Do you know which construction projects you are most likely to win when you submit a bid? Do you know what your bid hit rate is? Do you know where most of your leads come from? Do you know which projects you should stay away from?
All of the questions above can be answered when contractors track bid results. The more information you track, the more detailed your analysis and the more you’ll learn. But even if you’re only tracking bid wins and losses, there’s a great deal you can learn that can help you improve your bid success rate and increase profits.
What projects to bid
Tracking bid results shows you what types of projects you are most successful at bidding. This is important because it tells you what you’re doing right and can help you make better decisions about which projects to bid in the future. You don’t want to waste time bidding on a project when you know you won’t be successful.
Track as many characteristics of each job as you can to help narrow down your success factors. This may include things like public versus private work, remodeling/new construction, project scope, design type, or even the number of bidders on the project. All of these factors will help you determine the type of project you’re most successful at bidding.
It’s a natural tendency to think that we’re more successful at bidding projects than we actually are. We only remember the wins, and not how many losses it took us to get there. Knowing your true bid success rate helps to project future income and workload.
Your bid success rate or bid hit rate is the ratio of how many unsuccessful bids you submit for each one successful bid. For example, say you win one bid for every ten you submit. Your bid hit rate is 10:1 or 10%. If you bid $1,500,000 in work over the next quarter, you can predict that you’ll win about $150,000. There’s no industry standard to gauge your success by, but you should always strive to improve your rate.
You can gain a lot of insight into where the market is by tracking your bid results. Follow pricing trends and measure how much competition you’re seeing on each bid. Tracking pricing allows you to know when it’s time to raise your rates, as well and when you need to be more competitive. The level of competition on each bid shows you how busy everyone else is, which you can use to your advantage.
Tracking bids allows you to find out how much work you’re actually bidding in any time period. You want to measure this by dollar volume and the number of projects, so you can compare activity over time periods, like quarters or years. Use this information to determine key data points like your average bid amount or average number of projects bid. You can also compare bidding volume by estimator to make sure the work is evenly spread out or see who your top performers are.
When combined with your hit rate, you can use your bidding volume to project how much work you can expect to see in the next few months. Multiply your success rate by the volume of work you bid in a quarter, and you can use this figure to estimate your upcoming workload.
By recording information about each project you bid, including the project team members and the source of the lead, you can begin to analyze the success of your marketing efforts. You may find that certain architects or general contractors are referring projects to you on a regular basis. You’ll want to cultivate these relationships and thank them for giving you the opportunity to bid on the work.
By tracking the source of your incoming leads you can determine the effectiveness of your marketing efforts. You’ll know whether your advertising efforts have been successful, based on where people saw your information and what caused them to contact you.
Bid tracking offers insight
Tracking bid results is a great way to learn more about how successful you are, as well as give you performance indicators that can help you predict your future workload. A simple spreadsheet is often enough to track wins and losses and project information. Bid estimating software can also help track your bidding success. Use these tools to analyze your best and worst projects so you know what type of work to bid next.