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. (more…)

I recently read this blog about soliciting bids in the midst of our current “housing bubble.” The article advised homeowners against low-balling when examining contractors’ bids for their work. It reminded me of where I was working when the housing boom finally started to go flat. At the time I was working in southern Oregon. It was a hotbed for new construction during the boom as retirees and newlyweds flooded the area, known worldwide for its landscape and moderate climate.

The town also flooded with contractors. Anyone with a hammer and a pick-up truck was in the business. But when things started to collapse (last I heard the number of homes on the market was up roughly 1000 percent), many contractors were left holding their hammers. That’s when the undercutting started. Bids dropped like Wile E. Coyote off a cliff.

Suddenly we were losing work, right out from under our noses, because everyone was trying to cut costs. For a time, quality of work gave way to quantity of work, often awarded to the lowest bidder. Not surprising, this only complicated things. Just a few months later we found ourselves being hired to finish work left incomplete by low-balling contractors who were either fired or just disappeared.

The moral of the story here is that underhanded bidding is not only unfair but unhealthy as well. Unhealthy for business, unhealthy for everyone involved. Even in a time of recession, the traditional rules of bidding still apply and contracts are not won, nor is work retained, simply through low bids. (more…)