If you own a construction company in South Africa chances are you are looking for ways to grow your sales, especially during the quieter months. Whether it’s building dams, bridges, roads, skyscrapers or shopping centres, all construction companies have one thing in common – providing innovative construction solutions to their clients.
If you're thinking about expanding your construction business, it's important to plan carefully. Whether you're just starting out or have been in the industry for a while, growing your business requires strategic thinking. You need to make sure you have the resources in place to handle the extra work (after using our sale strategy of course ;)) The last thing we want is for SMEs to feel like they are overstretched and struggling to meet customers’ demands.
Think about what industries you want to expand into. Do your research and make sure there's a potential customer base there. Then start putting together a plan for how you will acquire the resources you need to service those new areas. Once you have a solid plan in place, you can start executing it and growing your business at a sustainable pace. To guide you along the way, we’ve put together a step-by-step sales plan for you.
5 key tactics that will increase sales for your construction company:
1. Define & understand your target audience
This should be a pretty straightforward process if you have an existing customer base. Here you’ll need to map out past, repeat and potential clients. At first, it might need to be a manual process of creating a database of these customers. The next step will be categorising these clients and seeing which ones have the potential to be long-standing clients e.g. if you’ve received a once-off contract to build a bridge for a specific municipality, is there potential to put in a proposal for building roads/dams for that same municipality (if you have these expertise). Hubspot, Salesforce and Zoho CRM are some of the best CRM (customer relationship management) softwares available for SMEs in South Africa, and if you are looking to scale your construction company, you should prioritise setting aside budget for these tools. Using the CRM software, compile a database which further categorises your clients according to project type, location and potential for growth. Now that you’ve classified your clients a bit more, it’s time to actually understand your target audience. What are their needs? What are they looking for in a construction company? What things are important for them during the onboarding and project delivery process? Start off by creating a detailed profile of this audience, categorising their needs. Use the initial meeting to retrieve as much information as possible on the client. The idea here is not just to find potential clients, it’s actually to see if the relationship is the right fit, are you going to be able to deliver on their needs and are their construction deadlines realistic and achievable.
2. Put together an effective marketing strategy
If you have mainly relied on word-of-mouth to secure new business, there is no reason to fret, however, an effective marketing strategy can catapult your revenue growth even more. If you already consider your branding and marketing to be A-class for your industry, there is always room to improve. This could be as simple as putting together professional branding collateral so that when you send a potential client a proposal, it’s attractive, well-thought-out and on-brand. If marketing hasn’t been a focus at all for your construction company, then spend time outlining your brand identity, language and message – meaning how do you want your clients to perceive your brand? A brand style guide is a good starting point, this will include your logo, typography and colour scheme.
If you don’t have the budget just yet to outsource your marketing efforts, then a simple website, Google business profile and LinkedIn profile setup are a must. Once you have your LinkedIn profile set up, create a basic content calendar, and ensure you are posting content that appeals to and resonates with your target audience. When you do eventually have the budget, SEO (search engine optimisation – how your clients find you on Google), newsletters and Google Adwords – will need to be the next area of focus. If you don’t have the time or confidence to develop an in-depth marketing strategy, then outsource it to an agency that has experience working with construction companies.
A big part of your marketing strategy should be a well-crafted elevator pitch, meaning how can you explain your value in under two minutes. Concor (formerly Murray & Roberts construction), has summed up its product offering and value as “Concor is a diversified infrastructure and services construction company, with core competencies in the infrastructure, building, mining and property development sectors.” With this statement, you know what they do, and how they do it and that can effectively get the job done.
3. Optimize your customer onboarding process
If you’ve never put together a structured sales funnel, it’s best to spend time as a team mapping one out. The first part of your customer onboarding process is taking a step back and prequalifying leads. Yes, it can be very exciting to get a phone call from a potential client looking for a construction contractor, however you need to ensure it’s the right fit. Before going deep down the customer onboarding funnel, make sure they are a good customer. Time is money, and in the case of construction, wasting time is further delaying the construction project. Put together a set of questions that are unique to your company, here are 5 common questions contractors should ask their clients before starting a construction project:
- What are you looking for in a construction company?
- What is the project budget?
- How involved would you like to be in the project?
- What would potential challenges be for the project?
- What is your expected timeline?
The questions above can either be asked over phone or during the first formal meeting. The initial client-contractor meeting is a game changer when it comes to sealing the deal, so make sure you entice your potential client to set up this meeting. CRM software like Hubspot can make this process a whole lot easier, and more streamlined with automated emails and scheduling. Whether it’s a simple landing page on your website, with a link to ‘schedule a meeting’, or if it’s a well-written email outlining the meeting purpose and objectives. Once you’ve secured the meeting, make sure it’s all about fact-finding. So in addition to the questions above, you’ll need to find out how you can provide a well-executed construction solution for their “problem”. Use this meeting to find out more about how they award contracts/tenders, and what their look for in a supplier in terms of likes and dislikes. Use your CRM software to move qualified leads through your sales funnel.
4. Win them over with a kickass proposal
Once you’ve found out as much as possible about your potential client and their needs, it’s time to sell your services and USPs (unique selling points). If you have a sales and marketing team, work closely with them to design this collateral, and start off with a proposal template using your company brand guide. The purpose of a proposal is to provide compelling solutions for your potential client. In some instances you might be given an RFP (request for proposal) by a public or private enterprise, so you need to make sure you are fully equipped with the required documents.
A winning first-time proposal is detailed and specific, ensure your proposal covers the following sections:
- A company profile – what your company does, your BEE status, insurance information
- An estimated overall cost, and criteria required for the project to be successful (be specific and thorough in this section e.g. include zoning fees, labour costs etc)
- An outlined schedule, approach and plan of action – this timeline will include benchmarks that need to be achieved by specific deadlines.
- Testimonials from satisfied clients
- Agreement statement – either attach this to the proposal or have a link to a PDF that the client will be able to sign. This step is crucial as it ensures the projects can commence with a legally binding contract.
Part of your proposal process, especially for first-time clients, is taking your potential clients to site visits (if possible). These clients want to be able to see your project style, and this might be the deciding factor in whether your construction team are a good fit or not. During your client-contractor meetings, you’ll be able to gauge how your customers like to be followed up with. Whether the meetings were online or in-person, send them a follow-up email a few days after the proposal has been sent. This email should have a strong call-to-action, either to set up another meeting to discuss the proposal further, or the agreement statement where the client can sign the dotted line.
This step in the sales funnel is where a lot of construction companies lose focus, either because the potential client isn’t responding immediately or because the proposal wasn’t well-thought-out and didn’t entice the client enough. Don’t be disheartened, if the client is taking their time to respond to your proposal, it could be for a number of reasons, but persistence is key. Your sales funnel needs to be tracked effectively, including your follow-up process, this way you’ll be able to adjust your funnel accordingly.
5. Get the business finance you need
Whether you are a small business owner or own a large construction company, either way, there will likely come a time when you need extra cash to keep the cogs of your business turning. Construction companies in South Africa can often take financial dips where they aren’t winning as many tenders as they’d like to. If you want to grow your business, you may need access to funds that will help you achieve your business goals. Whether you want to increase sales or expand your client portfolio, move into new offices, or hire more staff to ensure a new project is completed on time – a business loan can help you take the next level up.
Business finance options for construction companies:
Although there are a variety of business finance options available for construction companies in South Africa, these are the most common funding types.
Invoice discounting is a form of short-term business finance that enables businesses to borrow money from a finance provider based on the value of their unpaid invoices (hence the term ‘invoice financing’).
It works by companies selling their future income stream as an asset to the lender. This allows businesses to access funds quickly and easily if they often work with clients who have long payment terms.
Invoice discounting is perfect for construction companies that work with large corporates or government municipalities. These big companies often enforce long payment terms on their supplier contracts, which means cash can get locked up. This is the perfect use case for invoice factoring.
If you need equipment to complete a new construction project, this financing type is designed to assist you. Equipment finance offers different options to purchase or acquire the right to use the equipment and generally uses the equipment as collateral.
The different types of equipment finance (also known as asset finance) differ mainly on how ownership transfers (if at all). Sometimes the funder owns the equipment and you ‘rent’ or ‘lease’ it over a term. At some stage you may have the ability to own it near the end of the term of the agreement; it all depends on the contractual terms.
Deciding between these options requires careful consideration of cash flow, as well as whether you actually want to own the asset, and importantly there are tax and VAT implications. If you are in a situation where you need digger loaders, forklifts, or cranes to complete a construction project, asset finance offers you the ideal solution to ensure you meet your deadlines and get paid for the end result.
And there we have it, all that’s left now is to put this game plan in action. If you are looking to increase your sales as a construction company in South Africa, all it takes is determination and focus (combined with our tactics of course). As the business leader of your company, make the time to strategize and come up with new and effective ways to thrive in your industry.