Contractor’s Corner: Selling the commercial buyer – April 2024

By Dave Stafford

You’ve already done the hard part of prospecting and found a willing buyer, so how do you actually close the sale? Oftentimes, that’s where commercial sales personnel fall short, expecting lightning to strike and automatically give them the order. Most of the time, you have to ask for the order, give them a push to get it or find a way to separate your offer from the competition’s. Sales are usually lost through inaction rather than inability or lack of competence. Based on my experiences (and mistakes), here are ways to prepare.

CLOSING MAINSTREET SALES
The mainstreet buyer is often the easiest to close because there are few regulations or restrictions in getting their order, provided the buyer has the authority to commit the money. The single biggest mistake is to make a golden presentation to a person without decision-making authority. A key question to ask is, “Harry, is there anyone else other than you who needs to be involved in the decision to make this purchase?” Asked that way, it is difficult for Harry to lie; rather, he may say, “Uh, well, yes, Jody needs to hear this.” By finding that out, you’ve avoided wasting a lot of time.

After the presentation, confirm the parameters of the purchase for products and installation and then ask, “Are there any questions?” If so, answer them and follow with, “Okay, let’s get your order moving,” and show him where to sign. If Harry balks, keep the pressure on by asking, “What is your hesitation?” Harry may say, “I want to think about it,” and your comeback should be, “What is there to think about, Harry-do you have another question?” Do whatever you can to uncover the real reason for his delay. Whatever he says, you can follow with, “Okay, but other than that, you are ready to get your order on the way today, right?” If Harry says, ‘Yes,’ then help him get started. If he says ‘No,’ then find out why there is reluctance.

There is a fine line between pushing too hard and not hard enough. All buyers are emotional, and despite the roadblocks, it really comes down to their gut reaction to you and their ability to justify their decision. “Harry, it looks like I’ve made some mistakes by not explaining clearly what we are offering. We have the best price and value for you overall, what else can I do?” Then shut up and let the silence build until he speaks. Sooner or later, Harry’s reluctance and your probing questions will uncover the real reason for the delay. Continue to ask for the order, wear him down, then say, “Harry, you’re just too tough for me. What would I have to do to get your order today?” It may be some additional perk, discount, method of handling a deposit or a scheduling dilemma. Whatever it is, do what you can to negotiate the change and then proffer your order form, again, for signature and ask for the deposit-all with a smile on your face. I’ve had more than one buyer say, “You’re really pushy, Dave, but I guess that’s what I needed, to know that you really wanted our business.”

Asking for the order is where most sales personnel fall apart. Coaching them can be as simple as coming up with four or five ways to ask for the order and having them practice until it becomes second nature to them. “Tom, let’s go ahead and get your order in progress today. Fair enough?” Or, “Susan, are there any more questions? If not, I’ll need your ‘okay’ right here.” You might try, “Jack, will we need a purchase order, or is your ‘okay’ sufficient to start work?” How about, “James, how soon would you like us to begin site prep?” Or, “Bill, can you afford to wait any longer? Let’s put us to work for you today, okay?” Another approach might be, “Jim, with a warranty like ours, how can you go wrong?” In some cases, “Janet, you’ve said the work must be done, and we can meet your delivery. With your approval, we can get started right now.” Or, lastly, “Charlie, here’s a list of our satisfied clients. We can do the same fine job for you, so let us get started today, okay?”

CLOSING SPECIFIED SALES
On most commercial, government, property management or healthcare opportunities, asking for the order is not enough. Yes, you’d like them to know you’re eager for their business, but there is more paperwork, procedure and scrutiny before selection of a company. The larger the potential order, the more complex it becomes. Here’s where you have to deal with proposals, bid forms and various documents. All of them stand in the way of getting an order.

Usually with government purchases, there are requests for a quote (RFQs) or requests for proposals (RFPs) for purchases between $5,000 and $25,000, with the limits varying between agencies and other names for commercial work. When the purchase is for a larger amount, the bid may be an invitation for bid (IFB), either by that name or referred to as a formal bid with more legalese, bid-bond or performance-bond requirements and restrictive terms and conditions. It is extremely important to understand the differences.

For an RFP, the buyer knows what he’d like to do but is unsure of the specifics of how to get there. You may be given a set of floor plans and finish schedule and told to propose the amount of flooring and labor to deliver a finished job. In other cases, the client may give you an estimate of the amounts of materials and labor, e.g., “furnish approximately 500 yards of Klaxon carpet to include delivery, take-up of existing flooring, disposal, floor prep and installation by direct gluedown” as a guideline. In this scenario, it is up to you to do a site visit; measure and calculate the amount of carpet, take-up and amount of floor prep estimated to perform installation; then propose the amount, type of prep and installation in detail. Make your scope of work as clear as possible and break down pricing by section.

Now the client can compare your proposal with those of other companies. Here is where you should ask, “Hey, Jim, how do we look on this project? What questions do you have for me? Are my numbers in line with my competition? Who is my competition on this project?” More projects have been lost through lack of follow-up than any other reason.

More detail in your proposal is usually better because it will allow for a side-by-side comparison. It won’t hurt to go for a trial close for the order: “Would you like to place your order with me today?” Should he demur, ask more questions to find out why. Keep drilling away until you find the reason for delay. “Your numbers are a little high,” to which your response might be, “How about the quantities and specs on the labor? Where would I have to trim our numbers to get your business?”

By pushing a bit, you may find out what you have to do to win the job. “Jim, if I could match that price and provide an extended warranty on installation, will you give me the job?” If the proposals are all a little out of his budget, propose alternative products to save him some money, and the old standby, “What would I have to do to get your order today?”

If there is to be a meeting between the buyer and bidders to discuss the upcoming bid for products, delivery and installation, its primary purpose is to ensure all bidders understand the bid scope and thereby eliminate protests after bidding. This is done informally with RFPs if particularly complex, or formally with IFBs when dollar limits of an award are expected to be high. Prepare by reading the proposed bid document. Often, a walk through of the site location is done prior to the meeting. Look carefully at the scope of work, terms, delivery times, acceptable products and final completion date or project duration.

This meeting may be your first chance to see representatives of your competition, their demeanor and degree of interest in the project. By now, you may already have a list of questions for the buyer. Listen to his summary of the bid document and glean any specific hot buttons to add to your list. Wait for others to ask their questions, then be circumspect with what you ask. Don’t tip off your competition to specific anomalies that may favor you. You may even want to underscore the expected difficulty of floor prep required to scare them off. Ask how the buying decision/basis for it will be made, if not specifically stated: Is this to be a single award or multiple awards for a specific time with renewals? Should there be variances in performance required, how will these be addressed? If anything is unusual or left unstated, ask for an explanation.

After the meeting, the buyer may respond in writing to the major questions and send to all bidders. If you still have questions, try for a telephone call or a personal meeting with the buyer for answers. This is also a great time to make friends and establish your credentials and potential value to the buyer. No, you don’t want to become known as a “difficult vendor,” but rather one who is helpful and sincere.

For large-dollar potential bids, most use an IFB, in which the buyer has taken the time to do their due diligence and is specific on the amount and type of products and services expected and has asked for your price to be presented in a prescribed way. For your bid to be valid, you cannot offer or propose something different than what is called for on the bid; otherwise, your bid may be deemed “non-responsive.” If you’ve attended a site visit, taken measurements, reviewed the scope of work and find the bid parameters incorrect, you should bring this up to the purchasing agent and ask questions before the bid due date. If you know an IFB is incorrect, you should still bid on exactly what is stated, then raise your concerns after all bids are in and you know there is an intention to make an award to you or another bidder. Give the buyer a chance to amend. If the dollar difference is less than 10%, many buyers will look at all valid bids submitted and select the apparent low bidder and negotiate the difference. If/when there are important integral differences, then an amendment to the IFB may be sent or it may be scrapped and a whole new bid prepared.

Whatever the case, mistakes can be made and your ability to land the order will be enhanced by keeping in touch with the purchasing agent. Keep it friendly and ask questions. “Jim, I went ahead and bid the job as stated, but I believe the yardage was a little off and the labor amount a little low. How do we look to you on this bid? Is there anything I can do to help?” Or, “Since our bid was competitive, why not go ahead and award me the job, and we’ll modify the minor details, okay?”

I have gotten an award when both of us knew the details were flat out wrong, but the money was available to do the job and the time for performance was short. To solve the time crunch for a rebid, we started the job and immediately filed for a change order to take care of the shortfall. The buyer’s agent inspected the area and agreed to a correction, and the buyer approved the addition to the purchase order/contract. Though this was a formal IFB, the astute buyer knew how to work the system and regulations for everyone’s benefit. “You were determined to be the most responsive, best value bid on the original IFB.” People do business with those they like; that’s your edge! Once an award has been made in an IFB, it is rare that it will be changed. Also, always be charming.

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