Bidding Or Selling?

Posted on January 12, 2017

Written by small-business expert and author Michael Stone

Are you bidding on jobs, or are you selling them? There’s a difference.

Two Contractors On A RacetrackBidding is a race to the bottom. He who has the lowest price wins, or maybe he who has the lowest responsible price wins. Either way, the bidding process is all about price. In my opinion, getting involved in the bidding game is a bad idea. There isn’t any way you can win unless you’re the only bidder, and yes, that includes commercial work.

Selling, on the other hand, is showing a client that you can provide a service that meets their need. It’s primarily about the service you’ll provide, not the price of the job.

Many experts promote the idea of bidding jobs. Pick up any industry publication, and you will find articles about how to win bids, how to “sharpen your pencil” or how to cut your overhead so you can be more competitive.

Architects and designers frequently talk about getting three bids and encourage their clients to do just that. Why do they believe it’s in their customer’s best interest to pay the lowest possible price to either build or improve what is usually their biggest investment?

If you were facing a knee replacement, would you ask three doctors to bid on the surgery? I know, we don’t worry about price because the insurance company handles it all, but just imagine if payment came out of your pocket. Would you go with the lowest bid, or would you be more concerned with your surgeon’s competence and whether he or she will follow correct procedures, operate using the best equipment and have a high-quality support staff to help get the job done, even if the price is higher?

Since we expect all other professionals to focus on quality, value and service, why do we think we have to focus on being the lowest bid?

If you look at every lead as an opportunity to make a bid, your mind-set is going to be focused on price, and you’ll say or do things that keep your potential client focused on price. If you look at every lead as an opportunity to make a sale, your mind-set will be focused on what you have to offer to meet their need.

“Winning” a bid is seldom a win, especially if you then have to figure out how to build the job without losing money. Resolve today to focus on selling your jobs, not bidding them.


Michael Stone

MIchael Stone Headshot
Michael Stone

Michael Stone, author of Markup & Profit: A Contractor’s Guide, Revisited, Profitable Sales: A Contractor’s Guide; and the DVD class “Profitable Estimating,” has more than five decades of experience in the building and remodeling industry. Stone offers business management assistance to construction-related companies in the U.S. and Canada with books and training programs available on his website, as well as coaching and consulting services. He can be found on the web at www.markupandprofit.com and can be reached by email at michael@markupandprofit.com or by phone at 1-888-944-0044.


Sales Tips For Contractors

Special thanks to Tom Reber

Here are a few tips that contractors can use to win – and make the most of – more projects:

  • Don’t project your own feelings about money onto your customers.
    If you come to a final number for your quote and you think that it is higher than expected, don’t assume that your customer will feel the same way. Make the process more about value and less about dollars and cents.
  • Talk about money early on in the conversation.
    Have a straightforward, up-front conversation with your customers about what it’s going to take to get the job done right – along with a price range. This will help to get customers comfortable with your price from the beginning.
  • Be proud of your price.
    You’ve earned your knowledge and experience, and it’s worth a lot. Don’t devalue all of your hard work by selling yourself short on a bid.

Source: Sales Tips For Contractors, https://www.youtube.com/watch?v=6oDPnWapDZM