What’s the Big Deal About Hit Rates?

Do the Math

Most firms pay only casual attention to their hit rate for winning new work.  Even those who know their hit rate don’t have any kind of strategy to improve it.  That is a very big mistake.  I believe tracking and improving your hit rate is an essential benchmarking and management tools for AEC firms.  Here’s an example of just how important your hit rate is:

Let’s say your firm is a construction company that needs to bring in about $100 million of new work every year.  Let’s also say you have a hit rate of 25% for winning the proposals you rely upon to get that work and you spend about $20,000 on each proposal.  If your average project size is about $10 million, you would have to make 40 proposals and spend $800,000 to do it.

What would happen if you increased your hit rate even modestly, say from 25% to 33%?

• If you were still spending $800,000 to make 40 proposals, your revenue would jump from $100 million to over $130 million.  That means you would gain $30 million in new revenue—at no cost!
• Or, if you were content to stay at $100 million a year, you could be more discerning and pursue only the most profitable and attractive work.  At the same time, you would REDUCE the overhead you invest in chasing new work by $200,000 a year.

Remember—these incredible results are from only a modest improvement in your hit rate.  There are a number of things you can do to dramatically improve that rate and get results that will blow you away.  Don’t worry if you’re clueless about where you should begin.  Help and resources that you can turn to abound.  One easy thing you can do is watch this blog space for ideas. 

Ken TichacekContributor to Industry Speaks Ken Tichacek is just one of the many consultants  in the Industry Speaks™ community.  To find him and learn more, visit us at www.industryspeaks.com or visit  Think Like Your Clients LLC at ken@thinklikeyourclients.com