To Bid or Not To Bid??
Putting some structure around the Bid / No Bid decision is an important part of any bidding strategy. Bidding everything in the belief that it’s a numbers game – the more you bid, the more chance you’ll win – is flawed reasoning. It’s much better to be strategic about what, when, how and why you are bidding opportunities.
So what criteria would you put in your Bid / No Bid Decision tool? I’ve listed 12 below – there may be others that your business would also need to include:
Existing Relationship – If you are the incumbent, particularly with a good relationship, you are off to a flyer especially in terms of understanding both the client and the opportunity.
Client & Competitor Intelligence – What do you know about the client, the price button and the client hot buttons? Who are the likely competitors and their strengths and weaknesses?
Size of Opportunity – What is the size of the prize? Is there scope for increasing the value during the lifetime of the contract e.g. through additional works / variations?
Duration of Opportunity – What is the length of the contract? Are there extension opportunities?
Price / Quality Split – Is your strength Price? Or are you noted for the Quality of your goods or services? How does the evaluation criteria fit with where you are in the market?
Profitability – How profitable will this contract be?
Strategic Fit – How will this client and contract fit with your current business and its direction of travel? How high up your target list is it?
Future Business Potential – How much scope is there for further business with this client i.e. will this contract open other doors within the client’s business?
Deliverability – How easy will this contract be to deliver for the effort and profit involved?
Credit Rating – Will this client pay in a timely manner, or might there be difficulties?
Terms & Conditions – Check the small print! What are you being asked to sign up to? Are there business risks, and can you live with these?
Bid Resources – Do you have the correct resources available for this bid? If not, can you source these either within your business or by bringing in an external bidding service?
Not all of the above factors are equally weighted. You must decide what is right for your business. Also, some can be potential or actual showstoppers e.g. if you can’t deliver the contract or can’t live with the terms & conditions.
It’s important to get a few people together on the Bid / No Bid Decision process e.g. Business Development, Commercial / Finance, Operations and Legal. Although you will apply scoring and weighting to the Bid / No Bid Decision tool, it is still not the whole picture. You may at times No Bid a high scoring opportunity due to previous experience with the client; or Bid a low scoring opportunity because it’s a client or sector that you want to gain bidding experience with.
Businesses are increasingly seeing the benefits of getting external specialist advice on their bid strategy and bidding processes. An experienced fresh pair of eyes can add significant value. The benefits are large, most notably more time to focus on winning the bids that really matter! Please contact us if your business would like a review of your bid activity with recommendations that will add to your bottom line.