{{TotalFavorites}} Favorite{{TotalFavorites>1? 's' : ''}}

Competition is fierce. The focus these days is on cutting costs, and every company claims their services are “the best.” So how does a company come out on top and avoid cutting fees to compete in today’s marketplace? The answer is in taking a different approach than everyone else, and finding ways to promote expertise that adds value above and beyond the standard scope of a contract.

Determine the Win Rate

It is great to create the brand, get PR and have a beautiful website, but it doesn’t bring revenue in the door or lead to success unless it contributes to getting new jobs. A “win rate” is the main metric on which a company should focus. Win rate is calculated by taking the number of projects won divided by the number of proposals submitted. If using a client relationship management (CRM) system to track opportunities and proposal submittals, then the system may calculate the win rate on its own. Many factors contribute to a high win rate, including how leads for work is obtained, how opportunities are managed and followed up on, whether the right jobs are being pursued and the quality of the proposals.

Bid Smart

Another question to ask is, “Are we pursuing the right jobs?” In an industry where winning the bid is all important, it is easy to overlook some vital parameters in deciding whether a company should be bidding on a specific job in the first place. Not all jobs are created equal and knowing how to bid smart by finding projects that are a good fit both professionally and financially is key to ultimate success. The “old school” approach to marketing—bid on as many proposals as possible—is not the most prudent way to do business.

A good place to start is by analyzing the opportunity management process. Talk to team members who have any role in the marketing, business development or sales process. Following are some key questions to ask.

• How is new work found?
• Is there a go/no-go process? If so, how is it done and who is responsible for using it?
• How is the data for potential work tracked and managed? Is there a written process for managing opportunity data? Who is responsible for tracking and updating the data about open opportunities?
• Is there a documented sales process?
• Are probabilities used to estimate which bids will be successful? Can we analyze the types of projects with which we have better success?
• Is win-loss data being tracked to analyze who we are losing to and why?

What does it cost us to lose a potential project? For the most part, it is the lost revenues and profit from the project itself. However, it also is losing investment in the proposal process, the cost of not having staff at full utilization, and the portion of the project revenue that is covering estimated overhead. When construction firms bid on jobs that they have little chance of winning, they end up increasing overhead costs by investing time on something that in the end will not be profitable. So the key is to bid smart and win the projects that complement the company’s strengths.

Be in the Right Ballpark

Creating good estimates is another key in realizing a profitable project. The estimate ultimately dictates the scope of the contract, budget and process for delivering the project. If there are any flaws in the estimating process, the company will experience losses from budget overruns. The major problems commonly seen in the estimating process are:

• lack of consistency among estimators;
• inadequate level of detail in how hours are estimated by phase or task;
• using old or inaccurate information;
• failure to build in a margin for contingencies; and
• using unstructured processes or lack of systems for developing and calculating estimates.

Because all projects start with an estimate, effective processes must be put in place to ensure that the rates, structure, and assumptions used to calculate the estimate are valid and accurate.

Communicate

So once the company has decided which contracts are worthwhile to pursue and the estimating process is in check, what can it do to win the job? One strategy that goes along with the whole concept of differentiation is to find ways to get your company public relations (PR) attention. This could be articles in trade magazines, speaking opportunities, and even radio and TV interviews. It is vital to understand strengths and determine the company’s areas of expertise. Then it can develop a strategic plan through content marketing and public relations to advance its brand and people by creating opportunities for them to get in front of potential customers to build demand. And to ultimately win the all-important bid.

To get started on the road to winning more work, figure out your company’s win rate, make sure you are bidding on jobs you have a good chance of winning, tighten up your estimating process and start spreading the word about your past successes, your strengths and your expertise.