
Construction
Most companies in this sector play the Cost Game. Projects are often standardized and undifferentiated, which makes price the most important and visible differentiator. But these companies still have several levers:
- Pricing basis: These should align to cost drivers and create a range for margins or “plus” portions based on customer and market characteristics.
- Cost sharing: Every construction project has long list of cost drivers. By helping customers understand these drivers, a company can build trust, encourage closer collaboration, and identify areas for potential cost savings.
- Incentives: Fees and functional discounts can nudge customers to minimize costs in mutually beneficial ways.
Companies are now using probability models to assess the likelihood of winning customers at different price points, using competitive bidding behavior and the company’s own win–loss record.
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