In the previous post, I reported on Society for Marketing Professional Services (SMPS) Foundation research about hit rates. The report provides some industry-wide benchmarks, indicating that on average about architects, engineers and contractors report about four in 10 “wins” — with contractors on the lower side and engineers on the higher side
The next question, though, is whether you can rely on these industry-wide benchmarks to determine the hit rate value as a Key Performance Indicator (KPI), and the answer here is more nuanced. This is because you may be measuring very different types of opportunities, jobs and markets — and a great “hit rate” in one circumstance may be not so good in another. (Consider if you have a practice that wins the bulk of its work sole source from established clients — anything less than a 90 per cent “hit rate” may signal serious problems if it is a decline from previous numbers.)
The answer to this problem is to measure your hit rate effectiveness by different categories and circumstances (you can measure by teaming partners, regions, sectors, and existing client relationships) and regard the hit rate tool as an internal comparison metric more than worry about the industry-wide benchmarks.
However, this doesn’t mean you shouldn’t take the overall numbers seriously. If you are well above the norm, and you are relying on a few loyal clients, you might want to increase your business development efforts to expand your base. Your numbers will decline, but the new business you acquire will ultimately help you in achieving greater security.
And if your hit rates are well below the norm, you may wish to review your go-no go data, and (after slicing and dicing to find out which subcategories are blowing your numbers through the floor), figure out whether you need to redirect your marketing methods, focus, or presentation practices.
A final note on this topic: While there are nuances and sub-categories, the hit rate is a powerful, simple, metric. The SMPS report indicates that only about a third of AEC businesses and practices are tracking hit rates. This should change. It isn’t hard to begin tracking hit rates, and it isn’t too hard (assuming you keep basic records) to build a recent history to start your comparisons.
If you are an SMPS member, you should certainly download the report for free. If you are not a member, well, you can join the association or pay for the report. It is worth the money.