HAPPY WITH YOUR BID-HIT RATIO? THESE FOUR TACTICS WILL HELP PUT A SMILE ON YOUR GAME FACE
With signs of economic recovery appearing in many areas, there is a frenzy of bidding as jobs become available. Some companies are cutting costs to the bone; others promise faster completion dates. It’s interesting because most companies don’t want low-cost projects on a regular basis because it’s hard to maintain margins. And using speedy completion as a differentiator can quickly work against you should things not go according to plan. Consider these smart tactics for improving your bid-hit ratio and staying profitable.
Stop going after projects you have little or no chance of winning.
The old-school approach is based on volume. Bid on as many jobs as possible and you are sure to win a sufficient number to see a profit. Unfortunately, this approach is like shooting lots of bullets at a target with a blindfold. You will randomly get some hits, but it will be because of random luck—not because you carefully took aim. Take a look at the types of projects you consistently do well on. What characteristics do they share? Document them. Use those as parameters for the types of jobs that you are going to actively pursue. Use the data that machine technology makes available to you. Those numbers are real. They can guide to you bigger margins.
Create a bid/no-bid process.
Based on the types of jobs at which your company excels, create a go-no go standard. Here’s the hard part—then follow it. Deciding not to bid on the first potential job is always the hardest. But it’s the smartest. Instead of having estimators spending too little time on multiple bids, they will spend more time refining proposals for work you really want and your company can deliver effectively. Stick to a standard; just say no to bids that don’t fit your company.
Invest in estimating the way you do your work fleet.
Some of the biggest problems identified in the estimating process come from inadequate attention to detail:
- Lack of consistency with other industry bids
- Inadequate level of detail as to how the numbers were arrived at
- Clear use of dated or incorrect information
- No strategy for contingencies
Each of these estimating gaps can be fixed with an investment in training, process and calculation. By making a solid investment in your estimating process, you can set your company apart because your estimates will share the same high quality as your work.
Don’t forget the people part of bidding.
Whenever you have the opportunity to ask questions or meet with prospective customers, do so. On private jobs, make a presentation of your proposal the standard so you can present your approach and answer questions. Even if you can’t present a proposal, take steps to learn as much as possible about the selection process and how bids will be evaluated, so you can adapt your bid appropriately.