Construction CRM Systems

Construction CRM (Client Relationship Management) systems specialized CRM software that is tailored to the construction industry and how sales and business development teams operate in this industry. We’ll analyze these processes in more detail in this article.

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Construction CRM Software
What It Is and How It Can Help Construction Companies

What Is Construction CRM Software?

CRM stands for Customer Relationship Management. As a technology system, construction CRM software stores and manages customer-related information such as contacts, client companies, leads, opportunities, and won and lost deals. More advanced CRM systems make the customer-centric data readily available and easily accessible. They organize and present this data to the user in a in a way that aligns with the construction sales pipeline. They also help users make informed decisions and even predict where the best chances of winning a bid are.

The construction industry is built around client relationships and trust. Most often, building owners, developers, and general contractors award projects based on the relationship they have with a construction firm. Client-centric information at their fingertips gives construction firms competitive advantage. Let’s see how.

Benefits of Using CRM Software

In any industry, using a CRM software has shown benefits that go beyond helping sales teams stay organized and on top of their responsibilities. Even more so in an industry that is so centered around client relationships. Construction CRM software helps construction companies:

  • Increase customer satisfaction and retention.
  • Improve closing ratios with automated follow-up functionality
  • Determine client winning rates with reporting capabilities
  • Save their sales team time by automating administrative tasks so they can bid, negotiate, and close more deals
  • Improve the decision-making process by making client data readily available, easily accessible, and actionalble
  • Make important go/no-go decisions armed with all the information needed
  • Spend time and money bidding the projects that are most profitable
  • And many more – there are many other benefits to using CRM software, including future forecasting based on historical data

What is important to note here is that construction CRM software is specialized CRM software that is tailored to the construction industry and how sales and business development teams operate in this industry. We’ll analyze these processes in more detail in the next section.

Sales Process in Most Industries

The Sales Process in Most Industries

Companies in most industries operate with a 2-step sales process. A lead (or a person/company interested in your product or service) ideally turns into an opportunity for a product or service you deliver. For example, if you had a web design firm, you may get a contact form submission from a potential client inquiring about pricing. At that point you submit your proposal to them and follow up to close the deal. The more competitive the price and the more your follow-up with that potential client, the higher your chances to close the deal and deliver their website.

The Construction Sales Process: Complexity and Differences Compared to Other Industries

The construction sales process is a more complex, 4 or 5-stage process, and differs between general contractors and sub-contractors.

Sub-contractor Sales Process

Let’s look at the construction sales process for sub-contractors. They first form and nurture relationships with general contractors (GCs). When trust is established, they will start receiving leads (usually as Invitations to Bid or ITBs) from these general contractors when opportunities arise. Sub-contractors then send out bids or proposals to multiple GCs for the same opportunity. They track these bids to establish the status of that opportunity. After several follow-up stages for the opportunity, they will establish whether that opportunity turns into a won deal and project or a lost deal for them.

Sub-contractor Sales Process

General Contractor Sales Process

On the other hand, the construction sales process for GCs is a 5-stage one. It starts with a rumor or hearsay about a proposed project. These rumors are tracked, sometimes for years, before they turn into opportunities. But once an opportunity presents itself, the general contractor sends invitations to bid (ITBs) to their network of sub-contractors. Once they have the sub-contractors’ proposals in hand, they determine their budget for the project and send their proposal to the client (the building owner/developer). At this point, the GCs’ sales efforts are geared strictly towards winning the project.

General Contractor Sales Process

After one carefully analyzes this complex sales process, it is clear that the construction industry needs opportunity-centric CRM software. A system that will offer not just the information to nurture and build relationships with clients but follow the opportunity through the construction-specific sales stages. So, let’s look more closely at the characteristics of a CRM that supports construction sales teams.

Construction CRM Software Must-Have Features

What we’ve outlined so far is that any construction company can benefit from using CRM software. But not just any CRM. The system must have all the client relationship management features like other CRMs, but it also has to be opportunity-centric and fit the construction sales process. In other words, construction companies need construction CRM software. Here are the must-have features:

  • Client Management: Contact and client pages that show all current opportunities with that client, past projects, winning rate, types of projects that a client is mostly involved in, areas where they operate, and much more. This information is crucial to client relationship management.
  • Opportunity Management: A clear view into your pipeline. You can immediately identify the opportunities that you need to bid or the ones that you need to follow-up on. You can delegate work across your sales team with opportunity-specific tasks and make sure that no opportunity goes to waste. Calendar integration would also be helpful here.
  • Proposal Automation: Proposal writing is one of the biggest time wasters in our industry. And that is because we rely on past proposals, and copy/paste accordingly. Saving time with proposals based on templates and the correct client information is a must. A senior estimator who is preparing and sending out about 10 proposals a day says, “I save at least 1 hour a day with our construction CRM.’ And that is just in the proposal writing and sending process!
  • Multiple Client Bids for 1 Opportunity: This feature specifically helps commercial sub-contractors. An opportunity-centric CRM is another must-have for sub-contractors but, even more so, the ability to track multiple bids and their status for the same opportunity. Then, and only then can you follow up with the right client at the right time.
  • Follow-up Automation:
    Most estimators and salespeople tell us they feel like they don’t follow up enough because they don’t have the time. This is where scheduling and automation come in very handy. Starting with a follow-up calendar that shows you which opportunities you need to follow-up on. Continuing with automation tools to send out follow-up emails to the right contacts at the right time. And… finishing up with a system that automatically updates your records and notes, taking the burden of administrative work out of the sales process.
  • A Central Repository: All too often, construction companies do business from spreadsheets or multiple systems. We all know how it goes: Search accounting system for job number to find client -> go to spreadsheet -> see all contacts from that company -> go to email -> and so forth. With a central repository of necessary data at your fingertips anytime and anywhere, you are always on top of the sales pipeline.
  • Reporting, Analytics, Forecasting: It’s a fact that nothing improves the decision-making process better than having the right data at your disposal when you need it. Let’s take the decision to bid a client for a project for example. The client bid winning rate, pre-approval status, your past project experience with that client, all factor into your decision. Construction CRM software captures and reports on all the important data to aid your decision-making process. Reporting and analytics also help you identify which projects are most profitable, the locations where you win more work, and which clients give you the most work. Forecasting will show you where to concentrate your efforts.

Construction CRM Software Infographic

In conclusion, there is no question that client relationship management (CRM) software is worth the investment for any AEC firm. But what we’ve come to realize in our analysis is that an opportunity-centric CRM system is a must-have for construction firms to realize true ROI. Construction CRM software will empower your sales team and directly impact your bottom line (positively of course).