Leveraging the Change Order

1. Leveraging the Change Order Philip Kresge Sr. Director, National Resources

2. What will we learn today? Nothing we don’t already know!

3. We know what we should be doing! Maybe we’re not doing it because . . . • Overwhelmed • Preconceived notions • Complacent

4. What we’ll talk about • Change order in the scheme of promotion vs. sales • Prospecting for opportunities • 3 Ways to Facilitate the Change Order • Success Stories • Getting the most out of your success • Turning sales into promotion

5. Promotion vs. Sales • By definition, promotion is a long-term investment • Influencing a thought process • Sales is a more immediate process • We usually differentiate between the two • Change Order more akin to sales than promotion • An everyday occurrence in our promotion efforts

6. Promotion Dogma • “Getting in early is key to successful promotion” • “Once the job is in Dodge reports, it’s too late” • It’s never too late!

7. Change Order • Substituting a specified building material with concrete. • Asphalt • Wood • Steel

8. Change Order • Job specific • Time sensitive

9. Change Order can be most successful if you . . . • Solve a problem for your customer • At thetime they are thinking about it • Do it easily and quickly • Selling Solutions

10. Prospecting The Usual Suspects • Dodge Reports • Construction News • Local Networking

11. Only the most foolish of mice would hide in a cat’s ear

12. Don’t overlook the obvious Only the wisest of cats would think to look there

13. Review Current Projects • Mid-job / Next-job recommendation • Landscaper, in the midst of sodding a yard, suggests a rock wall to reduce runoff • Caterer, serving a summer party, reminds client that Christmas is only five months away

14. Review Upcoming Projects • Residential • Already doing walls & floors • What about driveway? • Commercial • Someone will be asking for a price for footer/floor • What about parking lot? • Flowable fill possibilities?

15. Know Your Customer • Decision makers • Vote yes or no • Influencers • Can convince decision makers • May be stakeholders • Should be on your promotion team

16. What does your customer want? The only way to know is to listen!

17. What are the Hot Buttons? • Aesthetics • Energy Efficiency • Initial Cost • Life-cycle Cost • Unique Design • Sustainable Development

18. Listen to customers’ wants and decipher their needs Teach customers to want what they need

19. Energy Efficiency ICF Construction Teach customers to want what they need • Low Maintenance • Concrete Parking Lot • Aesthetics • Decorative Concrete

20. Look at all the possibilities • Tilt-up Walls • ICF • Parking Lots • Flowable Fill • Decorative • Pervious • SCC • ??????

21. Utilize ALL Your Tools

22. Low Tech Pitch Book • Promoter may only have 10-15 minutes for introductory meeting • Alternative to using laptop/projector for presentations • Fact-finding mission

23. Low Tech Pitch Book • Concrete Parking Lots • Over 1,000 sold • Flowable Fill • Initial orders (300) being distributed now • Pervious Concrete (TBA) • Environmental Benefits of Concrete (TBA)

24. Change Order can be most successful if you . . . • Solve a problem for your customer • At thetime they are thinking about it • Do it easily and quickly

25. 3 Ways to Facilitate the Change Order • Make Suggestions • Exercise your expertise • Ask for the Order • The fast food approach • Design/Build

26. Make Suggestions • Use your professional expertise to provide insight • Provide alternatives to existing designs • Present new technology • Self consolidating • Pervious • ICF • Demonstrate benefit to owner • Quality • Economy • Safety

27. Salvation Army • Allentown, PA • Owner looking to resurface existing asphalt • Contractor • Power of Suggestion • Stressed Safety as an issue (hot button) • Provided unsolicited proposal for concrete • 7,500 ft2 parking lot

28. Muncy Homes • Owner looking to upgrade gravel lot • Spec’d asphalt paving • Team identified “hot buttons” • Low maintenance • Life-cycle cost • Taught owner to want what he needs • Owner chose to pay $500,000 over asphalt bid • Initial proposal • 550,000 ft2 =12,000 yd3 • Owner added 4 acres

29. Ask for the Order • You are already bidding the job • You are already supplying the job • Mid-Job / Next Job Recommendation • Decision maker may consider alternatives if beneficial • Mobilization costs reduced • Construction schedule • “Would you like fries with that?”

30. Osram - Sylvania • Bethlehem, PA • Tilt-up Concrete Building • Producer & Contractor made pitch for 296,000 ft2 parking lot • 5,600 yd3 concrete

31. Harvest States Flour Mill • Slip-formed building and silos • R/M Producer suggested concrete parking lot in lieu of spec’d asphalt • Priced competitively due to lack of mobilization costs • 5,000 yd3 of concrete in parking lot

32. Smith TransportRoaring Spring, PA

33. Originally steel building with asphalt pavement • Footings, floors, etc. 3,500 yd3 • Converted to Tilt-up + 5,000 yd3 • Asphalt to Concrete + 4,000 yd3 • Total Concrete 12,500 yd3 • 250% increase after project was put out to bid • “Would you like to Biggie Size your order?”

34. Design Build • Possibly the easiest way to facilitate the change order • D/B is a strong influencer • Producer / Contractor part of the D/B team • Present concrete options • New technologies

35. Shelter Systems Ltd. • Producer/Contractor part of D/B team • Owner wants to maximize development of site • 7+ Acres of pervious concrete substituted for conventional asphalt • Eliminated 1 ½ acre pond • “My lumber isn’t sitting in water.”

36. There will be obstacles along the way

37. Not an easy task • Much of the world has its defenses up to keep out new ideas • Customer’s preconceived notions • Concrete is too expensive • Concrete is too difficult to place • Concrete cracks • We can fall prey to our customer’s objections

39. Are we too focused? • Sales call to get P/O for concrete footings, floors • Pays no attention to customer’s comments about • Material price instability • Manpower issues • Construction delays

40. Are we too focused? • Sales call to get P/O for concrete footings, floors • Misses at least three opportunities • Tilt-up concrete • ICF construction • Flowable fill • What about the parking lot?

41. Make sure you are solving the right problem! Count Basie

42. Choose Your Battles Wisely • R/M Producer, Pervious Concrete Contractor, Admixture Supplier aggressively promoted pervious concrete • “The perc rate [on site] was .07 inches/hour. One of the ones on the perimeter was .27 inches/hour.  There were a few where the rock was so shallow they couldn't perform a perc test.”  • “The Commonwealth requires a rate of .52 inches/hour for pervious pavements and requires bedrock to be excavated to three feet below the bottom of the stone reservoir.” • “The strategy that we have arrived at allows us to collect the water from the bus lot and infiltrate it into another portion of the site that percs more effectively, at a rate between .65 and .93.”

43. Choose Your Battles Wisely • “We couldn’t agree more with your points regarding economic and environmental responsibility.  Based upon those criteria, we determined that impervious concrete, combined with underground percolation storage, would be the most practical method of holding and treating stormwater from the planned . . . site.” impervious concrete

44. A Word of Caution • Keep your promotion message positive • Focus on benefits of concrete • Sell Solutions • Handle your competitor’s weaknesses with care • Mediocrity Always Attacks Perfection!

45. Leveraging Your Success: Turning Sales into Promotion

46. How can we switch sales back into promotion?

47. Publicize Your Success • Issue press releases • Create one-page flyers • Distribute to • Members • Promotion partners • Existing customers • Potential customers

48. Osram-Sylvania Project highlighted in Concrete Producer magazine September 1997

49. Bed, Bath & Beyond project highlighted in flyer prepared by ICFA

50. Tell the whole story • Identify the customer/project • Identify the wants/needs • Quantify the results • construction time saved • money saved • customer satisfaction