Construction Project Bidding: How to Determine What Price To Charge

Construction Project Bidding: How to Determine What Price To Charge

For anyone who has done sales before, the big question when it comes to their business is: How do I price my services and how to I relay the benefits of those services to my customers so they will pay for them? For someone selling goods, the price is not so complex – you buy or manufacture a product and it costs x; you have y costs that you have to factor in, and then you have to just factor in your profit margin (usually 30% minimum). Additionally, the sales process is generally easier because there is a tangible element, and the goods can be seen, felt and touched.

However, for a service, you are selling yourself or your staff, and how much is that really worth? From my experience in the service industry, it’s so important that you don’t undervalue your services. You only have so much time that you can spend with people, and time is extremely limited, so this must be taken into account. In order to be competitive in your service industry, you need maximum conversion rates, maximum retention rates from clients, and services priced to make money while remaining competitive. Therefore, the initial sales appointment becomes the focus of the sales process. So here it is – the process to I recommend you follow for your service business:

1. Always pre-qualify your leads
Prior to meeting with the prospect, you need to pre-qualify the prospects. Generally the pre-qualification is going to differ across industries. However, the key aspects that you want to ensure that you address in the initial phone call with the prospect is that, firstly they can afford your services (tell them a budget per month), secondly, that the decision maker is present at the appointment, and thirdly, that you want will ask them to make a decision.

There may be other areas that you need to pre-qualify before the prospects come into the initial appointment, however generally these three will suffice. The key strategy and reason behind the pre-qualification script is to ensure that you address objections to your service before they happen, and that you are looking for a decision at the time of the sales appointment. So if you find you are getting a regular objection when you are trying to close, for example, “I just need to check with my husband,” then your pre-qualification should be asking, “Is there anyone that will be involved in the decision making process with you?” If they say yes, then you should always schedule a time when they are both available.

2. Build common ground with the prospect
Before you begin to start to sell, you need to find common ground with the prospect. In other words, you need to spend the time to develop rapport with the prospect. This relaxes the prospect, and they are more likely to trust you. In other words, this puts their guard down, as most people come in to sales appointments with an element of apprehensiveness.

3. Define and establish their goals
This is really where you want to spend the time – to define and establish the goals of the prospects and their needs. Ultimately, this is probably where most of the sales consultation should be spent, because you really want to come to an understanding of the prospect, but also for the prospect to understand their own pain or not fulfilling their goals or needs. It’s best to have some preset questions to follow during this period, and this is where you put your doctor’s cap on. In other words, you are asking the questions so that you can present the solutions. Additionally, this is where you gain the power in the sale.

4. Build the problem
Once you have decided what their goals and needs are, then you really need to build the problem and even repeat back what they have just told you. This is a really short part of the sales process and is as simple as saying, “From what you have told me you….” From there you need to diagnose the problem by reiterating the true cause of their problem.

Here is an example for a physiotherapy practice:
“From what you have told me, you struggle to get out of bed, bend down and pick things up, and drive long distances. Generally a cause of the pain that you are experiencing is either poor flexibility or core strength, so let me show you how we can work on getting rid of that pain.”

5. Present the solution
The example above leads straight into a perfect scenario where you can go on and present the solution that you have to offer. As I said at the beginning of this post, the service industry needs client retention, so your solution (and this will depend on the industry) should include options to give the prospect slightly discounted (no more than 10%) solutions, to ensure they are locked in long term, and also to assist you with your cash flow. However, generally, these are also better for the client as well.

For our physiotherapy example you know that it’s going to take at least 5 or 10 consults to see improvement; therefore you should encourage the client to commit to that so they can see the results. If they just come to you for one session, you know that they are not going to get anywhere. In other words, you are doing them a service by recommending committing long term. Additionally, your solution needs to demonstrate how it is going to help the prospect to achieve their outlined needs and goals.

6. Close
If you have done all the other steps of this process, then the close should be as simple as, “How would you like to pay for that?” The key thing with the close is that you want to ensure that you make the sale there and they pay for it. So many sales are lost because the client goes away and “thinks about it.” If you receive that sort of comment, then you can refer back to the pre-qualification script, and find out the real reason that the person wants to think about it. Is it cost? Is it talking to someone? Generally you have either addressed their objection in the pre-qualification script or it needs to get added into your script so it doesn’t happen again.

This process is designed to weed out the bad prospects before they get to the consult so they don’t waste your time. This will also increase your sales rate, because you are getting the sale straight away and they are committing. Additionally, you are pushing long term commitments so they are likely to stay with you for longer.

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