Field Notes
Why Builders Lose Bids They Should Have Won
"We went with someone else. Thanks again for coming out."
Two lines, sometimes three. If there is a third it says the other bid came in lower, and that is the whole post-mortem most builders ever get. They file it under price, adjust nothing, and bid the next one the same way.
A caveat before any of it. I have sat on the winning side of bids and watched what the homeowner responded to, and I have read the losing packets afterward. There is no controlled study behind any of it, mine or anyone's. What follows is a pattern, told honestly as a pattern. In my experience the third line of that email is rarely the reason, and a builder who takes it at face value bids the next job exactly as he bid this one.
The reader who wasn't on the lot
Two people decide who builds a custom home. The builder usually meets one of them.
The one he meets walked the lot with him, heard him talk about the framing, and liked him. The other one had a job to be at that afternoon. That person gets the bids later, on the kitchen table or on a phone, and reads them side by side with no memory of any conversation. Every bit of rapport from the walk-through is missing from that reading. What is present is the packet. If the packet is a PDF, a logo top left and a column of figures under it, then the packet is what the second reader thinks of the company, and the builder never gets to correct it.
This is the single biggest reason a good builder loses to an ordinary one, and it is invisible from inside the company because the owner only ever hears from the person he met. I wrote about the two readers at length in the branding post. The short of it: the person who signs the check is often the one who never saw the lot.
Three packets that look the same
Put three bids from three builders on a table. In most markets they are three PDFs. Each one has a logo, a scope, a schedule, a number. The type is different. The line items are grouped differently. To the homeowner they are the same document three times with three different totals at the bottom.
When the packets cannot be told apart, the only variable left is the number. So the low number wins, and the losing builder is told he lost on price, and in a narrow sense that is true. What actually lost the job was the packet, which made the number the only thing anyone could compare. A bid that explains why its number is its number, shows the house, and reads like the company that will build it is not being compared on price anymore. It is being compared on whether the homeowner wants to spend a year with these people. That comparison a good builder wins. You did not lose on price takes this apart line by line.
The silence after Friday
Nobody tells a builder what happened to his bid after he sends it. The PDF leaves on a Friday night and the information stops there. Opened or unopened, forwarded to the person who missed the walk-through or not, printed or trapped in a spam filter, he has no way to know, so the week fills up with guessing. The guessing produces exactly one phone call, on Thursday, to a voicemail. The message sounds like a sales pitch to the man leaving it. He builds houses for a living and it felt wrong, so the second call never happens.
Meanwhile another builder's packet arrived as a link. That builder knows it was opened Saturday morning, that the second reader spent four minutes on the rendering page and eleven seconds on the number, and that it has been quiet since. His follow-up on Tuesday is a note about the one thing they lingered on, and it reads that way. A PDF can tell you none of this. The follow-up that comes from knowing what happened does not feel like selling, to the builder or to the client, and the follow-up post lays out how to run it.
The website that undercut the number
Here is a step almost no builder accounts for. Between the walk-through and the decision, somebody in that household types the company name into Google.
This summer we swept 785 general contractors across the US and found 55.5% with weak digital, meaning a site that was dead, abandoned, or too broken to trust. 95.8% showed no client-facing proposal system a homeowner could reach, and 93.8% showed no client portal at all. That study is in the 785 post. A bid for a $2M house that links back to a site last updated in 2017 has a credibility problem the builder cannot see, because he never looks at his own site and the homeowner just did. The number in the bid says one thing about the company and the site says another. The site is all of the company the second reader has met on her own, and she believes it.
The fix is a site that matches the bid, so that the walk-through, the packet and the domain all describe the same company. What actually matters in a contractor website lists the checks.
The number with nothing under it
A total with no range, no stated allowances, no list of what is not carried, is a number the homeowner cannot evaluate. She cannot tell whether it is high because the builder is careful or high because he padded it. She cannot tell whether the low bid is low because it left out the septic. So she guesses, and the guess is usually that the low bid is the honest one and the high bid is the greedy one, which is backward more often than not.
A number explained is a different object. A range with the reason for the range. Allowances stated as allowances. The items deliberately excluded, listed, so the client can see the other bids left them out too. This is the part of the bid the builder is best qualified to write and most often leaves out, because it takes thought instead of formatting. The template post shows where it goes.
What it looked like from the winning side
Custom Crafted Homes, second-generation builders on Cape Cod, has had five proposals go out on a system built this way. Four of them turned into contracts. Among those four contracts is the $1.1M home won on the rendered 3D proposal, which sits inside roughly $1.4M closed through that CRM and is never counted twice. The honest line comes with the numbers every time: the systems were built here; the company closed the sales. The estimating, the craft, the handshake on the lot were theirs. What the system did was make sure the second reader met the same company the first one did.
Five bids is a small sample, too small to call a rate. It is what happened when the packet stopped being the reason a good builder lost.
Measuring it instead of guessing
Most builders cannot tell you their win rate beyond a shrug, and they certainly cannot tell you it by job size, by lead source, or by whether anyone met the second reader. What your bid win rate is telling you is about turning the shrug into a number you can act on. And when the two-line email arrives anyway, the day you lose a bid walks a one-hour post-mortem that will tell you more than the third line ever will.
The list
Five reasons a builder loses a bid he should have won, none of them price:
- The packet was read by someone who never met him, and the packet did not carry the company.
- The three bids looked alike, so the number became the only thing to compare.
- The bid went quiet after Friday and the one follow-up call felt like selling.
- The website said something different from the bid, and the website was believed.
- The number had nothing under it, so the client guessed what it meant.
Every one of these can be fixed before the next bid leaves the office. The proposal system that fixes the first two, and gives the builder the information to fix the third, is The Bid Room, one bid package built from the builder's drawing and numbers, on his brand, within the week, with every price printed on the page. How to bid construction jobs when the client decides on paper walks the whole sequence, and the marketing plan puts it in order with everything else.
The two-line email will still come sometimes. Bids get lost to timing, to a brother-in-law who builds, to a client who was never going to spend the money. But it should not come because the second reader met a PDF instead of a company.