Are you wasting your time?

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red fkag

Michael Stone recently published a blog posting you should read if your business serves residential clients — describing red flags that signal the original lead won’t turn into a sale.

These include:

  • One partner/spouse wishes to meet but makes it clear that the other spouse won’t be there;
  • “Please email me your quote” — in other words, don’t bother showing up in person to explain your quote; and
  • The potential clients can’t/won’t set an overall budget for the work.

Stone provides some suggestions on how to work around these objections and the rare situations where you might allow one of the rules to be broken (and the exceptions are, indeed, rare).

This advice undoubtedly is helpful for residential contractors. But what about ICI jobs, where the quote/RFP response process can require significant budget, effort, and energy.  It is one thing to cost out a residential renovation job — it is quite another to submit on a multi-million dollar building.

Most successful AEC businesses/practitioners implement strong “go-no go” rules on business development/RFP opportunities. The opportunity cost of wasting time on low-probability proposals is far too great to just throw the bidding/marketing energy to the wind. As a rule, the most important criteria include whether key people in your organization have a personal relationship/experience with the decision-makers at the receiving end, and you have some exceptional knowledge or experience assets to allow your proposal to stand out from the crowd.

Sure, some public sector “cattle call” opportunities can be won by the low bid in an open competition, but realistically, unless you have some special knowledge or edge, your margin on these projects will be absurdly low. (And sometimes the seemingly open competitions are rigged — I’ve heard stories from contractors on the inside who describe how the competition is structured to appear above-board, but the insider knowledge allows them to bid low and still be profitable through pre-arranged private change orders.) As well, in the US, remember the Brooks Act allows for plenty of subjectivity and consideration of previous experience/existing relationships for public sector work.

If you don’t have any experience in setting up your go/no-go system, you may find value in Matt Handal’s Proposal Management Mastery course.

Time spent setting out rules and key criteria for sales and RFP follow-up will save you frustration and waste. Make sure you have rules in place, and only deviate from them in the rarest of circumstances.

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