“The competition is killing me”

By Jim Mastin Sr

In recent weeks, during reading numerous posts by contractors, I have seen a common thought being expressed. That is the concern due to some “less professional” contractor under cutting them in the bidding process.  There probably isn’t a contractor alive that hasn’t given a very close bid in order to get a job, only to have some guy in a beat up truck come by and under bid you and get the job. You know very well that you would have done a better job and used more quality materials than this “low baller”. 

Well, what should our feelings be about this injustice?  Let me point out a few things that I hope might encourage you a little. First, the definition of competition: Business competition is usually a business that has similar goods and service in the same area as you are. If a customer has to decide whether to go to you or them, they are competition.

1.      Competition is healthy

If it weren’t for competition, we would all be about the same since there would be no incentive to be better then someone else in our trade.  Implementing our special skills and business knowledge would be a waste of time.  But, competition forces us to do a better job, use better materials, be more punctual, and treat customers very well.

Are de Geus said,  The ability to learn faster than your competitors may be the only sustainable competitive advantage.

2.     Competition is the promoter of reputation

All of us have a reputation whether we realize it or not. Someone said one time that if you really want to be humbled, type your name or the name of your company in a Google search and see what comes up.  It’s amazing how many people out there will quickly criticize inferiority. Now we know not all of us will show up on the web, especially if we work under the radar. But, if you have a published business and don’t show up, that’s probably a good thing, at least for the negative things. So, look at competition as an opportunity to build a great reputation.

NOW, what can we do about the guy that under cuts us with inferior service?  First, realize you are in this for the long haul.  Better service always wins out in the long run. If you continue to offer “very” excellent service, you will still be around when the “undercut guy” is gone.

Evaluate your business. What could you do better that the other guy can’t.  Re-read our post on “Why did the other guy get the job?”  Be sure to follow those suggestions. The great advantage in competition is excellence of product.  Here is a quote by an unknown person: A competitive world offers two possibilities. You can lose. Or, if you want to win, you can change.

3.     Streamline your business for the most efficiency

Whether we like to admit it or not, some of our businesses are over bloated with unnecessary expenses, which puts us one step behind in the bidding game before we start. Overhead can be a killer. The guy mentioned above with the beat up truck, doesn’t have high truck payments,  maybe no insurance, little or no advertising expense, probably no business insurance costs, no website expenses, no business card expenses, etc. etc. So, how do you compete with that? I suggest two things:

  1. Trim any unnecessary expenses from your operation. Go through your check book for a month and see where your money went. Scrutinize every dollar as to whether necessary or not. Remove those items and trim your bids by an appropriate amount. That will allow you to be a little more competitive in your bids.

2.    Educate the customer as to your value.  Present them with a clean, well printed business card. Be sure they know of your insurance, of the number of successful jobs you have done, of your satisfied customer base.  Assure them you will be around to make things right in the event of a problem. (They have got to wonder that about the other guy)

The law of the ages says that the one who does things right will eventually prevail. Forget about the other guy and his undercut bids.  Consistently give a good product with good service and you will prevail.

Nancy Lopez said,  A competitor will find a way to win. Competitors take bad breaks and use them to drive themselves just that much harder. Quitters take bad breaks and use them as reasons to give up.

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4 responses to ““The competition is killing me”

  1. One additional way to beat the competition is to get out of the bidding game altogether. In the bidding game the loser wins. If you are the same, or see yourself and your business as the same as your competition, you will have to compete through bidding. If you are different, offer something different, and find prospects who want different, you don’t have to bid. You do however need to know how to market to attract the right prospects and have the ability to sell as a professional.

    • Shawn,
      Your right however, most consumers now shop on-line before buying a product or a service.
      Realistic budgets for interior painting have been available for years using Quick Estimator. Given these tough economic times, the ability to succeed on your own terms is more important than ever. By owning your success, you will never again be dependent on someone else.
      If this is true for you, offer “ballpark” estimates based on average for your potential customer to compare, without any travel time or expense.
      Designed to qualify your potential customers and send you a summary of work needed.
      Next, follow-up and visit the job and sell yourself every time. People buy from people so get in front of those who want to do business with you.
      Good selling,
      Tom

  2. Hi Jim,

    Thanks for the article I was just struggling with this very subject you must have been reading my mind. Thanks for some insight to this nagging question that I don’t understand why clients hire just on the cheap as I find I am very fair when I give a quote.

    Pam

  3. Jim,
    Thanks for the Article. Find out how the prospect is buying (ie. Price, whose on site, quality, are you bidding against competiton that has cone highly recommended from a friend). I believe that if you have done your home work, provided a detailed estimate, sold yourself to them and they pick someone who is much lower in price then they may deserve what they get. I think there are some customers out there that are willing to end up paying what you offer, just start a lower contract price with your competition.

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