Bid hit rate is the share of the projects you price that you are awarded. On its own it's just a percentage. Combined with your cost per bid and the gross profit of an average award, it tells you what each invitation to price is worth, and therefore how much you can sensibly spend to get more of them. This guide walks through the calculation with example numbers you can replace with your own. It is a planning method, not financial or bidding advice.
The four numbers you need
Pull these from the last twelve months of records. Rough is fine to start; precise is better later.
- Bids submitted (B). Count every priced submission, split into invited bids and open tenders.
- Awards (A). Projects you won from those bids.
- Average gross profit per award (G). Contract value minus direct costs (labour, materials, subtrades, equipment), averaged across awards.
- Cost per bid (C). Estimating hours times a loaded hourly cost, plus any plan printing, site visits or software costs per bid.
Your hit rate is A divided by B.
A worked example
Here is an example for a mid-size subtrade. Replace every number with yours.
| Item | Example |
|---|---|
| Bids submitted in 12 months | 60 |
| Awards | 12 |
| Hit rate | 20% |
| Average contract value | $140,000 |
| Average gross margin | 17% |
| Average gross profit per award (G) | $23,800 |
| Estimating time per bid | 14 hours at $75 loaded |
| Other costs per bid | $150 |
| Cost per bid (C) | $1,200 |
Total gross profit from awards: 12 × $23,800 = $285,600.
Total cost of bidding: 60 × $1,200 = $72,000.
Value of one bid opportunity = (hit rate × G) − C = (0.20 × $23,800) − $1,200 = $4,760 − $1,200 = $3,560.
That last figure is the number that matters for marketing. On average, each extra invitation to price is worth about $3,560 in gross profit after estimating costs, at this company's current hit rate.
What marketing can change
Credibility marketing affects three of the four numbers, and each one moves the result differently.
More invitations
If a builder relationship program adds 15 invitations a year at the same hit rate, that is 15 × $3,560 = $53,400 of extra gross profit after bidding costs.
A better hit rate on the same bids
If a stronger prequalification package lifts the hit rate from 20% to 24% on 60 bids, awards rise from 12 to about 14. Two more awards at $23,800 is $47,600, with no extra estimating cost.
Larger projects
If project pages and search help you get invited to bigger scopes, average gross profit per award rises. At $30,000 instead of $23,800, the value of each bid opportunity becomes (0.20 × $30,000) − $1,200 = $4,800.
The point isn't the specific numbers. It's that you can now compare any marketing cost against a dollar value you calculated yourself.
Testing a marketing budget
Take a marketing plan's annual cost and divide it by the value of one bid opportunity. That gives the number of extra invitations, at your current hit rate, the plan needs to produce to break even.
Using the example and a Growth plan on annual billing from our pricing page:
- Annual plan cost: $1,499 × 12 = $17,988 (plus GST/HST)
- Value per bid opportunity: $3,560
- Break-even: $17,988 ÷ $3,560 ≈ 5 extra invitations a year
If you think the plan can reasonably produce five or more extra invitations of similar quality in a year, it's worth considering. If your value per bid is much lower, say $600, you would need 30 extra invitations, and a different plan or no plan may be the better choice for now.
The hidden cost: bids you shouldn't have priced
Many contractors improve their results more by bidding less. Every poorly matched bid has the full cost per bid and a hit rate close to zero.
Go back through last year's bids and mark each one:
- Good fit: your project type, your size range, a builder or owner you want
- Stretch: possible, but outside your usual work
- Poor fit: wrong type, wrong size, or a buyer known mainly for price-shopping
Calculate the hit rate for each group separately. It's common to find that good-fit bids win at two or three times the rate of poor-fit bids. If so, declining poor-fit invitations frees estimating time for the bids you actually win, and your overall value per bid rises without any new marketing.
A quick version for a general contractor
The same method works for a GC, with one change: your cost per bid usually includes subtrade solicitation and more estimating hours, so it is higher. Suppose a GC prices 25 projects a year, wins 5, earns $60,000 of average gross profit per award, and spends $4,500 per bid in estimating time and costs. The value of one bid opportunity is (0.20 × $60,000) − $4,500 = $7,500. Fewer, larger bids make each invitation more valuable, which is why credibility with owners and design firms matters so much at that level.
Common mistakes
- Counting revenue instead of gross profit. A $500,000 award at 6% margin is worth less than a $200,000 award at 20%.
- Ignoring estimating time. If the owner does the estimating at night, that time still has a cost. Use a realistic hourly figure.
- Mixing invited bids and open tenders. Their hit rates differ widely, and the average hides it.
- Judging marketing in the first quarter. Builder relationships and search take months. Track leading signs, such as replies and meetings, until awards catch up.
- Never recalculating. A rolling twelve-month figure, updated quarterly, keeps decisions grounded.
Putting it to work
Write your four numbers on one page and keep it next to your estimating schedule. When anyone, including us, proposes a marketing spend, ask how many extra invitations or what hit-rate change it needs to break even, and whether that's realistic.
If you want help gathering the numbers, that's part of our first consultation; the contact page explains what to bring. For the steps that create more invitations in the first place, read how subcontractors get on builder bid lists.
Frequently asked questions
What is a good hit rate?
It depends on your trade, market and how selective you are, so compare yourself with your own history rather than a published average. A rising hit rate on invited work is a strong sign your credibility is improving.
Should we count bids we were invited to separately from open tenders?
Yes. Invited bids and open public tenders behave very differently. Track them in separate columns or the averages will mislead you.
Is this financial advice?
No. It's a marketing and business planning method for testing whether a marketing investment can pay back. Decisions about pricing, financing and tax belong with you and your accountant.
How often should we redo the numbers?
Every quarter is enough for most contractors. Use a rolling twelve months so one unusual project doesn't swing the result.