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Building Alliances
This situation, while a nice problem to have, requires creativity in meeting customer needs. Such creativity might include looking at building alliances with area competitors to assist you in meeting work schedules. Sounds crazy? Don't say yes just yet!
One elementary mistake that many contractors make is that they seldom say "NO" to a customer's request to complete work. While most contractors think it foolish to turn down work, they are often guilty of promising too much when they do not have the resources to meet the customers needs.
When a contractor takes on so much work that they cannot meet the time needs of the customer they are setting themselves, and their customer, up for a great disappointment. Work that is delayed can become a huge eye soar to the customer, giving them little reason to send work a contractor's way again.
Most contractors want to increase their market share, and turning down work doesn't allow you to dominate your market area...right? Well, since you are probably not interested in learning how to turn work down let's turn our attention to an effort that can sustain your market presence and satisfy your customer's needs. Let me warn you however that this effort, if not followed correctly, can have just as negative result as simply turning down potential work, maybe worse.
Building alliances with other contractors should begin long before you are overbooked with business. Developing a professional relationship with other contractors allows you the opportunity to assess the work ethic, customer focus, and attention to quality that competitors possess. While you may find it difficult to talk openly with competitors, your effort will pay huge dividends later when you are engaged in meeting all of your customer's demands.
What does building an alliance with other contractors look like? Perhaps the tips presented below will enable you to build positive alliances with other contractors in your market area.
Tip #1: Keep a running log of competitors who perform professional work. In your daily travels and interactions within your market area, take note of the work done by competitors. Most good contractors do this anyway but often fail to keep an active log of the competitors and their performance results. Keep a camera in your vehicle and take pictures of such work. You may be able to use such pictures later if ever that competitor is performing work for you.
Tip #2: Invite your competitor to breakfast or lunch. Initiating this tip sends a message to your competitor that you are not threatened by them; that you do not view them as "the enemy" but instead a competitor whom you respect. Such an effort may surprise you both to how open and honest your conversation can be. Often, owners can exchange viewpoints with each other that might be impossible to get from an employee.
Tip #3: Ask your competitor about their commitment to quality, customer satisfaction, and accountability. While every contractor can talk the quality talk, ask your competitor what they have done internally to accomplish such results. Share your own struggles to improve your organizations approach to quality, the customer, and accountability. If you do not get an aggressive response initially, don't fret, it may take your competitor a little while to realize that they can trust you.
Tip #4: Inquire from your competitor whether they would be interested in fulfilling some of your work under your company's name. You should only broach this tip when you have established a relationship with your competitor that is based on trust and understanding. Keep in mind, many contractors are not especially gifted in marketing or selling. Such a contractor could be a perfect match for you if you are strong in such areas.
Building alliances with competitors can be good business for a fast growing business. Such relationships can strengthen your strategies for growth while also meeting your customer's needs. However, several items need to be understood between you and your competitor if a strong alliance is to exist.
First, it is important that your competitor realizes that it is your company's name that is on the line. While they may have equipment with their company name stenciled on it, their workers must realize that it is your company's reputation that will be on the line.
Second, there must be a commitment made by your competitor not to solicit additional work behind your back. Likewise, you must be committed to not talk negatively about your competitor to a customer. Admittedly this issue will be difficult to monitor. However, this is where an alliance must prove itself if any forward movement between the two companies is going to exist.
Third, you must be crystal clear about instructions and requirements that will be met in order to fulfill the job. You must personally take full responsibility to ensure that every piece of information about the job is made clear with your competitor and that their workers fully understand the job needs. You may need to spend extra time monitoring the first few jobs with your competitor until both parties reach a comfort level with each other.
Finally, both parties must realize that even with great communication problems and mistakes may still be made. As tempting as it may be to hold payment for the completion of a job over the competitor's head, this tactic will not build positive and trusting relationships. You must realize the cost of involving others, realizing that your own crews can cost you money in rework.
Approached carefully and thoroughly, building alliances can be a positive experience for you and your competitors. Such relationships can often lead to you taking on even greater amounts and diversity of work than you could normally handle. As you prepare to grow your business, take a personal inventory of your firm's strengths and weaknesses. When you consider your future growth don't overlook your competition, they just might be an answer to improving some weak area within your company that could strengthen your market presence.
Brad Humphrey and Bob Dusin are partners at Gangbox Incorporated, a training and consulting company that targets the construction industry. They work with all aspects of the construction business - job planning, job costing, sales and leadership development. For more information about Gangbox Incorporated go to http://www.gangboxinc.com.