Talk Profit, not Price, To Win Builders’ Business
Stop concentrating on sales and focus on how you can help the builder make money.
ProSales
This is the fourth in a series of columns on upselling and sales techniques by Rick Davis, a trainer in the construction products industry who also writes the Sell Sheet column for ProSales Magazine.
“Got anything coming up I can bid on?”
Yes, this is the exact phrasing that builders hear consistently to the point they no longer want another bid or phone call. Salespeople complain that builders are only interested in price without realizing they are to blame. If you are only bidding and the extent of your value promise is little more than the best “service and value,” then how can you expect a builder to differentiate your offer?
As long as you continue to “bid and pray,” you will fall victim to price negotiations. The only path to upselling and margin enhancement is to shift the dialogue from price to profits for the builder.
Realize that builders don’t actually build houses for a living. Builders sell houses for a living and your job is to help in that endeavor. The successful salesperson gains a deep understanding of the builder’s business model in order to help facilitate the growth of profits…for the builder.
Your sales goal is to differentiate yourself from the professional “bidders” by tapping into the builder’s real concerns. This is the secret to margin enhancement and upselling.
Stop Bidding, Start Proposing
A bid includes a price, the listing of products, and sometimes payment terms. This is the information your competitors and you supply builders on a regular basis. A proposal is much more. Here are the components I recommend you use to craft a compelling proposal:
Observations—Use bullet points to inform builders that you’ve tapped into their general concerns. If a builder tells you he is frustrated by change orders from homeowners, write it down. If you hear that labor costs are a problem, write it down. If the builder tells you he “can’t stand people who don’t keep their word,” write it down!
You may feel unable to help with some of these issues, but that’s okay. Your goal is to establish credibility as a consultative sales leader. Believe it or not, you will eventually have ideas to help. These will have little to do with the products you offer, but everything to do with the credibility you establish.
Objectives—List the target audience for the builder, the type of structure, whether the project is pre-sold or speculative, and so forth. Builders don’t build as a hobby; there is a profit incentive for every project. Tap into that and you’ll instinctively discover ways to match the right product, often the upsell option, with the right project.
Specifications—Itemize the products you offer, including quantities and specification details. The problems you have after the delivery are usually because details weren’t clarified before the delivery.
If you have recommendations for products that the builder should introduce to a client as an upsell option, this is the place to do it! Help the builder see how a specific product enhances the building and, more importantly, his profit margins. If a hardwood species can be included on a window for the home office to match the cherry wainscoting, suggest it as an option. If a synthetic slate roof will distinguish the architecture of the home, include it as an option.
Putting extensive detail in this section demonstrates your professionalism, clarifies expectations, avoids problems after the sale, and gives your builder product options he can share with his homeowner client. Most importantly, such specificity enhances your credibility with the builder.
Schedule—Outline your understanding of the project schedule, from groundbreaking to completion. This allows you to tell the builder when an order should be placed and their role in the proper scheduling of deliveries. You might be surprised how well this section works, not only as insurance for you as a supplier, but as a planning tool for your builders that they will respect.
Price—Spell out the costs in the manner your builder requested, whether that’s an itemized list of all products, or a single project price. Also include the investment in upsell options (along with a comment about the increased profits the builder should expect from the upsell.) Your list of products in the specification section protects you from excessive liability and enables you to offer the price in the builder’s language in this section.
You might think this is overly professional for the builders in your market. You may believe they won’t give you the time to properly present your proposal, or even read it. You may believe there isn’t enough time in your day to craft such a detailed proposal.
Before you say it’s too much work in your short day, try it. It’s better than sending out a bunch of blind bids to ungrateful and uninterested builders. You might gain sales in the process and, most importantly, increase your margins through the upsell.
More from ProSales:
Tips for Selling to Big Volume Builders
