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Wednesday, July 30, 2008

Getting started

Construction at the University of Central Florida in Orlando appears to have a a bright future with rising enrollment, even in the current housing slump. This image is of the new recreational centre under construction. Trouble is, for local contractors seeking work, is that price competition is intense and brutal.

Here is another question received in response to: "What is your number one construction marketing concern?"

Q. We are a young company and have just really gotten started in the last four months (we’ve existed on paper for two years). Our focus is commercial construction, specifically retail construction in Central Florida. Our largest challenge is getting clients and jobs. The jobs we learn of are generally from reporting agencies like McGraw Hill, Construction Data, etc, so we always have a fair amount of competition when submitting a bid. It’s a rough in the hard bid world. Any ideas?

We’ve been trying to grow relationships with one on one office visits, lunches, and cold calls with prospective clients too. We’ve had some success with this approach, but we just can’t seem land jobs with such heavy price competition. How do we overcome this?

Clearly, when you are responding to public projects, openly advertised (and available to the commercial leads services), you are going to be facing intense price competition -- especially in a depressed market. The problem is that the only way around the price competition is either exceptional specialization or exceptional branding, or both -- and the branding I am talking about is reputational, not superficial.

You know you have achieved success when clients call you back for more, and/or refer colleagues to you. So the first place I would go looking for business is among people you really know and who truly respect you from previous projects, perhaps at your former employers (however of course you must not do this if you would violate contractural agreements or the like).

Another approach to consider is to define your niche -- you must be quite specific here -- and then look at ways you can focus your marketing message upstream within that niche. Say, you are confident you can build schools well -- you would want to join the relevant associations/chapters for your sector. The wider and bigger the sector/market, the less this approach will 'work' simply because your entrenched competitors are likely to already be there.

This gets into the Unique Selling Proposition concept of marketing. If you are not number one (or number two) in your segment, you are not going to command attention -- so, again, you will be among the crowd bidding work on price! If you really are first in the space, you can 'own' it. In business, an excessively narrow niche may not be viable to support your entire enterprise, but it may give you some power and identification and draw out useful business.

In other words, from a marketing perspective, if you cannot draw on your existing relationships/reputation, you will need to dare to be different, to be focused, and to specialize in a visibly unique area -- and then you can command higher prices, which will be augmented as your reputation grows. Remember, your unique area can be geographically defined, by sector or specialization, or by something else. It simply has to be unique and relevant to your business (and your potential clients' real interests and emotions.)

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