Validation

We are consistently working with clients to move out of the lowest-bidder mentality. I know the A/E/C (Architect/Engineering/Construction) industry is riddled with lowest bid RFPs, but it can be done. I recently read an article on BNET.com that discussed two of the main factors we discuss about getting out of low bid.

#1 Position – If you’re company is positioned at the bottom, the only thing you can compete on is price. Usually your price is lower because your quality is worse or you lack the experience needed to charge more. If you’re the right company for the job and have a portfolio full of similar projects, then you should charge more than an upstart with little to no experience. You must position yourself as the right choice because you have a track record of dependability, the experience to know your bid is correct, and you should be able to compete better on time because of your expertise and efficiency. In particular, if a company can make money the day they open then completing a project a month earlier is a strong quality, much stronger than price.

#2 Differentiate – This also goes for all industries, but is usually forgotten about in the A/E/C industry. You must separate your company from other companies otherwise you will be lumped in with everyone else. Once you’re lumped in with the other companies, the only difference is your name and your price. What makes your company different – expertise, proven record, niche market, engineering staff, location, team, etc?

Next time you write that RFP, think to yourself if you’re better than the other companies you’re competing with on the same RFP. Ask yourself, “How do we stand out?” Then ask, “How much does that cost?”

People see value in higher prices. Think about it. If I told you I could build you a website for $5,000 or $20,000; which would be a website? Which would have a better ROI? If I don’t explain to you the difference than the obvious choice is the lesser amount. If I guarantee you the most expensive option will convert into more sales, be done faster, take less effort on your part, and look better than what is your choice now? People still have budgets, but I would rather design & develop 5 $20,000 websites than 20 $5,000 websites. Even if I lose a few more bids on price, the ones I get are worth much more.

I love asking this question, would you rather more clients & more money or less clients & more money?