What’s the most important number in your business life? Your hit ratio—the percentage of quotes that turn into orders. It’s the number that separates high-profit printers from also-rans.
Why? Because it recognizes that a revenue-maximizing pricing policy isn’t created by your internally focused estimating system, “your cost,” but by your customers and the competitors that they know and trust. Your customers are the ones who will give you the order and write the check.
If your hit ratio is low, you’re walking away from the dollars of contribution to overhead that will make or break you. If it’s 95%+, you’re routinely leaving money on the table.
When you focus on your hit ratio, you’re on the path to profit. If you begin to track the hit ratio by customer or line of business, you’re even better.
Bob Lindgren is with The Management Guys. You can reach him at 818-219-3855 or bob.lindgren815@gmail.com.