These 3 overlooked marketing metrics also happen to generate revenue.
1. Proposal win rate based on relationship depth
2. Time-to-trust conversion
3. Project reference multiplier
In the AEC industry, our margins are SLIM. In 2024, the average net profit margin was 2.16%
Yikes.
While these metrics aren't going to improve your margins overnight they will start to give you insights into how your firm is performing.
And improving that performance can lead to winning more efficiently. And THAT leads to better margins.
These are the three most overlooked metrics that can be used in marketing and business development within the AEC industry.
The first one is proposal win rate by relationship depth. AEC firms are using a proposal win rate, but whenever you actually look deeper into the relationship depth, it's gonna give you more information.
And what I mean by that is, you want be able to track your win rate for cold prospects versus warm referrals versus repeat clients. And if you find that you're spending more time and not winning proposals for cold prospects, you may have to change your strategy of how you go after those cold prospects. Having that kind of information is a gold mine for understanding how well your company is doing winning proposals by the relationship debt.
The second one is time-to-trust conversion. In the tech world, you track from time-to-purchase. However, in the AEC industry, the time-to-trust looks like how often is someone calling you to say, "Hey, will you submit for this proposal?" instead of finding something out there on the street and then you submit for it.
And you may not have a chance to win that project you found out in the wild because you don't have a relationship with that company yet or that client. The time-to-trust conversion can take 18 to 24 months, sometimes longer, sometimes shorter. Being able to track that is going to allow you to optimize what you do from the first point of contact with a prospective client to where they start to reach out to you for advice, for guidance, to submit for a project that they have coming up.
That third one is the project reference multiplier, and that really means how many clients are actually referring you to others. This metric is a gold mine because again, it can tell you how you're doing in your marketing and business development efforts with your current client base. Then how well are you doing on a referral program and really asking for those referrals and the clients that want to make a referral trust you.
That is a key indicator that they could be a client for a very long time. If they don't like you, they don't make the referral. And if they do like you, they're gonna make plenty of referrals for you.
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