The days when the lowest bid wins the job may soon be over. In this post-recession market, a strong focus on relationship building and value is giving some firms the competitive edge they need to remain profitable amid a still diminished pool of projects.

More than a quarter of general contractors and subcontractors are more profitable than two years ago in large part because of effective business development strategies, according to a 2012 business development survey conducted by the Associated General Contractors of America and FMI Corp.

Released in May 2012, the AGC-FMI survey collected more than 300 responses from general contractors and subcontractors across the country to understand how firms view and execute business development differently in today's environment compared with the boom years before the recession.

"What we're seeing is that the most successful firms have been proactive and made business development an integral piece of their strategic vision, whereas firms that have chosen more reactive, business-as-usual, price-alone approaches have felt the effects of the economy more so," says Cynthia C. Paul, author of the AGC-FMI "2012 Business Development Survey" and managing director of FMI Corp. in Denver.

"This slow-growth environment has forced contractors to take a hard look at their approach to business development and determine how they can achieve value for their clients, communicate that value and differentiate themselves from competitors," Paul adds. "The ultimate goal is to meet the needs of the client in a way that no competitor can."

Despite significant differences in the operating environment between 2005 and today, the survey found that the underlying principles behind business development remain the same: Win the right volume of work of the right type with the right customers.

Less profitable firms report spending a greater percentage of their revenue on targeting and winning work than did their more profitable peers who aligned business development with high-value activities and targets. More profitable firms apply a business development strategy primarily in pursuit of qualifications-based work. A greater distribution of less-profitable firms pursue a broader mix of project delivery types and engage more in public lump-sum work. Firms are evolving and adapting business development strategies for their own needs. A common thread, Paul says, is that top firms are taking a more targeted approach to new business, instead of chasing any and every project.

The Right Targets

Mark Dinapoli, president and general manager of Boston-based Suffolk Construction Co.'s Northeast region, says that to increase hit rates, it's important to pick the right targets. "We're much more focused and only go after projects where we can bring the best value to the client—and our differentiators will be valued," he says.

"If you can't provide differentiation and value added to your prospective customer in terms of what you have done on previous projects—and what they can anticipate you will do for them—then you are way behind the curve on the competitive landscape," says Dennis Cornick, executive vice president and director of national sales and marketing at Gilbane Building Co., Providence, R.I.

Another common theme among profitable firms is a shift toward company-wide business development. One department or group may have handled business development in the past, but now project executives, superintendents and other field people are assuming a greater role in building client relationships.

"What we've found is that clients do not want to hear a sales pitch from our sales team," Dinapoli says. "They want to hear about the technologies and methods we employ from the project executives and superintendents who will be on the jobsite working on their project."

At Suffolk Construction, key salespeople are partnering with operations people to create powerhouse business development teams. Likewise, Gilbane's operations people are stepping up, working alongside salespeople to build relationships with current and prospective clients.

"The recession has blurred the line between the get-work side of the equation and the do-work side of the equation," says Mike Ford, executive vice president of DPR Construction, Redwood City, Calif. "We have business development people, but now everyone is doing their part. Our frontline superintendents, for example, have been key to our sales process in recent years, obtaining referrals from architects and engineers they interact with."

BD Training

Recognizing the growing importance of business development, more and more companies are investing in education and training. DPR has hired outside consultants to develop and integrate sales and business development training "to groom the company's next generation of rainmakers," Ford says. Sales coaches meet with the staff members once a month. Suffolk, like many companies, is recruiting top talent for sales and business development. The company recently hired former Google and Sony executive Christopher Woods as its new executive vice president of national business development.