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Sunday, May 13, 2007

Finding and keeping good subs

Michael Stone's Markup and Profit blog has a useful entry on finding and keeping good subs.

I especially appreciate his observation about honoring the sub that provides a quote on a successful job, with the work, and not bid shopping (while respecting a sub's legitimate request for a price increase when warranted.)

Always be fair. If a situation comes up that is not in your sub-contractor agreement, err on the side of fairness to the sub. Remember, they have families and a business to take care of just like you do. Trying to chisel a sub out of a dime is going to cost you dollars in the long run. Many general contractor’s never figure that one out, and wonder why they can’t find and keep good subs.

Here is an idea that I used almost from the start of my career in sales in 1969. If I asked a sub to give me a quote on a job, and they did, if I got the job, they got the job. I didn’t shop them around; I didn’t get three bids on each job. If they helped me put an estimate and proposal together, they got the work. I had many of my subs that went back 5, 10, 15 years and more with me. My roofer went back over 30 years. Once a job was quoted, I expected the price to hold for that job. But my subs knew me well enough to know that they could come and tell me about price increases at any time. If they needed to quote a higher price for the next job based on a legitimate price increase, that was okay. I never fussed at them over prices. It is a fact of life that if their price goes up, yours goes up. Now if a sub started running the price of their work up for unnecessary reasons, I made sure I knew my numbers well enough that I could call them on it. Running prices up just to try and get more money out of me got them a one-way pass out of the relationship.

What does this have to do with marketing? Within reason, I believe that the way you treat your subs reflect on how clients treat you. If you are able to build the chemistry of trust and mutual respect within your supply chain, projects will proceed better, and you'll receive more repeat and referral business -- and that is always the best kind of marketing in this industry.

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