FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS. Kenneth Borah, Sr. Editor, CDCNews
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1 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS Kenneth Borah, Sr. Editor, CDCNews
2 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS Several years ago, the Associated Builders & Contractors surveyed their membership in order to ascertain their principal methods of obtaining work. Overwhelmingly, the number one answer was through existing relationships. The number two answer was project leads through one or more construction news service. This may not be groundbreaking news; however, sometimes, it is good to reaffirm basic truths. If you are not using both methods, you should be; if you are using both methods, congratulations, you're competing well against your peers. The question, however, is, what can you do to maximize both methods in order to receive the best return on your investment? The process of construction contracting begins with work acquisition. In order to build a job, a contractor must first win the job. Winning more bids begins long before the ultimate submission of a bid or proposal. In order to win more bids, contractors must understand that construction contracting requires dedicated study, field experience, and business knowledge. Winning on a consistent basis requires knowledge knowledge of local legal prequalification processes and/or the prequalification process of key owners, developers and A/E professionals; knowledge of the prospective client; and knowledge of the prospective client s expectations. It is this type of knowledge that is useful both in developing relationships and in pursuing leads obtained from a construction news service. In fact, both methods should be used in tandem in order to maximize your firm's marketing efforts. The construction news service your firm utilizes should assist you in not only obtaining project leads, but also developing 2 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS CDCNews
3 relationships with the key owners, developers, and A/E professionals within your given segment of the industry. Before pursuing any leads or attempting to develop any new relationships in the industry, firms should first conduct a self-analysis and determine which work they do best and, by extension, which work is most profitable. This may sound obvious; however, many firms make the mistake of pursuing any and all work that comes down the pipeline. This can have a deleterious effect both on the firm's marketability and their profitability. Firms should take the time and look at the work they've completed over the past 12 to 24 months and analyze key areas such as types of owners, types of projects, and the locations of projects. Is there a discernable pattern that emerges of projects, based on any or all of these categories, which came in ahead of time/on time and below/on budget more readily than other projects? The knowledge required to win more work, either through bidding or negotiating, comes from many different sources. CDCNews is one such source. Aside from providing project leads, CDCNews can assist its subscribers in acquiring the information they need to develop relationships. Subscribers to CDCNews have a valuable resource in the form of CDCNews network of regional editorial offices. Each region s editorial staff is familiar with state-level certification requirements and can provide subscribers with the contacts at various state agencies who handle the certification process. Similarly, in terms of commercial retail projects, if a subscriber is looking to get their foot in the door of a national chain retailer, CDCNews national reporting team either has the qualification process/requirements available for 3 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS CDCNews
4 review, or they can provide the name and contact information for the person or department within the retailer that handles contractor qualifications. Subscribers can also utilize the newly released (as of June 2011), contact management functionalities in Lead Manager (CDCNews online product) in order to develop key relationships. These enhancements include expanded search parameters for finding contacts, tracking a contact's activity on projects, saving contact search parameters, and an address book in which you can add contacts, create groups, and import and export your contact lists. Building a contact database is the crucial first step in marketing to firms and developing new relationships. Having a contact management tool embedded within the same platform as your construction news service can be very useful when developing a profile of an owner, developer, or A/E professional to whom your firm intends to market. There is one additional component of pursuing project leads that should be discussed and that is the fact that not all leads can be handled in the same manner. As a project lead is updated throughout the project's natural lifecycle, firms should adopt a different approach in how they market themselves in order to land work on that particular project. There are five basic phases in the life of a construction project Conceptual, Design, Bid, Post-Bid/Pre-Construction, and Construction. During the Conceptual phase, an owner or developer has a plot of land and/or a building and has a concept of what he/she would like to do with that land or building. The owner/developer is beginning to seek approvals for the project and has hired (or looking to hire) a site engineer as well as an architect. Although some owners/developers still use the traditional 4 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS CDCNews
5 design-bid-build method, many others are open to other methods of contracting. The Conceptual phase is ideal not only for architects and engineers to market their services, but also for project managers, construction managers, and design-builders. Even if the owner/developer originally intended to pursue the traditional design-bid-build method, this is the time for PMs, CMs, and D/Bs to showcase their qualifications. With the introduction and integration of Building Information Modeling (BIM) and Integrated Project Delivery (IPD), contractors can make an effective argument in favor of the non-tradition CM-at-Risk or design/build methods of contracting. The next step in the project lifecycle, the Design phase, presents a marketing opportunity for general contractors and suppliers/manufacturer's representatives. During this phase, the owner/developer has decided on their contracting method of choice and hired either a traditional A/E firm or a PM, CM, or D/B. If the owner/developer has chosen the traditional designbid-build method, there is still an opportunity for general contractors to market to the owner/developer and the A/E firm. Approximately fifty percent of all private sector work is negotiated during the design phase. A general contractor can market their firm to the owner/developer and/or A/E firm during this phase in order to eliminate the uncertainties of the bidding process. In addition, this is the time for suppliers/manufacturer's representatives to market to the A/E firms (if the traditional design-bid-build process was selected) and CMs or Design/Builders (if either the CM-at-Risk or Design/Build process was selected). At this stage, a supplier/manufacturer's representative can convince the A/E firm, the CM-at- Risk, and/or the Design/Builder to specify their product into the project's actual designs. In addition, subcontractors can interact with CMs and DBs 5 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS CDCNews
6 during this phase in order to prequalify to submit pricing during the Bid phase. No matter which method of contracting is selected, the next stage in the project lifecycle is the Bid phase. In the traditional design-bid-build method, general contractors will now submit bids to the owner/developer. This is also the time for subcontractors to submit pricing to general contractors in advance of their bid deadline. Similarly, if the CM-at-Risk or Design-Build method is selected, subcontractors submit pricing to CMs and DBs by the deadline they designate for sub-bids. During the next phase, Post-Bid/Pre-Construction, awards are made at various levels depending on the method of contracting selected. Under the traditional design-bid-build method, the GC is selected. Subcontractors have an additional opportunity to contact the awarded GC and determine whether they still need pricing on any particular trades. GCs may actively solicit certain trades at this time, which will appear as a Sub-Bid report in CDCNews reports. GCs, CMs-at Risk, and D/Bs will begin to finalize subcontractor awards during this phase, especially for the trades involved in the early stages of construction. Similar, suppliers/manufacturer's representatives can contact subcontractors directly to market their products that would be involved in the project. Although it might appear at first glance that the final phase, Construction, would be too late for any marketing opportunity, contractors should not ignore this stage. General contractors should use project reports that indicate construction has begun in order to get their foot in the door for the next project that a particular owner or 6 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS CDCNews
7 developer may commission. In addition, subcontractors should remain in touch with GCs, CMs, and D/Bs in the event that an awarded subcontractor drops off of the project. Finally, suppliers/manufacturer's representatives should continue to develop relationships with subcontractors. Even if you cannot get on this particular project, there is always another project in the pipeline in which a contractor can become involved. As you can see, finding and utilizing quality construction leads requires a great deal of time and research. However, the companies who succeed are those who invest the time and research, develop a comprehensive marketing strategy, pursue projects that are most profitable, and who utilize knowledge to grow their business. As the American economist John Maurice Clark once wrote "Knowledge is the only instrument of production that is not subject to diminishing returns." 7 FINDING AND UTILIZING QUALITY CONSTRUCTION LEADS CDCNews
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