Marketing Strategy

Subcontracting Marketing Strategies

Subcontractors help larger companies finish projects on time and on budget. We'll tell you how to use subcontracting as an effective marketing strategy, and we'll describe what it takes to build relationships with firms that hire subcontractors.

By positioning yourself as a competent subcontractor, you can work on large projects or government contracts that are normally beyond your reach.

Competition is fierce for the best subcontracting opportunities, so you better know your stuff - including our top subcontracting marketing strategies.

What does it take to win subcontracting contracts? It all starts with these fundamentals:

• Know Yourself. Before you actively seek out subcontracting opportunities, make sure you understand your company's core competences and the qualities that set you apart from other subcontractors. Leveraging your abilities and past experience, start making a case for why you are uniquely positioned to meet the prime contractor's needs.
• Know Where to Look. Like it or not, the companies who are most likely to hire you as a subcontractor are your direct competitors, larger firms who consistently beat you in the bidding process. If you're going to succeed as a subcontractor you are going to have to stop burning bridges with your competitors and start making friends with them. It's not easy, but take comfort in knowing that the relationships you forge with the competition will pay off in subcontracting opportunities, which in turn could lead to landing larger jobs on your own.
• Know the Process. When you are a subcontractor, you work directly for the prime contractor - not the client. Some prime contractors allow subcontractors to directly interface with clients, while others don't. Either way, end runs around the prime contractor are frowned upon, and attempts to create your own contracting opportunities with the client are considered taboo. If you want to leave the door open for future subcontracting opportunities, be respectful of your prime contractor and play according to his rules.

Advantages and Disadvantages of Subcontracting

Subcontracting opportunities are advantageous for young businesses and companies that are trying to establish a foothold in their industry. Although they lack the contacts and name recognition to land the contracts themselves, they can gain valuable experience working on large projects that promise solid revenue.

The downside of pursuing subcontracting as a marketing strategy to fuel business growth is that you will end up working through an intermediary. Subcontractors typically earn less than prime contractors (because the prime contractor keeps a percentage for himself) and usually don't get paid until after the client pays the prime contractor. Additionally, the unwritten rules of subcontracting make it difficult for you to bid for the same projects as your prime contractor - especially if you are relying on the prime contractor for future work.

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