If you aren’t first, you’re last.
According to Will Ferrell, that is.
For contractors, though, that little bit of wisdom may not be the case. In fact, in many scenarios, if you’re last, you end up first.
Bidding on projects is one of the most time consuming aspects of being a contractor. You have to get a feel for the client and qualify them on the first call, then go on site for an estimate (usually free). The on site time could take a couple hours, calculating the price could take a couple hours, then you have to sell it. Often projects won’t sell at the first appointment, so you’ll need to invest more time into the customer and the project – that you might not even get.
However, one thing that I’ve noticed over the years in the bidding process is that the contractor that bids on the project last often ends up being the one who secures the contract.
Here’s how you can be the last bidder on every project and why it pays.
The Traditional Thought Process
As a contractor, it’s important that you know what’s going through a client’s mind in the bidding process.
The conventional knowledge that almost every customer hears is that they should get a minimum of three bids on a project.
They don’t have a comparison cost like they have when they’re buying a car, they don’t know very much about the process or how much work is involved, and they want to make sure that they’re paying a fair price.
Unfortunately, this has an interesting side effect.
Side Effect of the Three Bid Rule
A customer wanting to get multiple bids on a project is all well and good. Nobody can blame them for wanting to get the best price possible on their project.
However, this rule has had an unintentional side effect.
When people call up contractors to get them to come out for a bid on the project, they almost always find that they can’t get a contractor out to bid on their project for three or four weeks.
So, why is that?
The reason is that there are basically no benefits for a contractor to be the first one out to a job. Since people have been conditioned to get at least three bids on their project, they’re not just going to go with you since you were the first one out to the project.
They feel strongly that they still need to talk to those other two contractors with which they set up a bid appointment.
At this point, they haven’t spoken to anyone else, they haven’t seen any other prices, and you have to be the first one to put a price out there.
Due to this, there’s actually more of a benefit to you being the last contractor in the bidding process.
So, What’s the Advantage?
There are actually several benefits to you going last in the bidding process. The first is that the customer is starting to get antsy.
Since no contractor wants to be the first one out to bid on the project, the customer has been waiting three or four weeks to get this done. By the time the month has passed, they’re frustrated about how long the process has taken and feel like they’re being strung out by the other companies that they’ve talked to.
Now that they’ve talked to two other companies and gotten their bids, you can then afford to be much more nitpicky about everything. You can look through the other two bids, and you can walk through them with the customer to tell them about what they’re not including, they’re bad reviews online, or anything else that you may find relevant.
After talking through those bids with the customer and pointing out the problems with the other two companies, they’re likely starting to get even more frustrated and just want to get started with a reliable company.
That’s when you tell them your bid and that you’re ready to get started as soon as possible.
However, you can’t always be the last bidder.
If You End Up First
With all that said, you just aren’t going to be able to be the last bidder on every single project.
And that’s ok.
I’m not one who likes to string the customer out, and I’m not afraid to be the first bidder out on a project if I have to be.
There’s no time like the present. So, in the event that you are the first bidder out on a project, you should start thinking about ways that you can still be the last company that the customer talks to before they make their decision.
First, they’re going to tell you that they still need to talk to a couple of other contractors before they make their decision. The best thing that you can do here is to empathize with them. Let them know that you’re happy that they’re talking to other bidders first because you would want to do the same thing if you were in their shoes.
“If I were about to spend this much on a project I’d want to talk with a few contractors as well. Here’s my card. After you chat with them, give me a call and I’d be more than happy to come back out and go back over everything with you.”
However, you should also find a way to invite yourself back out so that you can be the last bidder that they talk to. Tell them that they can call you after they talk to the other contractors, and tell them that you would be happy to come back out to the site again before they make their decision. If you’ve given them your card, it’s likely that they’ll end up calling you again before they make their final choice. This way, you can requalify them. You can ask them who else bid on the project, what they’re including, and what their prices are.
If you think that you can compete with the other bidders, it’s your chance to convince the customer that they should work with you, and schedule another appointment with the customer. If you can’t compete with the other bidders, at least you had your chance!
Being the last bidder on a project certainly has its advantages. However, it isn’t the end of the world if you end up as the first bidder. Although a lot of contractors kind of give up on a project if they end up as the first bidder there, it doesn’t have to be that way. Find a way to end up as the last person that your customer talks to, and go from there.
What do you think?
Let us know what your experience has been as a contractor bidding on projects in the comments section below!