Contractors have often approached project bidding by offering the lowest possible cost. But as the bidding process becomes increasingly complex, it’s important to know how to win construction bid contracts and improve your bid-hit ratio while staying profitable.
Bidding low isn’t the same thing as bidding competitively. And increasing your bidding volume without changing your approach only leads to wasted time and money.
Check out these nine tips for winning more construction bids with fewer proposals.
Bid first and know your competition
An easy way to get more construction bids is stepping in before your competition does. Keep an eye on construction bidding marketplaces to create a profile and preemptively find jobs.
- BidClerk– This site provides commercial construction leads and project information.
- iSqFt– A networking tool, iSqFt is specially designed to help construction professionals connect and communicate.
- BidPlanroom– Commercial construction professionals use this site to join a bidder’s list, post projects and promote their company. (It’s free!)
When preparing to bid on a project, know what criteria your competition will use so you can bring more to the table. This means making your offer about more than just price. Essentially, you need to sell the fact that your services are better.
Don’t chase every job
Just because a construction job is available doesn’t mean you should go for it. You’re better off taking the time to carefully craft a proposal for five projects you’re well suited for than 20 you aren’t.
Reducing the number of proposals you submit and improving their quality can actually be more effective in the long run.
Follow these tips for selecting projects with a higher chance of success:
- Bid on jobs that fit your niche.Figure out what you do best and stick with it.
- Focus on projects that will result in repeat business. Retaining an existing customer is much easier than finding a new one.
- If a project requires specialties you don’t have, don’t bid. You’ll either waste your time or end up with a project you can’t execute very well.
Identify the decision-makers and build trust
Contractors often waste precious time by working with people who don’t have any say in the final decision.
Find out the key decision-makers involved with the project, so you know who to prioritize. A good way to start this is by gaining an understanding of the prospect’s organizational structure.
Once you’ve identified the decision-makers, try to get as much time with them as you can. People want to do business with someone they trust, and they can’t trust you if they don’t know you.
Building personal relationships with your prospects helps them see you as a person and not just another contractor.
Highlight your qualifications and deliver value
Don’t be afraid to show off your qualifications when you’re writing your proposal. Be straightforward in explaining why your team is right for the job.
Showcasing your experience is a great way to set yourself apart from other companies. When your bid is close to someone else’s, a good reputation may be all it takes to tilt the scale in your favor.
Also, promote your value rather than focusing so much on price. Competing on cost alone is a race to the bottom.
Sharing your unique value is the best way to differentiate yourself from the competitors. Market your crew as responsive experts who offer customization, quality control and excellent customer service.
Do your homework, break down your bid and explain ROI
When submitting a bid, it’s extremely important to know what project owners expect. This is especially true for design details.
A helpful tactic involves talking to others who have worked with the project owners to get a feel for their preferences.
Avoid merely showing a lump sum in your bid. Break down the cost to best highlight your thought process in areas like equipment allocation and material costs. It’s all about giving a potential client the right perspective.
Additionally, prospects need to see the return on investment (ROI) they’ll gain by working with you. Be prepared to back up your information with hard data. Breaking down the data through case studies is a helpful method.
Embrace technology to boost productivity
Contractors often assume they lost a bid to a competitor that came in below cost. But how do you lower costs without compromising quality?
The answer is increasing your team’s productivity.
By boosting productivity, you can reduce labor costs and deliver projects faster. Both of these factors make your bid more compelling to project owners.
Additionally, if you finish projects faster, you can complete more projects. While you should still seek to improve your bid-hit ratio, simply increasing the number of projects you’re able to bid on will help you get more construction bids.
There are many ways you can boost construction productivity, such as:
- Adopting construction productivity software
- Partnering with a distributor who can help you manage materials more efficiently
- Using prefabrication to prepare materials in a controlled, off-site environment
- Improving safety training and awareness
The right technology can help control construction costs and has the power to increase your team’s efficiency with common job site tasks, including trips to gather material.
It can also improve communication between the field, office, operators, subcontractors and executive team. Mobile apps allow you to manage communication and projects wherever you are.
Here are some helpful mobile apps for construction that you should know about:
- Fieldlens– This helps improve project communication between a general contractor, subcontractor, architect and owner. You can document job issues with photos and keep track of to-dos.
- PlanGrid– A tool that instantly updates an entire team when there are changes made to any documents.
- HeavyJob– Not only does this app provide time entry functions, but real-time data on production levels.
- Autodesk BIM 360– This program is great for highlighting safety and quality issues as well as managing field data.
Approach objections as opportunities
Don’t worry if your prospect has questions or concerns at some point in the bidding process. Try to understand the true root of any objections they raise so you can better connect with them.
If you approach it in the right way, persistence is good for the bidding process. Staying in touch with potential clients and being consistent could help increase your close rate.
Sometimes it’s even helpful to point out what a competitor did well with their presentation, highlighting aspects like cost and timing.
Demonstrating consistent care and attention to detail for a project shows dedication — something project owners like to see.
Track your bid-hit ratio and set goals
Getting more construction bids is a gradual process. By tracking your bid-hit ratio over time, you can measure your progress and see what’s working.
Your bid-hit ratio helps you see the overall success of your bidding efforts. You can look at your bid-hit ratio over the past quarter or year to get a pulse on your bidding process and set goals for the future.
Numbers aren’t the only thing worth tracking. Make note of what you did differently in each project that helped you win the bid. Over time, you’ll learn which strategies are most influential.
You’ll also want to pay attention to what types of projects you frequently win. This will help you identify your niche and discover what types of projects you excel at.
If you see your company as a commercial contractor but find you’re winning more residential bids, for example, you can adjust how you market yourself and what you bid on.
Be willing to shift focus
Finally, adapting to changes in the industry or economy can help you stay competitive and resilient during difficult times.
During the COVID-19 pandemic, for example, residential construction boomed while commercial construction fell. Contractors who typically bid on commercial jobs saw an opportunity to shift their focus to where the demand was strongest.
While you don’t want to stray too far outside of your niche of expertise, responding to shifts in the industry allows you to diversify your experience and opportunities.
How to win construction bid contracts: Have confidence
Today’s construction bidding environment is competitive and complex. Applying the tips above can help give you a leg up when it comes to winning projects.
Have confidence in your people and services — and focus on building a foundation of improved speed and accuracy.
This article was originally published on August 20, 2018. It was updated and republished on March 24, 2021.