May 2024 - BD Metrics

It’s important for Business Development (BD) leaders to capture the metrics necessary for properly managing the BD activity. Not all BD leaders do, and many succumb to a common pitfall of only capturing the metrics necessary for completing briefing or status charts. Consequently, BD leaders tend to manage the BD activity to those metrics, missing important information that would have been useful if known.

All organizational briefing charts include the same basic win and loss data, including Win Rate (total number of opportunities won divided by the total number of opportunities bid). However, this single high level metric doesn’t provide insight into the wins themselves and should never be the single driver for decision-making. The over-emphasis on Win Rates is common, and an obvious example is when hiring new Capture Managers. Human Resources (HR) and BD leaders tend to focus on Win Rates in their selection criteria, overlooking key information about dollars won, bid size and complexity, Bid and Proposal (B&;P) budget management and so forth.

There are a number of metrics, that when analyzed individually or collectively, will help provide insight into BD activity performance. The Capture Rate, for example, is a “dollars focused” metric (calculated by dividing total dollars won by the total dollars pursued) and used to help understand what you’re winning and where your organization is relative to the overall sales objective. For example, at mid-year, you may have a 30% Win Rate, but you could also have a 40% Capture Rate, meaning that although you didn’t win often, you won those bids that made the most money. This could mean you are performing well with certain customers or certain types of contracts. Understanding the Capture Rate helps you prioritize what you bid on for the second half of the year.