How to Win Bids Over Lower-Priced Competitors
No matter the niche, all contractors experience losing a job to a lower bid. It’s frustrating, especially if you know your competitor has a rotten reputation. But it’s a problem that’s been around forever. So, what can you do about beating lower-priced competitors without lowering your rates or your standards?
First off, really get to know your prospect. Understand their needs, wants and top priorities. The industry is what you know best – you can relate to homeowners and really level with them. The better you understand the clients, the better your suggestions for their living space will be.
I had my house painted recently and the bid came in 60% lower than the other bids. I took the bait because it’s human nature to want to save money. I’m not experienced in house painting, so I didn’t know what kinds of questions to ask to ensure the job was done right – and on time.
Here’s what I got for that low-ball bid:
It took him 2 months to paint the interior rooms of my 1,700 square-foot house. He used low-quality paint so he had to paint multiple coats, which cost more money. He over-sprayed my windows and window frames and didn’t clean it up. He also over-sprayed my ceilings, which meant I had to paint the ceilings as well. He removed all smoke detectors, phone plates, electrical outlets and vents, but didn’t reconnect any of it after the job was done. I’m still sorting through nuts and bolts trying to figure out what goes where and I’m left with wires hanging out of the walls where light fixtures were removed but never replaced.
Now that I’ve been burned, I’ve learned. Now I know the right questions to ask – a little too late. Had one of the higher-bidding contractors taken the time to really understand my needs, I most likely would have trusted them more with the job. What I valued was neatly painted walls, a one-week job, and all fixtures replaced at the end. They then would have had the opportunity to help me understand that based on my values, that level of service would cost more money.
These are the types of questions you can ask to help a potential client better understand the process, problems they could run into, and what outcomes would be unacceptable. Though my questions are paint-related, any contractor can tweak them to fit their niche:
- Do you have any time constraints? Are you concerned about the length of time it will take to complete the job?
Are you concerned abou the quality of paint (how it looks on your walls and the lifespan of the product) your contractor uses? - Do you value neatness of work?
- Are you concerned about over-spraying?
- Is it important that your contractor remove fixtures rather than tape around them?
- If light fixtures are removed, is it important that your contractor reconnect the wiring and fixtures so you can actually enjoy your newly painted walls?
- Is it important that your contractor has lien and liability protection?
These are but a few questions you can ask to understand what the homeowner values. Once you have this information, ask them how the low bidder will meet their needs and deliver the quality of service they value.
Suggest to your prospect that they go back to the other bidder with a list of expectations to be included in the signed contract.
Just by showing that you care and taking the time to understand their needs will most likely land you the job. It will get them thinking because you’re teaching them things to think about – remember, you’re the expert, not them. They don’t know what questions to ask or what sort of problems can arise.
If they don’t hire you right on the spot, they’ll most likely hire you after the lower-bid contractor refuses to put into writing any references about guaranteed satisfaction or job time-lines.
When you play smarter and really get to know your prospects by asking key questions, you’ll start taking away more business from low-bidding competitors.
Tags: bids, competition, leads, low-priced bids