pre-qualifier) than it is a determiner in who wins the final award.

In the next part to this series I will explore what we are really selling, which is trust.  Above I mentioned, people become "experts" in their market and thus are invited to pursue and are awarded work.  I contend that there are not true "experts" in a market, but only the most trusted which then creates a perception of being an expert.

About the Author

Craig Pierce

Craig Pierce has been working in the construction industry for the past 25 years helping subcontractors master their trade. Currently he is President of Atalanta Enterprises which provides consulting services to contractors And software solutions through