John Kenney, CPRC, CEO, Cotney Consulting Group
In the fiercely competitive roofing industry, contractors face numerous challenges, from fluctuating material costs to increasing competition. Many roofing professionals are under constant pressure to underbid to secure projects, often sacrificing profits in the process. While submitting as many bids as possible may seem like the only path to success, a more innovative approach focuses on understanding and optimizing your numbers. One of the most critical metrics in this process is the bid-hit-win ratio, which clearly shows your bidding strategies’ effectiveness and identifies the jobs that lead to profitability.
Simply put, your bid-hit-win ratio is the percentage of bids won compared to the total number of bids submitted. This metric serves as a compass, guiding you to the right opportunities and helping you avoid the pitfalls of chasing low-margin or overly competitive projects. Contractors who track and analyze this ratio can refine their strategies, focus on the right clients and ultimately achieve higher profitability. Whether you specialize in residential roofing, commercial projects or niche services like green roofs or metal systems, knowing your numbers will help you grow your business more effectively.
Understanding your bid-hit-win ratio begins with grasping its importance. It’s a simple yet powerful indicator of whether your bidding process is aligned with your business goals. A low ratio might indicate that you’re bidding on the wrong types of projects or that your proposals are not competitive enough. A high ratio suggests that you’re targeting the right opportunities and are in sync with your client’s expectations. For example, a roofing contractor focusing on large commercial projects might have a lower ratio due to the competitive nature of that market. However, the high value of each contract could still make it worthwhile. Conversely, a contractor specializing in residential reroofs may aim for a higher ratio, as these jobs tend to have quicker turnaround times.
Establishing benchmarks for your bid-hit-win ratio is crucial. While there’s no universal standard, many successful roofing contractors aim for a 20 to 25 percent ratio. This range ensures you secure enough projects to keep your crews busy and your revenue flowing while avoiding overextension. However, the ideal ratio will vary depending on your business model and market conditions. A contractor working primarily on public bids may see a lower ratio due to the sheer number of competitors and low bid requirements. In comparison, a contractor with strong client relationships and a reputation for quality may consistently achieve a higher ratio. Tracking your numbers allows you to set realistic goals and continuously improve your performance.
Improving your bid-hit-win ratio requires a deliberate and strategic approach. The first step is to target the right projects. Not every job is worth pursuing and spreading yourself too thin by bidding on every opportunity is a surefire way to waste time and resources. Focus on projects that align with your strengths, whether TPO roofing, residential reroofs or complex commercial builds. For example, if you’ve historically excelled in metal roofing for higher-end homes, double down on that niche rather than chasing unfamiliar opportunities.
Another critical element is refining your estimating process. Accurate estimates are the backbone of successful bids and mistakes can quickly erode your margins. Use reliable software tools to streamline your estimating process and ensure all costs – materials, labor, overhead and contingencies – are accounted for. A detailed, well-structured estimate builds trust with potential clients and reduces the likelihood of scope creep during the project.
Building strong relationships is another proven strategy to improve your bid-hit-win ratio. Clients are more likely to work with contractors they trust, so cultivating relationships with property managers, general contractors and repeat customers can lead to more negotiated contracts. Negotiated work often has less competition, giving you better chances of winning the job at a profitable price. Furthermore, maintaining open and consistent communication with clients
throughout the bidding process can set you apart from competitors who may only focus on price.
The presentation of your proposal also plays a vital role in winning bids. A professional, polished proposal outlining the project scope, timeline, materials and warranty details demonstrates your expertise and attention to detail. Clients are more likely to choose contractors who instill confidence through clear and comprehensive documentation.
Tracking and analyzing your performance is essential to continuously improving your bid-hit-win ratio. Implement a system to record every bid, noting details such as project type, location and client. Regularly review this data to identify patterns and trends. For instance, you might find that your success rate is higher for projects within a particular geographic area or with specific types of clients. This insight lets you focus your efforts where they’re most likely to yield results.
Consider the hypothetical case of ABC Roofing, a contractor specializing in residential and commercial projects. Initially, their bid-hit-win ratio was 1:10, meaning they won only one job for every ten bids submitted. After analyzing their data, they discovered that the success rate of residential reroofs was significantly higher than that of large commercial projects. Narrowing their focus and optimizing their estimating process improved their ratio to 3:10 within six months. This shift increased revenue and a healthier profit margin, showcasing the transformative power of tracking and refining your ratio.
While improving your bid-hit-win ratio is essential, avoiding common pitfalls is vital. One major mistake is overbidding to secure work. Contractors often lower their prices too much in order to win bids, leading to razor-thin margins and financial strain. Instead of competing solely on price, focus on demonstrating the value of your work through quality, reliability and expertise. Another common error is failing to seek feedback from lost bids. Understanding why a client
chose a competitor provides valuable insights that can improve your future proposals.
Mastering your bid-hit-win ratio is crucial to building a profitable and sustainable roofing business. By understanding your numbers, targeting the right projects, refining your processes and leveraging strong relationships, you can transform your approach to bidding and achieve better results. Start tracking your ratio today and use it as a guide to make data-driven decisions, improve your profitability and seize the best opportunities in the market. In an industry as competitive as roofing, a strategic approach to bidding is not just an advantage, it’s a necessity.
John Kenney, CPRC has over 50 years of experience in the roofing industry. If you would like further information on this or another subject, you can contact John at jkenney@cotneyconsulting.com.
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