5 Ways Artificial Intelligence Is Changing Construction
The potential applications of AI in construction are endless. RFI’s, rework, and change orders are standard in the industry. Machine learning is like a smart, hyper-focused assistant which is able to scrutinize mountains of data. It can alert project managers about the critical things that need their attention. Several applications already use AI in this way. Its benefits range from mundane filtering of spam emails to advanced safety monitoring.
AI is currently being used to plan and design the routing of electrical and plumbing systems in modern buildings and design new framing systems. AI is being used to track the real-time interactions of workers, machinery, and objects on the site and alert supervisors of potential safety issues, construction errors, and productivity issues.
Despite the predictions of massive job losses, AI is unlikely to replace the entire human workforce. Instead, it will alter business models in the construction industry, reduce expensive errors, reduce worksite injuries, and make construction more efficient.
Artificial Intelligence Will Make Construction Workers Safer
Many accidents are the result of human errors and deliberate accidents. With AI, operations managers are able to analyze and filter huge quantities of data to identify potential problem areas. For example, in the construction industry, workers often work in tight spaces, use heavy equipment, and operate large equipment. These high-risk activities can be derisked with the right IoT applications and monitoring. Many companies already have a first responder app that provides information on construction sites. In the future, AI will be integrated into these systems to quickly identify problems and inform human decision-makers before they turn catastrophic.
Artificial Intelligence Will Make Construction Sites More Effective
To improve construction effectiveness, AI can be used in many ways. It can provide an optimal construction schedule and reroute critical tasks in the event of a disruption. It can monitor activity on a job site and create a set of guidelines for safe practices. It can provide risk assessments for individual jobs, determine the best means of preventing accidents, and use predictive models to warn managers about high-risk tasks. AI can help with building management, control work process automation, and track construction activities..
For example, IBM and Cisco are working together to create construction zones with sensors and cameras that can be used for remote management and site supervision. These sensors can detect how many people are on site, if they are wearing proper equipment, and if any crews are operating outside of their scheduled area. It can also detect construction defects and inform the construction team if a build requires correction.
Artificial Intelligence Will Make Construction Designs More Efficient
Up to 90% of errors in design involve not updating basic information on a design, such as weight, density, and measurements of materials.
AI is now able to control these parameters accurately by directly linking data sources from the manufacturer, even for very complex designs. AI is also able to increase productivity and quality by refining designs with minimal human intervention. It can recommend the most cost-effective way to build each building based on the market conditions, building requirements, and construction priorities.
Artificial Intelligence Will Make Construction Estimating More Accurate
Many tedious parts of construction estimating can be eliminated with the power of AI.
AI gives construction estimators a better prediction model of what will be required on-site, allowing for a greater degree of efficiency, reduced costs, better scheduling, and improved profitability.
Smart contractors can go in-depth to understand what the project requirements are, allowing them to offer construction plans that meet the needs of their clients more effectively. Companies that employ AI will gain new levels of accuracy and precision when it comes to building estimations.
Artificial Intelligence Will Make Construction More Modular
In one of the most under-reported developments in the tech space, prefabricated units are on the cusp of a revolution. Prefabrication is quickly becoming a cost-saving tool for governments and businesses. Facilities that used to cost up to $100 million can now be constructed for as little as $20 million. In an effort to streamline design, construction, and maintenance, modular construction aims to reduce waste and ensure quality construction at a cheaper price. By using pre-manufactured units, modular construction essentially cuts the time needed to construct a building down by up to 50%. It’s also safer as contractors don’t have to worry about constructing multiple units on-site as in traditional construction.
AI will assist in process planning and manufacturing design to allow prefabricated buildings to be built faster, cheaper, and safer.
Project Name St. Michael’s Supportive Living Centre (Fenwyck Project)
Value $52M
Area Spruce Grove
Schedule 2021 – 2023
Developer St. Michael’s Health Group
Notes Construction of a five-storey supporting living facility by the St. Michael’s Health Group in the Fenwyck area of Spruce Grove. The project is phase one of the development.
ProjectName The Jameson Residential Tower
Value $34M
Area Edmonton
Schedule 2021 – 2023
Developer Open Sky Developments
Notes Construction of a 17 storey residential apartment complex in the Oliver neighbourhood of Edmonton. Upon completion, the building will contain 140 residential units, ground floor retail, and an underground parkade. Construction began on September 7, 2021.
ProjectName Kate Andrews High School Replacement
Value $36.6M
Area Lethbridge County
Schedule Commencing 2021
Developer The Palliser School Division
Notes The Kate Andrews High School will be replace with a new school with an attached municipal recreation centre. The new school will be able to accommodate up to 855 students in grades 7 to 12.
ProjectName Sora Condos – Building C
Value $19.3M
Area Edmonton
Schedule 2021 – 2022
Developer Carrington Communities
Notes Sora Condos, Building C will feature 98 condos built above an underground parkade. A building permit was issued by the City of Edmonton on September 20, 2021.
ProjectName Newberry Condominiums
Value $17.9M
Area Calgary
Schedule N/A
Developer Truman Homes
Notes Proposed construction of a 78 unit apartment complex located in West Springs, Calgary. The proponent has applied for a building permit with the City of Calgary on September 21, 2021.
ProjectName Sierra Place Building Redevelopment
Value $28.5M
Area Calgary
Schedule 2021 – 2022
Developer HomeSpace Calgary
Notes The Sierra Place Office Building will be redeveloped into an affordable housing development that will contain 82 units and have space for up to 180 individuals.
ProjectName Uxborough Office Building
Value $30M
Area Calgary
Schedule 2021 – 2023
Developer Western Securities
Notes The Uxborough Office Building will be an 11 storey complex featuring 146,000 square feet of space. Construction on the building began on September 17, 2021. The project is part of the broader $400M Uxborough Master Redevelopment.
Permit Type Major Development Permit Permit Date Aug 24, 2021 Status Approved Description of Development To construct a 217 Dwelling Multi-unit Housing building, with main floor Specialty Food Service (less than 100 occupants / 120sq.m. of Public Space) and Health Service Uses, and an underground parkade. Address 8327 – 112 STREET NW
Permit Type Major Development Permit Permit Date Aug 27, 2021 Status Approved Description of Development To construct a 68 Dwelling Multi-unit Housing building with an underground parkade. Address 10303 – 98 AVENUE NW
Permit Type Major Development Permit Permit Date Sep 27, 2021 Status Approved Description of Development To construct exterior alterations to the Site to redevelop the south outdoor plaza area and exterior alterations to the east and west pavilions that are Accessory and adjacent to the Public Libraries and Cultural Exhibits Use (Stanley A. Milner Library); to include re-development and re-design of the Post Office Clock Tower Plaza Site and Judy Padua Way (Road-Right-of-Way); and to construct exterior alterations and to change the Use to Child Care Services to the existing stage and amphitheater on top of the Parkade Exit Ramp on 101A Avenue NW to support the required rooftop outdoor play space for the Child Care Services Use Accessory to the Stanley A. Milner Library; and exterior alterations to the Entry Ramp and Pedestrian Stairwell on 100 Street and some tree removals and new trees on Road-Right-Of-Way. This includes the raising of Judy Padua Way to become a shared roadway and removal of the turning loop from 99 Street North. (Centennial Plaza) Address 7 – SIR WINSTON CHURCHILL SQUARE NW
Permit Type Major Development Permit Description of Development The construct and operate a a mixed-Use building with Commercial Uses on the ground level with two (2) Specialty Food Services (Public Space of 64.4 m2 and 64.4 m2) and four (4) Restaurants (89.6 m2 of Public Space and 86.8 m2 of Public Space and 55.3 m2 of Public Space and 125.3 m2 of Public Space), and four (4) General Retail Stores; with 6 Storeys of Multi-unit Housing (158 Dwelling units); and three levels of underground parkade with 190 vehicular parking stalls consisting of 62 vehicular parking stalls as Vehicle Parking Use and 128 Accessory vehicular parking stalls for Multi-unit Housing Use; and a rooftop patio; and to construct an internal courtyard public space framed by Commercial tenant bays with connectivity to both 102 Avenue and 123 Street; and to construct exterior alterations to the Site. Address 10204 – 123 STREET NW Applicant HODGSON SCHILF EVANS ARCHITECTS
Permit Type Major Development Permit Permit Date Sep 27, 2021 Status Approved Description of Development To change the Use from a Hotel (175 units) and Apartment Hotel (139 Dwelling units) to a Multi-unit Housing with 262 Dwellings, General Retail Store in the Basement, 2 Restaurants on the main floor (CRU 110: 637m2 of public space with 237 seats and CRU 113: 454m2 of public space with 163 seats), and General Retail Stores and Professional, Financial and Office Support Services on the second floor. Address 10201 – JASPER AVENUE NW
As technology has improved the productivity of construction contractors, it has also contributed to the disparity between the top producers and those at the bottom of the production ladder.
In every team, there are usually several employees who seem to have a natural ability to work more effectively and produce more with their time.
Under traditional compensation models, the top producers frequently express their frustration at carrying the brunt of the weight but still earning pay equivalent to the least productive team members.
This is where a properly implemented productivity-based compensation (PBC) program can reward top-performing employees, encourage smarter work, and guide team members towards a more entrepreneurial style of operating.
What is Productivity-Based Compensation?
With the advent of a highly modernized and tech-savvy construction industry, contractors have a new challenge in balancing the relationship between innovation, safety, team morale, and profitability.
Productivity-based compensation (or Results-based compensation, Piece-work, Pay-for-performance, etc.) is an alternative to traditional compensation (hourly or salary).
It uses performance analytics, department scores, and project reports to determine payouts for completed work.
In other words, the business only pays based on what has already been accomplished, and how well it was accomplished.
Many owners are looking for key strategies to keep their company on the top of their game, and productivity-based incentives are one of the best ways to maximize your company’s success.
Rewarding employees on a performance basis is a proven way to motivate them to continue performing at their best. Yet, it’s important to incentivize them in ways that are meaningful, safe, and make sense for the company’s long-term goals.
How Productivity-Based Compensation Works
The traditional compensation system of salaries and hourly rates has resulted in the construction industry rewarding time spent on work over effectively producing work.
This doesn’t match the compensation structure of the business, where productivity, quality, and safety performance are the most critical in ensuring project profitability.
If a contractor performs well, they thrive financially.
If they perform poorly, they earn less profit or record a net loss on the project.
PBC aligns the employee’s compensation structure and incentives with the employers, and improves employee performance.
How to Implement Productivity-Based Compensation
New pay structure systems can be met with resistance, especially from long-term employees who are used to receiving pay increases based on years of service.
This can be challenging to overcome, but in most cases, it provides an incentive for top-performing employees to take more ownership of their projects, excel at their craft, and increase their earnings.
PBC must be a win-win situation for the employer and employee, and you need to put yourself in your employee’s shoes (or work boots) and empathize with how they approach their work.
Focusing only on productivity, instead of looking at the plan holistically, is the first and most common mistake. You need to look at the entire cycle of your employee’s involvement in a project or product. From designing, crafting, to finishing, and from their first day on site, how they interact with the client and other trades, to their last day on site.
Building a system that encourages employees to consider the company’s long-term goals and values, while giving your employees the chance to take advantage of their abilities and earn more income as a reward for their refined skillset and quality output, is the ultimate goal of the implementation.
Companies Successfully Using Different Types of Creative Incentive Plans
Type of Incentive
Percent of Companies Reporting Success
Skills-based compensation
89%
Earned time off
85%
Gain-sharing plans
81%
Small-group incentives
75%
Individual incentives
73%
All-salaried workforce
67%
Lump-sum bonus
66%
Rice University, OpenStax
PBC has been shown to promote efficiency as well as quality, as the employee is held responsible for a properly completed task as a condition of their bonus pay.
Pros and Cons for Employers
Increased productivity
By nature of this compensation system, employees who contribute more to the company and team are paid more, encouraging higher productivity.
It reveals opportunities for improvement
PBC affords businesses the insight to find the areas of their business that needs to be improved. First, identify the low performers, and then analyze why they're performing below expectations. This process will discover areas in your business that need improvements, such as inventory control, shipping, estimating, and just about every other aspect of the business.
Increased employee retention and overall workplace morale
High-performers want to understand what's expected of them, and understanding how they can achieve or surpass those expectations to earn higher pay incentivizes them to stay.
Attractive to high-performers and improves hiring quality
The HR team should analyze the qualities of your high-performers and then identify those traits in hiring candidates to build the ideal team.
Company revenue & employee compensation alignment
In companies without a PBC plan, employees may have trouble understanding what leads to a raise. Linking compensation and performance will provide clarity and a clear path towards career advancement.
Entrepreneurial mindset adoption
Employees compensated on a PBC model gain the power to increase their wages by rethinking their approach to the work. They may conceive of a better execution plan than the one provided by management and will help deliver the project faster and more profitably.
Defective incentives with unintended outcomes
Poorly thought-out incentives can lead to secondary outcomes that are undesirable (see Perverse Incentives in the Best Practices section below). Businesses must be aware of the consequences of incentivization and how employees will react to different measurements.
Internal resource constraints
Operating on a PBC plan definitely adds stress to the business operations if incentives, departments, or managers are not aligned, which may cause friction between crews and/or departments.
It can negatively affect collaboration and teamwork, as PBC tends to focus on an individual’s or crew’s achievements over the team's wellbeing.
Difficult to reverse
Once a team has adjusted to the PBC plan and is seeing the benefits it provides, it can be difficult to revert back if it’s not working. If you find another compensation structure that would work better, you will face resistance and may even lose some of your highest performers.
Pros and Cons for Employees
Higher compensation
Employees that are highly skilled, effective, and that work well in a competitive environment will thrive, and likely be the highest-paid people in their trade.
Task focus instead of time focus leads to better engagement
When you provide employees with the objectives they need to meet to receive compensation, they have a much clearer idea of your expectations.
It also shifts their mindset from “How much time is there left in the workday?” to “How many more sheets/walls/widgets until I’m done?”
Adds flexibility
Employees that are evaluated on their results and performance are allowed more flexibility in their workday. You won’t need to focus on how many hours they work, how long their breaks were, or what time they got to the site. As long as they operate safely, deliver a quality product/project, and have a happy client, they have autonomy in their day.
It may demotivate lower-performing workers
Not all people are meant to work on a performance-based compensation plan. Some employees may be demotivated by the success and results of the higher-performers. This isn’t necessarily a bad thing. You want the best employees on your team, but not all performance is measured the same. Some low-production workers may have brilliant design skills, or are able to communicate effectively with a client.
It can create tension among co-workers
Some crews may be jealous of the rewards and compensation of the high-performers. This can create difficult situations where bonuses can create resentment between crews, where low-performers feel pressured to operate at a level that they aren’t capable of.
9 Best Practices in Productivity-Based Compensation
1. Define a set of standards by which the work must be delivered.
PBC encourages efficiency, so the crew may cut corners to expedite the work. Therefore you need a set of standards by which you will accept a finished project or product. You will need modifiers for things like client satisfaction, internal team satisfaction (Did the shop foreman feel respected? Was all documentation to payroll submitted on time?), and you will need non-negotiables that will wipe out any performance bonus entirely, such as missing safety documentation, negligent actions, and mistreatment of other employees.
2. Start small with a pilot crew and experiment with different variables.
By starting small, you can test the new program to get data on important metrics, incentive flaws, and that compensation is fair to all employees. Some companies only incentivize the foreman of the team/crew and let them decide how the rewards should be distributed. Greedy foremen rarely last for long, and the generous ones garner the respect and admiration of their crew. Other companies may pay out a percentage of profits to the whole crew, relative to their hourly wage, based on project performance.
Not every employee will view higher pay or performance bonuses as the ultimate reward. The company needs to recognize what drives engagement and productivity in its top performers and experiment with their system and rewards.
3. Make it fun.
If you want to implement PBC in order to motivate your teams, it helps to make it fun and exciting. Put up leaderboards that track performance, client satisfaction, safety ratings, quality ratings, and other metrics you find important to share. (Tip: Read the Great Game of Business) Include non-monetary rewards, such as lunches and dinners on the companies dime, or gifts and gadgets (e.g. a tablet, smartwatch, headphones, gift cards, sports tickets) that you display in the office that are awarded based on certain criteria. Ask for prize recommendations and requests. This gets employees excited and gives them something to work towards.
4. Include your team from the start.
Building an effective PBC model relies on both the employee’s and the employer’s ability to agree on what good performance looks like. When your employees are involved in the planning of the model, their ability to understand and adopt the model increases greatly. Your employees are also the best source of knowledge on how to effectively measure good performance.
5. Think of best and worst-case scenarios.
Planning for extreme events, however unlikely, is critical to maintaining the plan during stressful events. Having a pre-defined process for dealing with extremes will prevent rash decisions from damaging your relationship with your employees. For example, ask yourself the following questions:
If we severely underbid a project, how do we rectify that with the employees to ensure they are fairly compensated?
How do we compensate employees that resign/quit/are laid off before completion of a project?
In the event of an accident or safety infraction, how do we determine negligence? How does it affect their pay-outs?
On the bright side, your employees have the chance to become the highest-paid tradespeople in the country and feel more engaged in their work. What does extreme success look like for you and your employees? If one of your employees knocks it out of the park and is making +$100/hr, is that fair and equitable? If not, why not? Figure out if it’s because of your existing beliefs about compensation, or if it’s a miscalculation in your system.
A perverse incentive is an incentive that has unintended and undesirable results that is often opposite to the intentions of its designers.
A famous example is the “Cobra Effect”: The term “cobra effect” was an anecdote of perverse incentives in India during British rule. The British government offered a bounty for dead cobras. Initially, this was a very successful strategy as large numbers of snakes were killed for the reward. However, enterprising people began to breed cobras for income. When the government became aware of this opposite effect, the reward program was scrapped, and then the wild cobra population exploded when cobra breeders set their now-worthless snakes free.
Work to understand the cause-effect relationships of your decisions to the point where you can create decision-making rules in the form of “if/then” statements. I.e. if X happens, then Y will happen. Chaos increases the further you move from the first-order consequence. The more knowledgeable you are of a system will allow you to predict further down the chain of events.
Simple examples: “If we solely incentivize productivity, then safety, quality, and documentation will deteriorate. If safety, quality, and documentation deteriorate, then our reputation will suffer. If our reputation suffers, we will lose work. What can we implement to counter these effects?”
7. Make the system transparent.
Visibility into the payment structure should be readily available and easily interpreted. Every employee should be able to see how their performance on a project affected their earnings, what modifiers were applied, and how they could have performed better.
The Expectancy Theory states that employees exert effort comparable to the reward they expect to achieve. Accordingly, managing time to maximize productivity without a correlating increase in compensation can reduce employees’ motivation and job satisfaction. Expectancy Theory states that employees will think of time-management improvements and boost their output to the extent that their compensation will increase as a result.
8. Keep it simple.
Most work can be classified into one of two categories:
Quantitative Performance: This is where productivity tracking is applied to observe metrics such as pieces installed per hour, square feet of drywall installed, paint hours, repair orders completed, etc.
Qualitative Performance: These are more intangible measurements that are difficult to nail down an exact measurement system for, but it’s not impossible. These metrics include customer satisfaction, employee satisfaction, job quality reviews, and department-to-department reviews to ensure collaboration.
Identify key metrics for each position under the PBC plan and categorize them accordingly. Ensure you have counter-metrics that prevent a key metric from being abused. E.g. if you’re tracking productivity, you need to track safety, quality, customer satisfaction, and team satisfaction.
9. Err on the side of over-compensating your employees.
It’s absolutely imperative to hire and keep the best employees possible, so don’t scare them away by being too demanding of their results. You should base your productivity metrics on the LOWEST performing crew, and build from there. Never make changes to the plan without consulting the crews (or leaders of the crews e.g. foremen). Most companies pay as little as they can get away with paying, but this results in employees who will do the bare minimum, and this ultimately cripples performance and damages the long-term prospects of the company.
Conclusion
PBC aligns the employee with the employer in terms of objectives, as a skilled, motivated employee can thrive financially under a PBC system and only gets bonuses if their project is successful, which in turn makes the project successful for the company. Also, it takes the mystery out of running a contracting business, as you know exactly how much profit each project will net.
Some would argue that the burden of program administration may overwhelm the benefits, but that depends on your metric collection system. The estimating department provides the data needed to calculate how much can be earned from a project, and the estimating department should also have a feedback loop that gathers post-project productivity metrics, which can then be supplied to management/payroll for disbursement. This productivity tracking will in turn provide better resources for your estimating department to bid on projects.
As an employer, you have to be vigilant of the hazard that employees may excessively prioritize quantity over quality, so you have to implement a rigorous QA process and have a way to subtract compensation from an employee delivering low-quality results, presenting safety issues, or getting complaints from stakeholders.
Every company is different, and you can’t apply a cookie cutter to compensation. Instead, owners and managers need to create a compensation system that pays employees based on their overall performance and results that are specifically tailored to their business, their culture, and their industry.
Benefits of a KPI (Key Performance Indicator) Dashboard
Project dashboards make project management and estimating easier and more efficient by showing continuous performance data at a glance.
When employees and managers have access to their project’s data displayed in a visual element, they gain:
Greater insights into their projects
Increased efficiency and productivity
Improved estimating accuracy
Better communication among team members
Continuous feedback on their performance
Real-time information for better decision-making
A dashboard is beneficial for everyone on the team. It keeps team members engaged, managers informed, and C-suites aware of what types of business decisions to expect.
With the right dashboard, everyone is on the same page and understands what needs to be done across the team to ensure project success.
How to choose your KPI’s
To build a useful sales and estimating dashboard that your team will use, you need to focus on your audience and think about the KPI’s that are relevant to them.
Ask yourself the following questions before you start building the dashboard:
Who is your audience?
Who will be consuming this dashboard?
Is this dashboard for a salesperson, a manager, or an estimator?
What actions do I want the dashboard to encourage?
Knowing exactly who is your target audience allows you to focus on the KPI’s that are most important to them.
Design your dashboard with a specific purpose in mind. If you try to cram as much data in the dashboard as possible, it will end up crowded and convoluted, which leads to confusion and miscommunication. If you have more visuals of valuable data that you would like to display, consider creating a second dashboard that allows you to deep-dive into the data.
Having a comprehensive data platform like Salesforce, HubSpot, or Tableau allows you to create dashboards that serve all of your departments in a scalable way. Anyone in your organization can subscribe to a Salesforce, HubSpot, or Tableau dashboard as well as create recurring alerts based on conditions they set.
Project dashboards should be able to report on estimating and sales KPI’s such as Earned Labour Hours, Qualified Bids, Win Rate by Project Type, and many other useful metrics.
Some KPI categories that you can include on your dashboard include:
Project Activities e.g.:
Number and Value of Bids In Pipeline
Bids Currently Processing
Bids Submitted
RFI’s Submitted
Time Spent & Durations e.g.:
Average Time To Bid Submission From Lead Acquisition
Average Time Per Bid Submission
Average Time From Bid Submission To Award
Milestones & Targets e.g.:
Win Rate, by number of deals and value.
Bid Value Submitted
Bid Value Won / Lost
Resource Allocation e.g.:
Assigned Tasks
Bids In Review
Bids In Queue
Choosing the right visuals for your KPI’s
Strong visuals are hard to ignore. The key to a great dashboard is knowing which visuals to highlight, how to display them, and how to allow the user to move seamlessly through the dashboard. Data that can be hard to grasp when presented in a table format can be easily interpreted by adding the right graphs and charts. Trends and movements can be highlighted by using colours and icons such as arrows.
It’s not enough to have the right visuals though. The elements of the dashboard need to be arranged in the right order so the question prompted by the first element is answered by the second element, and so forth down the chain of questions.
A dashboard that tracks data that no one is interested in, or that doesn’t provide a useful recommended action, is a dashboard that people won’t use.
A useful dashboard can be described as: Displaying the right metrics, for the right person, at the right time.
What’s the difference between a KPI report and a KPI dashboard?
The old method of using reports has several drawbacks. It requires labour to produce, it only provides a snapshot in time, which means the information is outdated by the time the receiver interprets the information, and it keeps information hidden from the producers of that information. It is telling you how your team WAS performing, not how they ARE performing.
In large companies, reports can be behind by several weeks, depending on how many manual data inputs are required to assemble the report. This can lead to inaccurate, delayed, and inadequate decisions being made.
Meanwhile, project dashboards provide a real-time source of information displayed in a digestible way. This leads to less time wasted producing reports, faster decision-making, and more time dedicated to winning projects.
4 things to consider when you are choosing your Dashboard KPI’s
The Dashboard’s Purpose
The dashboard planning process is crucial to creating a useful tool for your team. This is where you need to think about its functionality, intended objectives, and hazards. (Yes, there are hazards associated with dashboards and encouraging the wrong behaviour.)
The most important step is achieving consensus within the team or department on what the most critical KPI’s are and how they should be tracked.
KPI’s are binary. They are either met, or they are not. Establishing what the criteria are for a completed KPI should be done before going live with the dashboard.
Every KPI encourages a certain type of behaviour. It is generally accepted that valuing the profitability KPI the highest can lead to disastrous behaviour within the organization that damages relationships long-term and may even put you in a problematic legal situation. This is why you need a counter-balance KPI for metrics that may steer team members away from company values. For example, if you have a KPI for profitability, you may want to include a KPI for Customer Satisfaction (e.g. Net Promoter Score) to balance the behaviour produced by the KPI’s.
Essentially, your project dashboard should be relevant to the user, encourage healthy and honest behaviour, and provide continuous feedback on performance.
Your Existing Data
Project dashboards depend on data. Clean, unadulterated data, and lots of it.
Start by cataloging all your data sources.
What data are your teams currently producing?
What data are your current systems (ERP, Estimating software, CRM’s, etc.) currently producing?
What formats are produced when exported?
Can you upload the exported data straight into the dashboard software?
Next, make a list of the KPI’s that are measurable with the data that you are currently producing.
These KPI’s should be agreed upon by the team before launching the dashboard. Consensus and unanimity are essential for getting the team to adopt the dashboard into their daily routine and provide valuable feedback.
Your Future Data
Building a dashboard produces a lot of useful questions.
“What would we find out if we added this metric to the dashboard and crossed it with our labour hours?”
“What would we learn if we compared suppliers across projects to find which trades worked most efficiently with a suppliers products?”
Understanding the backbones of your dashboard will help you build additional data sets in the future. Having your data export setup to produce a common format such as XLSX or CSV allows you more flexibility when merging data sets and looking for new insights.
The Actions The Dashboard Will Produce
Try to predict the actions that your team members will take after viewing the dashboard. Understanding the analytical, emotional, and procedural actions a team member will take allows you to build a dashboard that people love having around, and will provide continuous feedback on how to improve.
Some organizations like to encourage some friendly competition by including a leaderboard and win rates, and then rewarding the winners at monthly/quarterly/annual intervals. This can be great if you have a team of “aggressive” high-performers that already have a strong social bond, but putting this on a dashboard for a team that isn’t as tight-knit or competitive will just breed resentment for management for trying to pit people against each other.
Analytics isn’t all cold logic and calculated reasoning. KPI’s will need to be tailored to the culture of your team.
Now, on to the list of our essential KPI’s!
List of Essential Construction Dashboard KPIs
Estimators
Earned Labour Hours – Bid vs Actual
Earned Labour Hours = Bid Labour Hours – Actual Labour Hours
This is a “quick and dirty” way of seeing how your estimating data actually matches field performance.
Value Added – Bid vs Actual
Value Added = Project Bid Value – Project Actual Cost
A critical overview of project performance. This would be a high-level element that can be interacted with to deep-dive into the actual costs and revenues of a specific project.
Projects bid vs won by Project Type
Categorize projects by type (e.g. Commercial Retail Unit, Tenant Improvements, Warehouses, etc.).
Projects Won By Type = Total Project Type Bids Won / Total Project Type Bids
Understanding which projects your team excels at, in both estimating and field performance, allows you to strategize on which bids to accept, which markets to focus on, and where your estimating data needs to be improved.
Projects bid vs won by Client
Projects Won By Client = Total Client Bids Won / Total Client Bids
It’s important to know how often you’re being price-checked. Smaller teams will know this intuitively, but when submitting bids at a larger scale the intuition can disappear.
Another useful metric is tracking the dollar amount of projects bid/won. This lets you know if you are losing projects in a specific cost range.
Not all declined bids are the same. This can be detailed further by adding reasons for declining. Knowing the value of bids declined due to insufficient resources is important for planning expansion and preparing for growth.
Projects Lost by Reason
Categorize lost reasons (e.g. Price Too High, Strong Competitor Relationship, Bid Disqualified, etc.)
Understanding why a project is lost is the only redeeming factor in losing a project you wanted to win.
Value of Projects Lost by Reason
Are we losing projects mainly because our pricing is too high, or because or client lost the bid and we didn’t bid to their competitors? Are our bids being disqualified due to errors in our bidding process?
Profit margin by project type
In some cases, the profit margin is improved by stellar field performance, but sometimes it’s because the project was overbid but awarded anyway.
Using this metric along with “Projects Bid vs Won by Project Type” and “Projects Lost by Reason” allows you to understand the full story behind the profit margin. For example:
Your Weighted Win Rate is 25%
On CRU’s it’s only 5%
Your average profit margin is 13%
On the CRU’s you win, your profit margin is 28%
Conclusion: Something in your CRU estimating data is inaccurate
Estimators profitability by project type
Tracking individual estimator profit margin is useful to see which estimators excel at certain projects, and that will let you set up the right mentee-mentor relationships to improve the strength of your estimating team.
Estimators win-rate by project type
Same as above. Some estimators excel at certain projects, and if you’re a manager, that lets you allocate the right people to the right projects.
Bids currently in development
How many bids are currently being worked on will give you an idea of how much capacity your team has to take on additional projects, or if more resources are required.
Number of issues and mistakes found in bid documents upon review
Having a visual of the results of your bid review and QC process allows you to make changes in your estimating process to reduce mistakes and miscalculations.
Sales (and some marketing)
Activities
While I don’t recommend putting too much credence to this metric (results > actions taken), the number of sales activities per rep in a set timeframe can give you a signal of their productivity level. Some common metrics include:
Number of calls
Number of emails
Meetings scheduled
Number of Active Leads and Prospects
Maintaining a consistent amount of leads, in both quantity and value, is important for forecasting and maintaining good cash flow.
Current Market Capture
Current Market Capture = Qualified Bids / Accepted Bids
This is a quick way of estimating market share in your category.
Average Project Profit Margin
Average Project Profit Margin = Cost of Goods Sold / Revenues
Overall, how your estimating efforts are translating to field productivity.
Average Cost per Lead
Average Cost per Lead = Marketing Expenses / Qualified Leads
Customer Lifetime Value
Customer Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period
This one takes a bit of work. You need to have some data already in place that is not readily available from your ERP or accounting department.
Qualified Lead Conversion Rate
Qualified Lead Conversion Rate = Qualified Leads Converted / Total Qualified Leads
Qualified Leads by Source
Categorize Lead Sources (e.g. Referral, Conferences, Word of Mouth, Directories, etc.)
Revenue by Lead Source
Use this metric to dial in on which marketing channel provides the highest return.
Opportunity-to-Win Ratio (By Number of Bids & Dollar value)
Opportunity-to-Win Ratio = Projects/Dollars Bid / Projects/Dollars Won
Average Deal Size
Average Deal Size = Total Dollar Amount Awarded / Total Projects Awarded
It’s important to know if the projects you are taking on are increasing or decreasing in size, and being able to predict changes in project size throughout the local seasons and economic cycles.
Sales Cycle Length
Some salespeople will have faster sales cycles than others. Analyze which cycles produce the highest number of winning proposals and figure out what they do differently. A faster cycle isn’t necessarily better. A salesperson may close deals faster than anyone else, but their customers may be dissatisfied in the long term due to missing details or pressure tactics. Sometimes a long cycle is a healthy cycle.
Customer Satisfaction
There are several ways of measuring your clients’ satisfaction with your services and their perception of your performance. (Net Promoter Score, Customer Effort Score, Customer Service Satisfaction, etc.) Start simple and scale up the survey as needed. Make it easy for your clients to complete.
I hope you find this list of KPIs useful. I am looking forward to hearing your comments and opinions on building your KPI and dashboard process.
Can you find any other interesting metrics that should be considered for measuring estimating and sales performance?
The construction estimating process is critical to the success of every project. Modeling the costs and productivity requirements of a construction project requires contractors to create detailed cost estimates, project and delivery schedules, and construction plans.
Many software firms have attempted to create a seamless estimating experience and provide the tools to create a comprehensive estimating and takeoff process. This guide will cover the options that are available to contractors to allow quick, precise, and accurate cost & delivery estimates for their projects.
Let’s start with a brief review of the overall construction estimating, takeoff, and bidding process.
If you’re an estimating professional, and you just want to see our recommendations, click here.
Understanding Construction Estimating for Contractors
Construction estimating is part of the bid process, during which contractors and builders will typically compile a group of documents, known as the bid package, which summarizes the project details and key information. These bids aggregate the costs that the contractor expects to pay for the sourcing of materials and construction of the project.
The process begins with the project owner creating the bid package.
The bid package contains all of the information the contractors will need to create an accurate cost estimate, schedule, and delivery method.
The documents included in the bid package typically include the Invitation For Bid (IFB), project blueprints, location and schedule constraints, detailed specifications of the contract, which include general standards, contract terms, insurance requirements, and other information about the bid and contract.
Traditional Bidding Process
TAKEOFF
A takeoff (sometimes referred to as material takeoff or quantity takeoff) is the first step in the bidding process. This step involves examining the blueprints and bid documents in order to extract the required materials and labor required for the project.
The information produced from the takeoff is what is used to build the cost estimate and project schedule.
For a General Contractor, some examples of takeoff items may include:
Unit counts: E.g. Counts of light fixtures, concrete barriers, pipe fittings, doors, beams, trusses, etc. Anything that needs to be calculated in unit quantities.
Linear length: E.g. Total lengths of cable, lumber, wiring, trim, rebar, piping, etc. Anything that needs to be calculated in lengths.
Surface area: E.g. Counts of areas that require painting, drywall, roofing materials. Anything that needs to be calculated by its length times its width.
Cubic volume: E.g. Concrete pours, earthworks, insulation, asphalt, etc. Anything that needs to be calculated by length times width times height.
Physical weight: E.g. Gravel, sand, shipping requirements, waste disposal, etc. Weight calculations are often a byproduct of other takeoffs, and are useful when planning transportation and logistics.
ESTIMATE COSTS & TIMELINES
Once a takeoff has been completed, we compile the data to create the cost estimates required for materials, labour, and supplies.
The process typically follows this schedule:
Review Project Scope and Requirements
Create a project schedule with deadlines and milestones.
Identify in-house work and work that needs to be subcontracted.
Determine labour and material costs.
Include risk factors, contingencies, and profit margins.
List project inclusions and exclusions.
Submit bid to Business Development or to the client.
There are several tools available to estimators to help them build their cost estimate.
Estimating & Takeoff software – Manual takeoffs are resource-intense and prone to error. software creates a seamless process from takeoff to bid, with minimal chance for human error and several integrated checks and balances to ensure you have completed the takeoff and estimate accurately.
Subcontractor database – It’s critical to have a good network of subcontractors that you can rely on for expertise and cost estimates. Some companies that provide takeoff software also provide a database of material pricing and general costs associated with a construction project, which can provide a helpful overview into the cost of the project before going out to source local pricing.
Pre-built estimate templates – Pre-built templates are critical to efficient takeoff and estimating processes, and they help you capture details that the IFB may have missed. Most estimating software providers have multiple pre-built templates for GC’s and larger sub-trades.
Item specifications – Many software suites will allow you to store item specs and useful data about materials and components. The information may include things like cost to purchase, cost to install, ANSI specifications, and local distributors.
BID PROCESS
The most common way of bidding is to prepare a hard bid (AKA competitive bid, hard dollar, fixed price, and others).
The GC sources material and subcontractor pricing, and then adds costs for their own supervision, site requirements (such as offices, sanitary facilities, dumpsters), contingencies, and profit.
Contractors with the most competitive bid, along with the best strategy and history/reputation, will likely earn the work. In the case of public projects (owned by government), the contractor with the most competitive bid is required to be awarded the project by law, provided their bid fully meets the requirements of the project.
Software Tools for Estimating & Takeoff Automation
Takeoff and estimating software refers to programs that help estimators extract useful material data from blueprints and IFB files. Some software will assist with generating material cost and labour estimates.
Typically, the software will support most file types for blueprints, such as PDF, DWG, SVG, DXF, XLSX, PNG, and other types of files.
With the suite of tools offered by the software, estimators can measure, calculate, and compile information quickly with fewer errors.
Features & Functionality
TAKEOFF
Tools for Counts, Areas, Lengths, and Volumes – The essential utility of takeoff software is the ability to extract materials, quantities, and requirements from digital files supplied by the project owner.
Collaborative & Team Takeoff – Having your takeoffs and estimates synchronized to allow for collaborative work is crucial for a large team where conflicting edits may happen. Most cloud-based services offer collaborative takeoff features.
RFI Creation & Management– In the event that insufficient information has been supplied or there are conflicting requirements in the project, an RFI will need to be issued to rectify the conflict. Some programs allow you to create, store, and compare RFI’s in a useful layout and dashboard.
ESTIMATING
Activity Tracking – Knowing who did what on which bid is critical to a good estimating management process.
Audit Trail – An audit trail is a step-by-step record which provides evidence of the history of document changes to its source and is useful to see who made changes to a document.
BIM – Some advanced estimating software suites include BIM (Building Information Modelling). The purpose of BIM is to provide both a high-level overview of the project, as well as critical details, to ensure that the right information is included in the estimate.
Cost Database – Most estimating software allows you to import your database of supplier costs, which is critical in building an accurate estimate that is suited for your local market.
Customizable Reports – Management wants to see not only the results of a bid, but how you got there. You can build reports that compare similar projects, subcontractor pricing, typical amounts spent on previous projects vs current, and just about anything else you can imagine.
Historical Database – Having a database of past projects that you can refer to and learn from is an estimating best practice, especially when you can compare estimated vs actual costs with the job cost report of the project you are comparing your current bid with.
Project Templates – Pre-built project templates are useful when you are estimating projects that are similar to ones you have completed before. A 50,000 sq. ft. 3-storey CRU may have similar project requirements as a 60,000 sq. ft. 2-storey CRU, and you can save hours of work by reusing the template (with careful consideration of the project’s differences).
Project Workflow & Schedule – Project scheduling is the process of listing tasks, milestones, critical path items, and subcontractor requirements with a planned start and finish date. Scheduling is often the most critical component of a project where you need to work closely with the operations team to ensure you are setting realistic deadlines and building optimal process flows. Proper scheduling ensures the project is completed on time and within budget.
Projections & Forecasting – Estimating software helps you improve budgeting and forecasting estimates by aggregating cost requirements, benchmarking, and project forecasting. Proposal Generation
Subcontractor Management – During the bidding phase of a project, the GC needs to source a multitude of estimates from subcontractors. The more subcontractors and suppliers you involve in the process, the more risk and exposure the bid gets to failing specifications, inaccurate scope coverage, and inability to perform. Knowing which subcontractors are right for the project (not too large, not too small) is critical to the success of the project.
Task Management Software – Historical task data can help you with process control and productivity when estimating new projects. When you have a reliable track record of successful estimates and bids, you can build new processes and analyze the historical information to help you create better estimates and more accurately predict resource requirements during the estimating process.
What-if Analysis – A What-If analysis can be a time-consuming process of creating variations of the original project and analyzing the effects those variations have on the total project cost & construction time. What-If analysis replaces the painful process of learning by trial and error. If a predictable process or critical path breaks down during construction, the cost to fix, reorganize, or rebuild can carry additional costs and impact the schedule of the project. Using What-If analysis, you can create scenarios in which your operational team can quickly adjust to changes in the construction process or schedule, keeping the project within budget and scheduling requirements.
BIDDING
Approval Process Control – Estimating software should allow you to customize and control the information each user can see and edit depending on their role in the organization. After the bid is completed, there should be an approval process that triggers it for review and submission to the client.
Automated Quoting & Proposal Generation – Manual quoting processes are slow and inefficient in today’s world. Having a time-consuming quoting process scales poorly with your business, as the time it takes to produce winning bids is increased with each additional estimating hire. Using automation allows you to send out more bids in less time, keep track of incoming requests, and update data.
Bid Management – Managing the different versions of your bids often includes making revisions to your takeoffs and estimates. Keeping track of changes and how they impact linked tasks helps you modify bids in an optimal way.
Calendar Management – Everyone needs a calendar to track deadlines, milestones, and submission dates. The integrated bid calendar should show you which projects are due on what date, bid priority in the case of opportunities exceeding the bidding capacity of the estimating department, and tasks remaining until bid completion.
Contact Management – Contractors submitting multiple bids to different clients will find a contact management system incredibly useful.
Customer History – Seeing the past projects that you have bid to a client is useful, especially if the Business Development team has made notes on successful or unsuccessful bids with actionable items that may improve your chances of winning the next bid.
Customizable Reports – Some estimating software comes with integrated sales features that include useful reporting for operations and BD, such as insights into the sales funnel, characteristics and data on winning bids, and estimated times to complete bids.
Digital Signature Software – In today’s world, people want low-friction and easy-to-use ways of doing business. The old way of printing off documents, taking them to the client, and having them sign is being phased out. Digital signature features often includes add ons such as open-tracking (being notified when your client opens the bid) and use-analysis (how long they had the document open, where they dropped off, where they spent the most time, etc.)
Projections – Creating projections for the project schedule and budget is essential for the operations team to stay on track and understand how delays and cost-increases impact the project further down the schedule.
Subcontractor Portal – A subcontractor portal helps you communicate essential information, share project documents, and manage bid revisions with trades that are invited to bid on the project.
The Best Construction Estimating & Takeoff Software
ProEst
PRICING: US$5,000.00/year
FREE VERSION?: No. Free Trial.
FEATURES:
Accounting Integration
Activity Dashboard
Bid Management
Bidder Management
Building Product Database
Change Order Management
Collaboration Tools
Cost Database
Customizable Reports
Customizable Templates
Job Costing Software
Multiple User Accounts
Proposal Generation
Reporting & Statistics
Subcontractor Management
Takeoff Software
Third Party Integrations (Procore, Acumatica, Foundation, RSMeans Data)
PROS:
Extensive list of features
Full takeoff-to-bid process integrated
Builds your estimate while doing takeoffs
Lots of pre-defined templates and reports
CONS:
Expensive for smaller contractors
Some find the scheduling feature to be lacking
Difficult learning curve for inexperienced users
BOTTOM LINE:
ProEst is a great option for midsize to large contractors. The system is cloud-based. This carries both pros and cons. If you don’t have an internet connection, you cannot access the suite. However, you will be able to access it on any computer with internet access, providing great flexibility.
PlanSwift
PRICING: US$1,595.00/year
FREE VERSION?: No. Free Trial.
FEATURES:
Overlays
Quick Estimating
Calculate Measurements Instantly
Create custom assemblies
Import Excel Items
Calculate Labor, Material, & Taxes
Create custom formulas
Includes standard reports
Create unlimited number of custom reports
Takeoff Templates
Assemblies and Parts
Point and Click
Takeoff Templates
Share Estimates
Drag and Drop
Import Blueprints, Projects, and Jobs
Integrations: QuickBooks, UDA Construction Suite, databases like Excel, SQL Server, and MS Access
PROS:
Extensive list of features
Detailed and customizable budgeting information
Intuitive and user-friendly interface
Lots of pre-defined templates and reports
CONS:
No built-in cloud syncing between computers limits collaborative work
Price changes in database do not change pricing for current jobs. Needs to be manually added.
Only PDF is acceptable.
No API for web integrations
BOTTOM LINE:
PlanSwift is best for smaller teams, where collaborative work features are not required. The software runs on your PC, and stores files locally. PlanSwift can be custom-tailored to fit all trades from finish paint to earthwork.
Stack
PRICING:
$1,999.00 / YEAR – 1 User
$4,999.00 / YEAR – 3 Users
FREE VERSION?: Yes.
FEATURES:
Aerial Measurement
Assembly Takeoff
Audit Trail
Bid Management
Building Product Database
Cost Database
Data Import/Export
Electrical Estimating
Electronic Plans
Historical Database
HVAC Estimating
Job Costing
Job Management
Overhead Costs Estimating
Plumbing Estimating
Prebuilt Assembly
Project Management
Quotes/Estimates
Reporting/Analytics
PROS:
Pre-built database that include in-depth lists of equipment, labor, and materials.
Easy-to-use scheduling features.
Fully cloud-based.
Fast loading of projects files.
CONS:
Expensive for smaller contractors
Few accounting and project management integrations.
Rates increase as team add new features.
Cloud-based user interface has limitations
BOTTOM LINE:
Stack is a growing company in the SaaS space. They implement new features quickly, have an active online community, and are constantly releasing new versions. Cloud service is an essential feature for larger teams requiring collaborative tools. The user interface is intuitive and easy to use.
While still in its infancy, Stack is a fantastic tool for estimating teams and is currently our favorite.
CONCLUSION:
The market for construction estimating software is growing at a staggering rate, and there are new options being released frequently.
Many estimating suites come with integrations that allow you to connect to your sales CRM and KPI dashboards. However, most of the options with modern integrations are hosted in the cloud.
To ensure everyone in the organization is in the loop on new projects, you need to ensure there is cross-compatibility with other software suites that may be used for sales and operational processes.
How Google and other search engines work. First things first. Google is not the whole internet. Google is a directory of discovered website links that it algorithmically ranks in order of perceived relevance and trustworthiness. Just because your site doesn’t show up on Google doesn’t mean it’s not accessible. Your website may be live and have great content, but unless it is structured in the right way it may never rank for the terms your customer is searching for.
Google works like this: They have automated searchers running 24/7 that discover and follow links on websites to discover other websites, then they store that information in their database and assign a ranking value to each link depending on its authority score. Google then uses this data to determine which websites are most relevant to a searcher’s keywords, which is then displayed in order of importance and relevance. The resulting list of sites is known as a Search Engine Results Page (SERP).
So, now that we have a broad understanding of how their algorithm works, how do we improve our site pages so that Google ranks them higher than our competitors?
Establish Your Baseline
1. Check your site speed
Your website should load quickly on all devices. Time to Load is a critical ranking factor in Google’s algorithm. Website speed has a considerable effect on conversion rates. Studies have shown that fast page speed results in better conversion rates. Pages that loaded in less than 2.5 seconds had a 1.9% conversion rate, but at 3.3 seconds, the conversion rate was only 1.5%. Now that may seem like a small delta, but if you consider that it means that you will get a 27% higher client conversion rate (1.5% vs 1.9%), which ends up as a big difference on your bottom line. Nobody likes to wait several seconds for any website to load, so most people exit out of a page if it’s taking too long. You can conduct a free page speed test on Google’s Page Speed Insights or use the free tool GTmetrix to test your website page speed, page health, and find optimization opportunities.
2. Check your site health
After you have analyzed your page’s speed, assess the overall health of your site to see which factors are most important.
There are lots of great and free tools to identify opportunities for health and speed improvements.
Pingdom.com: Enter your URL to test the page load time, analyze it, and find bottlenecks and improvements.
KeyCDN Tools: The KeyCDN Speed Test tool can be used to evaluate the health and speed of your website to see where improvements can be made.
3. Assess your current Google ranking
To measure the effects of your modifications and improvements, establish a baseline of your ranking and save the information for future comparison.
Use tools like TheHoth SEO Ranking Checker to see how you are ranking for search terms and which are currently leading to the most traffic.
Long-Tail Keywords
Long tail keywords are 3-5 keyword phrases which are very specific to the service or product you are offering. Specific and long-tail keywords are easier to rank for and tend to match better with your intended customers.
1. Pick 3-4 long-tail keywords to own
The most valuable keyword strategy for producing more leads is to focus on long-tail transactional keywords. Transactional keywords are the search terms a person uses when they are looking to purchase something. Informational keywords are usually searched by people that want information, and are not ready or looking to purchase anything.
Example: A person that is looking for information on how to install light fixtures may search “how to install kitchen spotlights”, while a person looking for a contractor to do the work may search “kitchen spotlight installer” or “light fixture electrician”.
Creating and ranking for informational posts are great for building authority and driving traffic, but they are not high-converting resources. On the other hand, ranking for transactional keywords is valuable because the searcher has already decided that they are ready to purchase. They just need to find the right contractor (you!).
Keywords that have the words below as a prefix or suffix to the rest of the keyword phrase indicate a searchers buying readiness:
Buy
Review
Order
Purchase
Shipping
2. Review competitor analysis
If your competitors are ranking higher than you in search results, you can find out why and by how much they are outranking you. Seeing what your competitors are ranking for is a great opportunity to find keywords missing on your site, and which keywords they are ranking for that you can target.
Once you have identified your highest value keywords, start planning your content around them and strategizing on how that content can convert into a paying customer.
Identify your main keywords by doing keyword research in a tool like UberSuggest. Prioritize keywords by their potential, because you will generate thousands of keywords. You have to be selective about what you want to rank for and decide which are most important to you and your business.
It’s critical that visitors to your site can do two things as soon as they land: know what the page is about, and easily find the information they are looking for. These are indicators to search engines that your page is meeting the searchers intent, which boosts your rank higher and drives more traffic.
4. Plan your content based on the highest-value keywords and tailor your content to those keywords
The best content is useful content that is shareable and easily digested. Optimize for informational as well as transactional keywords and improve your search ranking by writing resourceful and detailed content that helps the searcher in their search intent.
After you have optimized your content for your chosen keywords, you can return to tools like SpyFu’s Competitor AnalysisandUberSuggestto see how your new content is affecting your page ranking. Please bear in mind that search engine optimization and ranking take time, and older content is valued more than newer content. You can expect to see improvements in your ranking typically 3-6 months from your publishing date. These timeframes are accelerated by social sharing, traffic, and backlinks.
5. Generate content that is useful and captivating
The main content marketing strategy today is writing useful blog posts for your potential customer, but there are multiple types of content you can have on your website.
Some of these are:
Blog posts, informational (how-to) or transactional (leading to a sale).
Product page (a page about your products)
Category page (a page showing multiple products or services)
Landing page (a page pitching a product or service)
6. Optimize your pages
If you have multiple products, services, or client types (also known as buyer personas), you should have separate landing pages and service pages for them. What may appeal to one client may not be relevant to another. These pages should have different keywords that are tailored to their needs. Having content that aligns with search intent is the first step, but your pages also need to be deserving of a place on the first page, where Google shows the most relevant and useful results. After analyzing your client’s search intent, you should know what information they are looking for and how to provide useful answers.
Backlinks
Backlinks are considered the most important factor in having a high-ranking website. Backlinks are essentially “votes” from reputable sites. If you have more votes than your competitors, you will usually rank higher than them in search results when the search intent and keyword matching are the same.
1. Complete competitor analysis and find backlink opportunities
You can use a free tool like SmallSEOTools Backlink Checker to find which sites link to the one you’re interested in. The backlink checker should list the domain rating of the linking site, which is an estimate of the score that Google would assign to the link. The higher the score, the more valuable the link.
2. Find the most valuable backlinks and strategize how to get linked
The more high-quality backlinks you have, the higher your odds of ranking among the first few search results. So how many backlinks do you need? There’s no exact number to reach, as not all backlinks are equal. Having links from industry-specific and high-authority sites like associations, chambers, and suppliers is the best strategy. Some backlinks can be considered “toxic” if the linking domain has been flagged for spam or “black-hat” practices.
3. Add internal site links
Internal site links are a great way of leading your customer around your site, and it provides a useful map to search engines on how your pages are related.
Google’s crawler follows links throughout the internet to find and index websites. If your website has proper internal linking, the crawler has an easier time finding the new content that you create and link to. As a result, indexation happens faster, and your content is rewarded by improved search engine rankings.
4. Review potentially toxic backlinks and remove them
There are backlinks that are considered being bad for search ranking, or ‘toxic’. These links come from spammy sites or are gained by trying to game the search engine algorithm.
Any links intended to manipulate PageRank or a site’s ranking in Google search results may be considered part of a link scheme and a violation of Google’s Webmaster Guidelines. This includes any behavior that manipulates links to your site or outgoing links from your site.
Content ages like fine wine. The longer your content has been active and shared, the more valuable it will be when it comes to your search ranking. Research from Oracle reveals that on a per dollar spent bases, content marketing generates more ROI than paid search ads, so for the startup company it makes sense for the owners to generate their own content, and for larger teams it makes sense to have someone in-house.
1. Define the purpose of your content
Smart marketing isn’t just about being a good writer, speaker, or media generator. It’s about being strategic about your production and understanding your buyer personas. Knowing exactly what your desired outcome is from an article is the first step to producing content.
Is it to generate brand recognition and industry authority? Or specifically to generate leads for a service or product in your business?
Your ability to take a piece of published content and get it to thousands of readers, within a specified time frame, will determine your success. Your readers will find you with an effective long-tail search, ideally in an organic way.
2. Focus your articles on data
If you back up your content with accurate data, people will see your content as more authoritative and will possibly share it on social media, thereby expanding your organic reach.
Essential to a successful content marketing strategy, which will produce accurate, high-conversion traffic is the creation of relevant, true, and quality content.
3. Tell a story
Your content should ideally connect with your audience’s pain points. perhaps you begin the introduction by describing the pain or questions that your customer is experiencing or asking.
It’s generally accepted that short content has a harder time ranking over a page with more substantial content, so you’ll want to have a content length of at least 400-500 words.
Use story telling to guide your audience from point to point.
4. Write a captivating headline
Google has made a lot of changes to their search algorithm, but one element has stuck around: the headline. Writing a killer headline for your content is one of the most important factors in getting your customers attention, and getting them to share it with their network. Even if you are ranking first for your desired keywords, it’s the headline that converts a view to a click. Clicks lead to sales. The key to writing a captivating headline is to invoke curiosity. Curiosity is what makes your customers click on your headline before moving further down the search result list. Some tips for creating a captivating headline include:
Know your audience.
Add numbers to your headlines. “5 Ideas To Remodel Your Kitchen” is better than “Ideas to Remodel Your Kitchen”.
Ask questions. Use what, why, how, or when.
Create a knowledge vacuum (combined with numbers). “These Are The 5 Best Ways To Remodel Your Kitchen”
5. Use numbers, images, and multimedia to illustrate your point
Written content is important, but it’s not for everyone. If you find a medium that works well for you, try to specialize and excel in it. Some people can’t or won’t write, but they do well in speaking engagements and interviews. Perhaps podcasting or videos are the way forward for them.
Here’s a list of possible mediums for content creation:
Helpful Informational Videos
Guides, How-to’s
Infographics (great for social media)
Checklists
Webinars and Demos
Podcasts
Ads
Google Ads are the linked text ads that show up at the top and bottom of Google’s search results pages. Google’s search results are like real estate, you can either own (by having great SEO optimized pages) or rent (by buying ads).
1. Understand what Ads are and when they are appropriate.
Google Ads are great for lead generation and for converting transactional searchers, but not, in my opinion, very valuable for informational content or building brand recognition.
Contractors typically use Google Ads to get new customers, but there’s another audience that could see your ads and help grow your business. Industry partners.
Construction companies rarely provide every solution that their customer requires. For example, you are a mid-size general contractor doing work for a local development firm. That development firm also needs services for engineering, permitting, legal services, and surveying. Companies offer those complementary services are potential partners.
2. Understand how Pay-Per-Click (PPC) works and how to structure your ad.
Also known as cost per click (CPC), PPC is a method that Google charges based on the number of times a searcher clicks on an ad. Another metric is cost per thousand (CPM), which is the number of views in thousands, regardless of whether the view results in a click. If you’re just getting started with your business, ads are a great way to generate traffic and sales quickly. You can give your site an immediate boost as you wait for your organic ranking to increase. This makes Google Ads an appealing strategy for new businesses to acquire leads and grow sales while building their content strategy.
Conclusion
From my personal experience, it’s easiest to integrate construction-related long-tail keywords in case studies and project profiles.
This serves two purposes. It creates useful content for both searchers and search engines, and it provides potential buyers with your track record of successful projects.
Search engine optimization is no longer about keyword stuffing or creating useless content. It’s about continually developing your understanding of your customers pain points and needs, then creating high-quality content that will help them.
Following the guidelines in this article will set you on the path to long-term success and organic traffic for your business. Write and speak naturally, as if you’re communicating with your customers one-on-one, and focus on answering the questions they are asking.
Online payments address one of the worst problems we are facing in the construction industry: Late payments. In every business, especially construction, where we have fluctuating revenue and upfront project costs, cash flow is king. If your cash flow is disrupted by multiple non-/late-payments, it could be disastrous for your business. Being unable to fulfill financial obligations, make payroll on time, and fund vital parts of your growth, can be the start of a downward spiral that is difficult or impossible to recover from. In a report by PWC (2019/2020 Working Capital Report), PWC outlines that it took an average of 83 days for a contractor to get paid. According to Glen Anderson, vice-president of Finance and Administration for Buildings at Edmonton-based PCL Construction, not all late-payments are for the same reasons, and it hits the subcontractors the hardest.
“GCs have historically had a very heavy hand to get their way with subcontractors. To give you an example, a contractor may withhold a million dollar payment on a subcontractor for a $50,000 issue just to get their attention. But that creates immense cash flow issues, and can force smaller businesses into bankruptcy for unfair reasons. So prompt payment is really to add a degree of fairness to the treatment of subcontractors by generals, and also by owners.” While we won’t be paying off $50,000 invoices with our credit cards any time soon, homeowners are incentivized by rewards, ease-of-use, and deferred payment to pay off their $5,000 painting job or roof repair using their credit card, which allows us to have the funds settled in 1-2 days at a small fee. A time-value exercise is appropriate here. What would you prefer? A. $4,900 tomorrow B. $5,000 1-3 months from now. (Or the risk of not getting paid at all.) It makes sense that we are one of the slowest industries to adapt to digitization and technological changes. Everything we build is tangible, in the real world. This is not a reason for us to stay on this path.
How many hours are lost in your business due to the lacking technological infrastructure to automate the hundreds of repetitive tasks your team is tasked with? Without automation, invoicing and payment approval wastes dozens of hours in your accountant’s day. Time that could be better spent growing your business. Adopting digital invoicing technology and online payment solutions help streamline your entire process and ensures your cash flow stays strong.
How can I get started with online payments?
There are several ways to start accepting online payments for your services. Here are three options: 1. Digital Invoices: Most modern ERP and accounting suites have an option for digital payment. All you need to do is enable payments by credit card and connect it to your bank. 2. Stand-alone Payment Gateways:Stripe is our gateway of choice. They have state-of-the-art payment integrations and allow you to create recurring payments (for rentals, subscriptions) and have a host of analytics that will help you optimize your revenue strategy. 3. Online Order Forms: By far the most effective way of gathering leads and converting them to paying customers. Your customer often knows exactly what they are looking for, and a simple calculator on your website will allow them to order your services and pay a deposit or in full.
Scaffold Stairtower Calculator for True North Scaffold + Insulation.
2. Automation is accelerating business and information transfer
The impact of a strong economy on a construction business is two-fold: as business volume increases, so does the need to keep up with the growing demand by hiring more employees, expanding retail and office space, and implementing innovative ways to reduce overhead costs.
Over the past decade, practically every industry has been experiencing fast, unprecedented, and industry-defining change in reaction to mobile devices and the internet, and they all benefited consumers with a reduction in price, increasing ease-of-use, and a better service experience.
For example, look at what Airbnb has done to the hotel and accommodations industry. Beyond the brilliance of taking a privately-owned, underutilized asset and turning it into a revenue generating asset for the owner, the costs for lodging and accommodation have plummeted for consumers.
Another clear example is what Uber has done in the transportation industry. They provided automated payments, frictionless and informative ordering, and a cheaper price. When was the last time you took a Yellow Cab? As technology evolves, so do the industries that surround us.
The only way to stay ahead of the competition today is to leverage technology to your advantage. Smaller construction companies have an advantage over larger competitors when it comes to adapting to new technology and economic changes. They are more agile and able to adapt to changing market conditions and new technology.
Automate repetitive tasks within your operations using API (Application Programming Interface, how different software communicates) connectors, reduce friction for your customer when it comes to ordering services and payments, and increase your service quality by providing lightning-fast response times and dispute resolution.
What the assembly line did for manufacturing, API’s and automation will do for modern businesses.
How can I automate my operations and prepare for growth?
Here are a few examples that we use in our business:
1. Software & Communications Automation: Zapier lets you connect your independent software so that an action in one application triggers and action in another. Zapier has a staggering amount of connections and the possibilities are nearly endless.
2. Website Automation & Digital Forms: Typeform turns clunky PDF forms & surveys into a powerful communication tool for your business. Create forms, surveys, quizzes to communicate with your customers and audience, customize anything, and validate your best ideas with your team and customers.
3. Automate Customer Support Workflow: With Zendesk, you can easily integrate key information from customers, business applications, and backend systems. And that makes it easier to collaborate and resolve customer inquiries quickly.
