Eliminate the Word “Bid” from Your Vocabulary
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I get nauseous every time I hear that word. In the scheme of things, a bidding mentality is probably the biggest obstacle to the long-term success of any remodeling business. In a bid situation, you essentially have to be the loser to win the job. Think about that next time you say (or hear someone else say), “I ‘won’ the bid.”
When you tell a prospect you will put together a “bid” for their project, you are essentially encouraging the prospect to collect other bids. You are now competing in a price game. Chances are, the prospect is specifying the project and the solution, and the assumption is that your bid and all the other bids are “apples to apples.”
Nothing is ever apples to apples – unless, of course, the prospect shares your proposal with the other bidders…
Some prospects ask for a bid. This should be a hint of either their intentions or their perspective about the process for choosing a remodeler. Selecting a remodeler solely based on price almost never has a good outcome. Most remodelers know this, but they still participate in this process, thereby promoting it. It boggles me. It’s the equivalent of saying to yourself: “I know this almost never works, but I’ll try it again and see what happens.” When the situation breaks down in the middle of the project, both the customer and you rationalize why failure was the other party’s fault.
Want to further increase the likelihood that your bid will fail? I suggest that you also do the following:
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Never present your “bid” live. Just mail, fax, or e-mail it to the homeowner.
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Include separate pricing for all five options discussed during your 20-minute visit.
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Provide as much detail as possible in your “bid package” so the homeowner can pass your specifications along to other remodelers who will also submit a bid.
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Itemize the cost of everything, and provide a microscope so the homeowner can really scrutinize prices.
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Include free plans ready for permit application.
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After sending out your bid package, wait for the homeowner to call you back to arrange a time that you can pick up their deposit check.
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Keep track of the total dollar value of all bids you did not win. That way, you will know how much money you didn’t lose.
Did I miss any?
Shawn McCadden founded, operated, and sold a successful design/build company. A co-founder of the Residential Design/Build Institute and former director of educaton for a national K&B remodeling franchise, Shawn writes a monthly column for this magazine, speaks at industry events, and consults with remodeling companies. Email him at shawnm@charter.net.
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