Beyond the Build

Customer Relationships

In Bidding, What’s the REAL Total Cost?

Price? Transaction experience? A combination of the two? Judging from a few meetings I’ve had recently, seems like it depends on who you talk to.

Investors. Last week, I was talking with the vice president of a publicly traded real estate REIT. He said that when considering all parts, pricing should theoretically be the same. To him, it’s about the service and the delivery. This sounds simple, but it’s easier said than done.

Petrochemicals. A major petrochemical contractor on the Gulf Coast recently that told me that in his world, many times his pricing is the same as his competitors. Then it is the “service experience of safety” that sets him apart. While he is in a unique situation (he still has money flowing in from the last 5 natural disasters) he’s had three record-breaking years in business.

Developers. This week, I was having dinner with a long-term customer in Baton Rouge who said that success in business is about delivery and quality as much as anything else. So when businesses are failing in these times, it’s not always about the economy. Good business practices will survive.

What I’m saying here is that while price is important, the experience and quality of delivery are huge factors in winning business. Service experience can theoretically equate to a dollar amounts, whether recognized or not.

I try to share with our prospective customers that the first bid is just the beginning point, it’s not the middle and it is not the end. So here’s what we do throughout a job:

  • Avoid over-promising. We deliver the best cost the first time. There will always be something cheaper out there, but it’s not the final cost a customer will pay.
  • Follow-up. I check in periodically throughout the job, circumventing normal lines of communication. I want to ensure to we are delivering.
  • Adjust. When tweaks are needed, we make them immediately.
  • Stay on time. We close out ontime with quality and this leads to repeat business.
  • Keep it “fun.” Then we get to do it again.

How do cost and experience balance in your industry?


Merrill Stewart Jr.

Merrill Stewart is Founder and CEO of The Stewart/Perry Company, a commercial building contractor based in Birmingham.