Estimators: Improve your bid-hit ratio via Sage CRE
Reprinted with permission from Sage
Top 5 Essentials of a Winning Strategy
Contractors often think if they bid enough jobs to the same customers, eventually they’ll get their share, but this won’t get you the positive results you want. As with fishing, you must change your estimating and bidding strategies to get the big ones to bite more often. In the end, your goal should be to improve your bid-hit ratio. —George Hedley, owner of Hedley Construction, Hardhat BIZCOACH
1. Know and track your bid-hit ratio
Do you know what your bid-hit ratio is? If not, you’re missing out on an important way to measure the success of your bidding process. Construction firms of all sizes can benefit from making that simple calculation to compare the number of bids sent out to the number of jobs won. And, as a general rule of thumb, lower ratios indicate a higher rate of success.
But it shouldn’t stop there. Why? Because even the elusive 1:1 bid-hit ratio doesn’t guarantee your firm’s profitability or success. Many contractors overlook the importance of following their bid-hit ratios over time and project type. However, if you stick with it, this analysis will provide valuable information that can help you improve your odds. Tracking your bid-hit ratio can reveal where to focus your bidding efforts in the future—and the projects to avoid—so you can optimize your bid strategy.
2. Understand your true job costs
To improve both your bid-hit ratio and profitability, you need to clearly understand your true job costs. Stiff competition means you have to nail the price of your bid so your firm not only wins the work, but also maintains a nice profit margin.
Using job cost accounting software, you can get the information you need about job costs—from labor and materials to overhead and profitability. Get project estimates as close to the final job costs as possible by looking at current data and related details.
3. Add some face time during the bid process
Your estimator has access to all the requirements and numbers needed to prepare the proposal. So what’s missing? Sometimes there’s no substitute for personal interaction when cultivating a business relationship. One way you can improve your bid strategy is to add a meeting—preferably face to face—with the decision maker.
4. Give your bids an extra boost
While price is always important in the bidding process, you might be surprised at what other little extras could make the difference in improving your bid-hit ratio. Once you’ve met with the decision maker, add that
compelling differentiator to your proposal. In addition to offering a competitive price, demonstrate how your firm will go above and beyond expected levels of quality and service. And be sure to describe
what specifically qualifies your firm to be the best for the job.
5. Improve accuracy and speed
To improve your bid-hit ratio and overall bid strategy, you need to build bids quickly, accurately, and confidently. Modern estimating software is built using best-practice standards and can improve the
speed of preparing estimates by 50% or more.
Want to catch more fish? Click to set up a free estimating demo!