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Contractors that want to compete on value instead of on price must learn how to do that. To simply tell a prospect you are the best doesn't work. Today, our society is highly skeptical. People don't believe the government; they don't believe the press; and they certainly don't believe contractors. To compete on value a contractor must be able to produce dominant proof that its offer is the superior offer and that any difference in cost is totally justified.

When I asked Professor Dean Kashiwagi during an April 2011 NCS Radio interview what's the first thing a contractor must do to competing on value, he responded they must first find the right clients. (To listen to the entire interview go to www.Jackstreet.com/Jackstreet/WCON.Kashiwagi5.cfm.) Of course, some prospects only care about price, but not everyone. In fact, Thomas Winninger reported in Price Wars that only 27 percent of consumers are totally price driven, but then these aren't the value contractor's clients. He further reported that 17 percent of consumers only care about value or in essence always want the best. However, the key is the 56 percent in the middle that will buy based upon value or price. They are definitely interested in value, but are forced to rely on the default solution of taking the lowest price when they don't understand the value proposition. This means it the contractor's responsibility to prove with dominant information that its offer is worth any additional costs if it wants to win these over these prospects.

Therefore, your job is to identify the 73 percent of prospects that will consider value, because dealing with the remaining 27 percent is a waste of time. If you are still skeptical, consider that one roofing contractor that employs this approach in Montana and Wyoming gets over 90 of its proposals accepted. This contractor is not the cheapest roofing contractor in town. When I asked him, "How do you get such high results?" He replied, "If they start talking price I don't even bother quoting them." This isn't hurting his business since usually he has to turn work down because he has too much. Would you like his problems for a change?

Another example of a contractor winning a project based on superior value is Schuff Steel's bid on Steve Wynn's Venetian hotel and casino. The design was a concrete design, but that didn't deter Schuff Steel. They submitted a steel proposal anyway. Wynn's project manager questioned Schuff on why they were submitting a steel proposal on a concrete design especially when their price was $20 million dollars higher. Schuff merely responded we know all that, but we can build your building six months faster. The faster construction schedule would increase Wynn's revenue by $3 million dollars a day for 180 days or about $480 million. It didn't take long for it to become a steel building. If you can deliver enough value to the client your construction price doesn't matter. Your job is to find the right solution that delivers the best value. In essence, you need to out-think your competition instead of attempting to out-muscle them with a lower price.

But how to do you convince the prospect?

Once you have identified value conscious prospects you must make a conscious effort to understand what they consider delivers value to them. Unless you focus on what's important to the prospect they will not be interested in your value proposition. Peter Drucker has stated that that every company needs two skills: marketing and innovation. When he referred to marketing he wasn't referring to your brochures, but your market research. In essence, it's about learning about the needs of your potential clients. Once you have uncovered the client's challenges you need to use innovation to develop superior solutions that maximize the value delivered.

However, having the right solution isn't enough. The contractor must be able to convince the prospect that in fact they have the right solution. The only way to consistently do this is with dominant proof. What do we mean by dominant proof? Dominant proof is proof that is unquestionable. In other words, everyone that reviews it agrees with the conclusion.

To produce dominant information on your value proposition you must measure your performance. Specifically, you need to measure any divergence your company creates on costs, schedule, and quality. Only by demonstrating that you consistently perform what you promise will you establish the credibility that your offer is something the prospect can be sure will occur.

However, it is equally important to measure customer satisfaction. It may surprise some that if you hit the budget, the schedule and produce high quality the client might not be satisfied. First, the value you deliver is in the mind of the client. It's not your opinion that matters but the clients. Therefore, while you may have delivered what you promised, if it doesn't do what the client wants the client will be not be satisfied. Therefore, it's absolutely critical that you understand the client's needs and desires, so that you can deliver solutions that address them. Second, how customer friendly are you to work with?

Many contractors are very left-brain driven. In other words, they focus on the numbers and schedule. Daniel Pink in the Whole New Mind reports that left-brained capabilities "are necessary, but no longer sufficient." He adds, "The right-brained qualities of inventiveness, empathy, joyfulness, and meaning -- increasingly will determine who flourishes and who flounders."

In other words, to compete based on value you must consistently deliver projects that address both the client's technical and emotional needs. To put it another way, consider the superstar athlete on the field that is a constant disruption to the team. That individual quickly wears out his welcome and is traded despite his technical abilities.