From Bid Chaser to First Choice: Why Trade Contractors Should Spend More Time on Business Development

Commercial subcontractors often don’t think a lot about their sales and marketing functions. They mistakenly think it isn’t important because jobs are won via of bids, they view estimating and bidding as their sales functions. While this is partially true, the best trade contractors understand that building their network and reputation is critical. 

Often contractors are doing traditional sales and marketing activities and they don’t even know it because the language is not the same in construction as it is in most of the business world due to the unique “bid and wait” process of getting work. 

Let’s start with the #1 myth I see in construction is “My brand doesn’t matter. The contractor who has the lowest bid always wins regardless of the name of the company.” 

Branding

The main reason for this confusion is that marketing companies have distorted brand to mean abstract things like how “good” your logo is, how much “awareness” you have in the marketplace and a lot of other things that are not quantifiable because that helps them sell more logo redesigns. However, your brand in construction is really simple. 

Brand = consistency of execution over time 

In other words, it’s your reputation. Full stop. 

In my experience over the last few decades, one of the handful of core reasons trade companies die is they stop getting work because they burn their reputation by inconsistent execution. 

There are many reasons why this happens, but most commonly it’s because they accept work that they have no hope of completing on time. It’s too capital intensive for them, they are slow so they accept work outside of their normal scope of work thinking they will “figure it out” or they fail to think about how this job fits into their current schedule. 

This is why having your operations in order is so critical. This is why learning the business of your trade is as important as learning your trade. In construction operations dictates everything from your profitability to your brand in the market. 

Business Development

While it is true that commercial construction companies don’t do marketing in a traditional sense of running ads since they are not hired by owners, that doesn’t mean making sure people know your brand (reputation) isn’t important. 

Business development is the middle ground between sales and marketing. The goal of business development is the same as marketing – it is to make your ideal client (In this case, GCs) aware of your existence and reputation. But unlike marketing it is done on a more “one to one” basis like sales vs  “one to many” basis like marketing – it is commonly called “networking” but it is networking with a targeted purpose. 

General contractors who prefer lowest qualified bid work will often have a roster of subcontractors that they prefer to or want to work with. While they often post their jobs on websites like BuildingConnected, they also will directly reach out to subs that they know or have heard do work (reputation). In baseball, the tie goes to the runner and in construction contractors who have good reputations are the runners. 

This is why it is important to have someone in your organization in charge of business development. Early on this should be an owner or an executive, but as you get larger PMs or a dedicated business development person should take on the responsibility as well. 

Good business development is very similar to networking. It is making sure you build a lot of touchpoints and a relationship with the people who ultimately give you work. Associations are a great place to start this process.

Associations create events specifically for the purpose of GCs and Subs to meet each other. In the past this was mainly quarterly and yearly conferences but in recent years they have started doing monthly “speed dating” events between GCs and Subs. If you are just starting out, you as the owner should make these events a priority. As you get larger you just need to make sure you have a good representative of your company there. 

Good business development reps also make a point to go on a lot of “coffee dates” – they make sure they are not eating lunch alone, know where the local happy hours contractors, architects and engineers frequent and they spend a lot of time there and on the phone/zoom. If you make these activities a priority, you will be surprised how often in 6-12 months you will be getting additional “leads” for jobs because you were recommended by people you met once or twice. 

The reason that this happens is because “shit happens” in construction. Project Managers at GCs are often required to get 3 or more bids for each trade on a job. Sometimes their go-to subs are busy when a new job comes up – so what do they do?

They call people in the industry that they know and ask them for referrals of subcontractors to reach out to. If you have been putting in your business development work, you are going to be top of mind for a lot of those referrers.