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Increase Contractor Profits with Incremental Sales

While most contractors are familiar with the benefits of new contracts from new customers, fewer know the value of incremental sales and projects from existing customers. However, seeking additional or incremental sales and taking on new projects can offer a cost-effective and stable approach to business growth.

While it’s easy to see how new business contributes to the bottom line, it also requires intensive prospecting, experienced sales teams, customized proposals, competitive bidding, and more.

Conversely, incremental sales from existing customers, or recurring revenue, rarely require the large chunks of time and financial investments associated with new business. That’s why so many construction pros know that increasing sales with existing customers is a profitable way to grow.

But that doesn’t mean that fostering relationships with existing customers is easy. Even in the best commercial construction relationships, challenges can arise. Objections can occur when negotiating contracts, discussing price, or scoping services. However, working through these obstacles may help you create a close professional relationship that can develop into a recurring client. Increasing your share of work on any given project can become one of the most profitable ways to build your construction business.


Cultivate a Set of High-Value Clients

Highly successful commercial construction businesses work with new projects but also cultivate relationships with existing customers that position them as a preferred vendor. These firms understand that this kind of recurring revenue is often more profitable. That’s because loyal customers like working with your firm and appreciate the value your organization offers. These clients don’t bid out every project but instead, return to the same set of trusted partners.

To cultivate these kinds of high-value clients, it’s critical to communicate your firm’s value proposition early on. You must provide best-in-class customer engagement and collaboration and demonstrate methodical account planning and review processes. Your sales representatives will be focused and well-trained and provide consistent measurement and reporting.

Determine the Relationship ROI

Before working on establishing a preferred vendor status with any customer, start by evaluating Return on Investment (ROI). What will you need to do to get more business from your customers, and what monetary return will your efforts potentially provide? Is increasing business a long shot or a sure thing?

When evaluating potential ROI, it’s helpful to estimate the total business opportunity/potential with a customer and compare it to your current share of the business. For example, are you working with a big customer who gives you 5% of their business? If so, potential sales may represent millions of dollars in additional revenue, and investing more time and money in developing better relationships may make sense. Conversely, if you’re working with a small client who already gives you 75% of their business, it might not be profitable to secure part of the remaining 25% share, which represents just a few thousand dollars.

Next, Determine Customer Needs

Often, companies set out to pursue the clients that offer the most value to them without considering what kind of value they can provide to the customer. This approach can waste a lot of time. That’s why it’s smart to determine the firm’s criteria for contractor value. What do they want and need from a contractor? Which aspects of the project impress, differentiate, or create loyalty? Why would they choose a preferred contractor? What’s in it for them?


Develop a customer profile for each key account to determine these customer needs. Not only will you track your involvement with them (costs, timing, satisfaction, margins), but your team will create a map of your customers’ business environment. These records will include segment analyses and maps of the competitive situation.

Once this groundwork is in place, you will begin to see patterns in customers’ expectations and asses if your value proposition addresses those needs. This will help you identify areas for growth for that client and allow you to dovetail your offerings accordingly.

Find Out Decision-Making Processes

It’s also important to know your customer’s decision-making process. Take time to find out how decisions are made, who makes them, who else is involved in the process, and the roles and responsibilities of all decision-makers. Take note of how they communicate and how they prefer to receive reports, bids, and other information.

You can mirror their corporate culture once you evaluate their process and customize your communications, proposals, processes, and relationships accordingly. These customers will start to notice that you “speak their language,” and that will make them feel that it’s easier and more efficient to work with your company.

Develop Implementation Plans

Once you understand customer needs, it’s time to create an implementation plan. This tactical action plan will include goals for potential revenue, strategies for increasing the share of business, tactics to create barriers for the competition, and directions for removing obstacles to the decision process.

As part of this implementation plan, you’ll create a business development budget and include any identified risks. Don’t forget to have contingencies in place in case strategies and tactics do not perform as expected.

Ready to Get Started?

In today’s competitive world, there is no better way to grow sales than with existing customers. At Metro Interior Distributors, we consistently seek to provide informative, helpful, and actionable initiatives that help you grow profitably. Connect with us today to discover how our building materials supply and delivery systems can help you gain more repeat business.

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