How to Get Customers to Accept a Higher Construction Bid

If there is one thing that is likely to be an ongoing challenge throughout your career as a California state licensed contractor, it’s negotiating fees and proposals with new clients or customers.

Obviously, no one likes to pay more than they have to for anything, and the high dollar amounts involved with construction mean that you are going to face your fair share of requests for a discount. Additionally, the construction industry attracts a large number of contractors (and unlicensed workers) who are willing to do a job for almost nothing, either because they plan on doing quick, cheap, low-quality work, or because they are just trying to make a name for themselves and create new contacts.

So how do you charge what you’re worth in that kind of business environment? The short answer is that you help customers to understand the difference between price and value. In other words, show them that it all comes down to quality.

Here are a few tips to help you get started:

Show new customers your positive reviews. In the past, we have advised you to save up testimonials from happy customers to show that you can be trusted with a project. When negotiating proposals, be prepared to share these. Often, the peace of mind that comes with hiring the right team is worth more than a few dollars, and a few good reviews could sway things in your favor.

Explain what can happen with low-quality work. A lot of customers think they want the cheapest bid… right up until the moment someone shows them how their contractor’s planning on cutting corners. If you can outline the risks of low-quality work for them (and show why you would do a better job), then you can easily justify charging more than one of your competitors.

Put it in writing. Although a lot of contractors come in with low proposals, the reality is that they end up charging just as much – and taking twice as long – as anyone else would. If you can guarantee your budget, schedule, and other details in writing (or at least guarantee them to fall within a certain range), then customers may choose to work with you instead of writing a “blank check” to a different contractor.

Want to become a smarter, more profitable California contractor? Look at our online schedule of upcoming CSLS classes. We have something for everyone, from construction professionals who want to become licensed contractors to industry veterans who want to take the next step in their careers.