12 Effective Strategies to Boost Construction Sales and Reduce Labor Costs

While many construction companies thrive by doing quality work and relying on their reputation to attract repeat customers and referrals, some construction companies produce quality work but fail to remain profitable.

Since the start of the pandemic, this has been even more difficult as a significant supply-demand gap for building materials emerged, causing prices to soar and putting a strain on construction companies.

Today, costs remain high for construction companies, even without taking into account the impact of trade negotiations and tariffs. All of these can affect the size of the company’s profits, but most of them are outside the company’s control.

So how do these companies boost construction sales, reduce labor costs and improve profitability?

Understand your costs

It is important to know all the costs associated with your project to calculate the sale price and make profits.

In construction, an estimate is one of the most important and complex processes. Fortunately, there are many construction estimating software solutions, such as those recommended by Bridgit, to facilitate this.

Your expenditures, which include material, labor, and overhead costs, can vary from region to region and any increase can significantly affect your project and your sales.

Calculate employee turnover in each area and choose between fixed-price or time and job contracts when budgeting. Both methods have their pros and cons. However, early clarity about the project can help you avoid any unplanned and anticipated costs.

Find out what each employee is capable of

After working with your employees on several projects, you will learn about their skills and strengths. If you have a more skilled and versatile workforce, you can train your employees to handle multiple tasks to maximize efficiency.

Streamline your sales funnel

As a contractor, you will focus on quality construction projects. However, building a solid sales funnel is just as important to increasing sales in construction. From lead generation to project implementation, a streamlined sales process can help you cut costs and build a reputation with your customers. Remember: happy customers bring more customers.

Invest in marketing

Irrespective of the industry, marketing is essential for any business. In the construction business, it is important to advertise construction projects and their features. Leverage different digital mediums to reach a vast number of prospects. It is important to build a community and to increase your website traffic through SEO and social media promotions.

Provide exceptional customer service

In the construction business, good customer service can go a long way. It starts with the first meeting with the customer and helps you build trust every step of the way. Competitive and accurate estimates, timely communication, quality execution, and on-time delivery can have a huge impact on buyer’s perception of your brand. It can generate good recommendations for your business.

Leverage technology to reduce costs and increase new construction sales

Digitising construction planning, scheduling, inspections and collaboration can help you keep your profit margins under control. In addition, lean construction software solutions have recently been introduced to the construction technology market, and they can help you keep costs sensible, make projects run on time and build in concepts like sustainability from day one.

Furthermore, with a technology platform like Bridgit, you can easily simplify your construction workflow. The software helps you connect with project management tools, CRM and HRIS to build an integrated software stack.

How to reduce labor costs?

Labor costs are one of the biggest construction costs that can significantly affect the bottom line of an enterprise. Especially during a recession, labor costs rise and the sales curve flattens out.

Here are some strategies for reducing labor costs to help you manage your costs without compromising on quality.

Reduce your workforce

This is the fastest way to reduce labor costs, though not ideal. Communicate positively with your employees, explain to them the reasons behind the layoff and provide them intangible benefits to compensate for the loss.

Hire contractors

If you don’t have enough projects to engage your workforce full-time, hire contractors for each project. Contractors often are more experienced and specialized in their skills and produce quality work. With this strategy, you can significantly cut down your labor costs too.

Increase training

Train your workforce on multiple skills. Pick those laborers who are capable of doing more but are not engaged in many projects. Train them in-house or send them for on-the-job training.

Reduce turnover

Offer a competitive edge to attract the right people. Consider rewarding your long-time employees with an extra reward or incentive bonus.

You can lower your turnover by hiring wisely. Ask the candidate about all construction-related skills, including ethics and reliability.

Reduce benefits

Although workers may not welcome this action, you may need to reduce or change employee benefits to reduce labor costs.

Retire seasoned workers

Offering early retirement packages to more seasoned workers can help lower your labor costs and may increase productivity and efficiency.

Adopt technology

Many cloud-based tools can integrate different business functions and reduce the need for separate employees to perform a variety of tasks.

Conclusion

Referrals are valuable in the construction business. When you deliver a great project and experience to your customers, they recommend you to others and increase your chances of acquiring new customers.

To maximize customer satisfaction, boost your construction sales, and reduce costs, you should continue to test new strategies and implement innovative technologies.

With the latest CRM tools, you can easily manage your sales and workforce together. The tools allow you to create detailed sales reports, identify opportunities, receive important project notifications, identify gaps and assist you in labor planning and budgeting.