Updated October 2024
For architecture, engineering, and construction (AEC) firms aiming to secure the most valuable projects, success requires a broader perspective. Instead of relying solely on win rates, firms should establish key performance indicators (KPIs) that track both the quality and profitability of the work. By leveraging a more holistic metric like capture rate, AEC firms can gain a clearer picture of their business development efforts, ensuring they focus on long-term growth and sustained success.
Success is often measured by win rate—the ratio of deals won to those pursued. However, Unanet’s AEC Inspire Report introduces another critical metric: capture rate. This metric offers a more comprehensive view of a firm’s performance by focusing not just on the number of wins, but on the value and profitability of those projects, giving a clearer understanding of overall business success.
Let’s explore what capture rate is, why it plays a critical role in your firm’s success, and how you can leverage it to gain a competitive edge. By fully understanding this key metric, AEC firms can not only measure win rates but also assess the true value and profitability of each project they secure.
Despite its value, capture rate often goes unnoticed in many firms. More than just recording wins, it measures the monetary value of those wins compared to the total bids made. This adds a critical layer to assessing success, shifting focus from simply counting wins to understanding the financial impact of each project secured. By evaluating the dollar value of wins, firms can assess the quality of their projects and make better strategic decisions for growth.
A higher capture rate directly influences your firm's profitability by highlighting which projects bring the most value. For example, a few highly profitable projects may outweigh the value of several smaller jobs. By focusing on your capture rate, you gain deeper insights into the effectiveness of your business development efforts and the profitability of the projects you're winning, helping you make more strategic decisions for sustainable growth.
While win rate can be misleading due to selective targeting of smaller, easier-to-win deals, capture rate offers a more accurate measure of performance. When combined with other key metrics like profitability, direct labor multiplier, and utilization, capture rate provides a comprehensive view of a firm’s growth and overall business health, ensuring that you focus on winning projects that drive long-term success.
Capture rate identifies your firm’s “sweet spot”—the projects that deliver the highest value for the effort invested. By targeting these high-value opportunities, AEC firms can secure work that is sustainable and more engaging over time. Ultimately, capture rate helps ensure a consistent, profitable growth trajectory that aligns with your firm's long-term goals.
Focusing on capture rate encourages a more strategic approach to business development. By prioritizing potential profitability over just the likelihood of winning, firms can bid smarter, choosing markets and projects that align with long-term goals. This targeted approach makes business development efforts more intentional and results-driven, helping firms secure the right projects for sustained success.
Realizing the importance of capture rate is only the first step. It’s equally critical to implement systems that can effectively track and analyze this data. By doing so, firms can make data-driven business development decisions, turning insights into actionable strategies. Accurate capture rate data not only deepens your understanding but also uncovers opportunities for profitability and growth, ensuring your decisions are backed by concrete metrics.
When used effectively, capture rate becomes a guiding tool, lighting the way to sustainable growth in the competitive AEC landscape. Prioritizing capture rate doesn’t mean ignoring win rate—it complements it. Think of capture rate as an additional lens, providing a more complete and accurate view of your firm’s position, potential, and profitability.
Stay tuned for the next article in our series, where we’ll explore additional metrics to help your AEC firm drive sustainable growth. In the meantime, catch up on previous posts in this series for more insights on improving your firm's performance.
For deeper insights into what top AEC executives are prioritizing, download a free copy of the latest AEC Inspire Report. This report provides valuable data on business development metrics, technology adoption, and profitability trends in the AEC industry.