This post is part 5 of a 6-part series analyzing marketing trends, technology, and the role of the marketer in an A&E firm. The previous 4 posts looked at the culture of an A&E firm and how it affects marketing success, trends in marketing and where A&E firms are struggling to keep up, how technology can be a competitive advantage, and how marketing should be viewed as a strategic investment.
Stay Focused on Your Win Rate
In this post, I urge A&E firm marketers to stay focused on the prize – their win rate. Nothing else really matters if you are not winning new projects. It is great to brand your firm, get PR, and have a beautiful web site, but it doesn’t bring revenue in the door or help your firm succeed unless it is contributing towards getting new jobs.
The main metric that needs to be focused on in an A&E firm is the win rate. This is calculated by taking the number of projects that you have won divided by the number of proposals you have submitted. If you are using a client relationship management (CRM) system to track your opportunities and proposal submittals, then your system may calculate the win rate for you.
A more valuable analysis of the win rate is to be able to break it down further and analyze your wins by lead marketer (if you have many people working on business development and proposals), department, type of project, type of client, geography, and other criteria. This can help you better understand what is working and what is not.
“Many people make the mistake of focusing on activities rather than results.”
Many people make the mistake of focusing on activities rather than results. They measure how many people they met at networking events, how many visitors hit their web site, or even how many new opportunities they uncovered. But again, if this activity does not eventually lead to a contract, then it was potentially a waste of time. Activities alone do not lead to sales – only the right ones do!
Many factors contribute to a high win rate including how leads for projects are obtained, how opportunities are managed and followed up on, whether the right projects are being pursued, and the quality of the proposals. One other factor can be the quantity of proposals. Some firms propose on too many projects that they don’t have a good chance of winning which will lower their win rate. Others are not able to bid on enough projects because of how cumbersome it is to prepare a submittal.
All of these factors should be evaluated in terms of how they affect your win rate, and whether they can be improved to increase the odds of winning. The Zweig Group 2012 Annual Marketing Survey of Architectural, Engineering, Planning and Environmental Consulting Firms reports that the average win rate across all sectors in the A&E industry is $37.5%. This can give you some basis of comparison when analyzing your own win rate. The report further breaks down average win rates by size of firm, region, etc. You can purchase this report at https://zweiggroup.com.
One of the tools that can improve overall marketing and firm success is having an effective Go/No-go process. A good Go/No-Go process includes a consistent evaluation of every project pursued to that ensure the firm has a good chance of winning the project and that the project is going to be a successful one for the firm. This includes looking at many factors including your firm’s relationship with the client, your qualifications, whether the firm can make money on the project, and your ability to do a quality job and meet the client’s expectations. In many cases this process can be automated and a scoring system established to help make the right decision about which projects to pursue.
It is important to remember that each proposal that you prepare costs your firm money. For this reason, it is important to view each decision to submit on a project as an investment. The expression opportunity cost is particularly relevant in this analysis, because for each opportunity you pursue, you are foregoing the ability to bid on another, or invest the money in other areas of the business that will provide a greater payoff.
In addition to tracking your win rate, it is important to analyze other metrics in the business that contribute to marketing and sales success. If there are not enough projects to bid on it really doesn’t matter what the win rate is. Getting the right number of good project leads is critical to a high win rate. Having systems in place to track leads and understanding where your best leads are coming from is critical to effectively analyzing marketing performance. It is critical to continue to replenish your pipeline with new projects to bid on, and be able to forecast potential wins to help the company plan for potential hiring or downsizing in the following 6 to 12 months.
It is critical to the success of your business to track your win rate and other key metrics such as leads, etc.. Understanding the numbers behind your marketing and sales efforts is not difficult. Having an effective Go/No-go process, and evaluating the other factors that contribute to your firm’s success is part of the A&E firm marketers job, and ultimately the basis that they will be judged on.
How does your firm measure marketing success?
Check out the other posts in this series –
In Part 1 – We look at the culture challenges for A&E firms today.
In Part 2 – We look at the trends that are shaping the marketing efforts for A&E firm marketers today.
In Part 3 – We look at how technology can help marketers to increase the firm’s win rate
In Part 4 – We discuss the benefits of viewing marketing as a strategic investment
In Part 5 – We look at how to measure the return on investment from marketing efforts
In Part 6 – We give some tips for marketers on how to add more value to their firm’s success.
Cash is King Webinar
Managing Cash Flow in a Down Economy
Date: Wednesday, August 19th, 12:00pm ET
The average days to collect cash in the AEC industry is between 60 to 120 days. In this web training we will examine the complete project lifecycle to understand how cash flow can be increased when the economy is uncertain. Participants will gain valuable tips to improve cash flow by improving timesheet practices, reducing the billing cycle, and improving client relationships and collection practices.
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