- Cleaning Proposals: Managing Rejections
- By Dick Ollek — posted 05/10/2011
A colleague recently bid on a fairly large production facility with what he felt was a fair price. Soon after, his bid was turned down and he was told that his proposed cost was much more than the prospect was currently paying.
Unsure how to proceed after receiving this rejection, he asked the company if his bid was significantly higher, and they said yes. He asked if the services included in the contract were the same, and they also said yes. He asked if there was a budget the prospect was attempting to meet and was told they wanted the service cheaper than their current provider (however, they did not disclose that figure). Even though my colleague highlighted his company’s commitment to excellence and provided several excellent references from his best customers, the prospect still was focused on a "price beat" mentality.
This dilemma is very common in our industry. Like my colleague, most business owners are unsure how to handle rejections when it comes to bidding. Some common questions I hear include:
- What is the best reaction to a rejection?
- Do you try to lower your price to get in?
- Do you just accept the "no" and move on?
- Should you fish for more information?
Mind Your Manners
You can always try being open, honest, and polite. You might respond to a rejection like this: "Your business is extremely important to us and I want to learn from my unsuccessful attempt this time. Please tell me how far I missed on price and what else I could have improved on in my proposal and presentation. I want to eliminate those mistakes in the future so I am asking for your help. I respect your opinion and I want to improve my processes." Most business owners will respond positively to such an honest and polite retort and will be happy to oblige you. Even if it won’t win you their business this go-round, they will remember you as a professional they respect and will think of you the next time they need new services.
Rethink Your Strategy
My approach has always been that my company provides proposals rather than "bids." When you approach the process in this manner you can go to the prospect and indicate that you would like to develop a program that meets their desired budget. Then you ask for a budget dollar they have in mind so you have something to work with. Some obviously won't give it to you.
If they still want a bid, we ask for the current specifications and request an appointment to deliver our proposal to discuss our professional approach to their needs. Then we will produce an alternate proposal along with the original that they requested. When delivering the proposal, we present both sets of specifications and investment amounts. We show them exactly what the differences are.
Then I give them a ballpark number for both alternatives and ask, if they didn't give me their budget, if we have addressed their budget concerns. I remind them that it is only a "ballpark" number and if they will tell us what they are looking for in dollars we can quickly tell them whether we can reach that number or not. If they refuse to give us their budget figure again, we tell them that their business is very important to us and we want to do everything we can to meet their needs and ask again for the budget number. If they still won't, you have to decide whether to walk away. If we say "we'll match any price," we have cheapened the service we have to offer and then we become a commodity.
Even if you don't get the business, by approaching your prospects in this manner you will leave them with the impression that you are a very professional company. I would even venture to say you will be their preferred provider next time.
In approaching your prospects as a professional company wanting to offer proposals rather than give "bids," you may not close them all the first time. However, your follow up close rate the next time will be far greater than if you remain just another "bidder."
Keep in mind that this strategy is based on the fact that you have something to offer a prospect other than price, such as a one-of-a-kind training program, a 24/7 way for them to reach you, or a distinctive screening process for new employees and that you are selling those features during your presentation.
Last, but most important, is the thank-you letter. Always write a letter to the prospect thanking them for the opportunity to present a proposal and ask them to please consider you again next time they are reviewing their needs and budgets.
Check out this video where Steve Spencer shares contractor bidding tips. Watch it now.
Reprinted with permission from The Janitorial Store.
Dick Ollek, CBSE has been in the building service contracting industry for nearly 45 years, 34 of them owning and managing his own company. He currently serves as owner and senior consulting partner for Consultants In Cleaning, LLC, Camdenton, MO. He is also author of Selling Contract Cleaning Services 101. He can be reached at firstname.lastname@example.org; phone, (602) 684-8877. For more information, visit www.consultantsincleaning.com.