This post is an excerpt from The AEC Metrics Handbook: A Guide to Measuring Your Firm's Health. Clients can find a free copy in the Support module of Cosential.
Hit rate, or the ratio of jobs won to jobs pursued, is one of the most common and useful metrics for marketers and business development professionals. When you visit a doctor for a physical, she will likely use different tools to assess various aspects of your health. By focusing on specific facets of your firm and evaluating their hit rate, you can gain deeper insight into where you are winning the most work or falling behind. Eventually, a year-to-year analysis of each area of your firm will reveal valuable information about trends in your organization and give you the opportunity to benchmark against industry standards.
Useful Hit Rate Reports
- By Quantity - How many jobs do you win of those you pursue? This one is fairly self-explanatory; it’s the most common type of hit rate report. Be sure to define what a “job pursued” means. Is it all confirmed opportunities the firm considers pursuing or only the opportunities where a proposal is submitted? Choose the measurement that makes the most sense for your organization.
- By Estimated Income - Depending on your firm type, this might be estimated construction cost or estimated fee. Either way, consider measuring the total amount of income your firm pursued against how much you won. In many ways this can be more informative than the hit rate report by quantity, since the value of different projects can vary dramatically and this variation will reveal how you’re stacking up against revenue goals.
- By Organizational Structure - Breaking down the overall hit rate by your firm’s organizational units enables you to analyze the performance of each one. For example, you might look at hit rates for each office, market sector, practice area/discipline, or service within your firm.
- By Personnel - If your firm has multiple staff members with business development responsibilities, then tracking which opportunities they are associated with will allow you to see each business developer’s hit rate.
- By Submittal Type - How successfully does your firm prepare different kinds of submittals?
- Project Type - Project type (healthcare, commercial, academic, public infrastructure, etc.) is another useful way to delineate your hit rate analyses. Depending on your firm, you may already be tracking this hit rate by comparing organizational structures. Do you win most projects of a certain type? Does your firm go after project types that you consistently lose? This can be especially interesting when reviewed year to year, as it can reveal trends in the industry at large.
After implementing Cosential, Sunrise Engineering was able to use different hit rate reports to understand which types of projects they win most frequently and adjust their business practices accordingly. Amy Villasana-Moore, Arizona Manager of Marketing and Business Development elaborates,
“One of the first analyses conducted was of our firm’s overall Hit Rate. We were very pleasantly surprised by a high win rate in comparison to losses, but were not pleased to discover that our losses represented nearly twice as much in potential revenue. The data revealed that we had a definite “sweet spot” for wins, which represented the small to mid-sized contracts, but that we were falling short on winning the larger contracts. As a result, profit center managers were coached by their executive leaders to focus more exclusively on their “sweet spot” contracts in an effort to shore up the gap. In addition, a much more stringent Go/No-Go process was put into place to prevent managers from making emotional pursuit decisions on contracts exceeding specified values.”
As Sunrise Engineering’s example makes clear, tracking hit rates can provide insights that help your firm make smarter business decisions. Once you’re comfortable with the basic hit rate reports described above, you can also begin to dig deeper with some of the refined metrics covered in The AEC Metrics Handbook. Grab your free copy to keep reading!
Ready to learn how Cosential can help you track these metrics and more? Schedule a demo today.