To Bid or Not to Bid?
It is a good question.
Let me take you back a few years when I was working for BT running one of their BT Local Business franchises.
I walked into the office to a huge amount of noise one day. We had been passed an ITT for a large corporate network. Allegedly worth over a £million, I was surprised to find no one had actually spoken to the prospect - at best it was a 'suspect'.
A short call with the decision maker established the following:
- Even if I stripped out the whistles and bells our lowest end solution was 3 times their budget
- The (very smart) incumbent had written the ITT on behalf of the client to fit their solution
- The incumbent was run by a family friend of the purchasing CEO and all previous business had gone their way.
Point 1 wasn't impossible to overcome. I genuinely don't believe businesses buy on price. They want good value from a partner they can trust. Significant price differences generally point to significantly different solutions (I will cover 'comparing apples with apples' in a future post).
Point 2 was tougher but still not a showstopper.
Point 3: Well that was when I put my pen down. My chances of winning were negligible at best.
With the average RFP taking over 30 hours to prepare and requiring input from 9 team members (Source: Loopio 2023), it's worth asking yourself a few questions before you start preparing a proposal:
- Do I have a solution to fit the budget? (Do I even know the budget?)
- What are the criteria to win?
- Are the margins good enough (If a single issue takes you from profit to loss the answer is probably no)
- Who else is bidding?
- Is the deadline short? Last minute RFP requests scream 'benchmarking'. Be honest with your prospect. Have you got a genuine chance of winning or has the decision already been made? If they simply need a third proposal to meet their purchasing policy, send them a standard price list or proposal and save yourself a week's work.
There are many more examples and we will look at introducing a more scientific 'Go/No Go' strategy in Part 3.
The important point is: 'If we are going to lose business we want to lose it fast'.
Be honest with your prospects. Tell them if you can't deliver what they want within their budget or timeframe. It is ethical, honest and builds trust.
I am happy to admit I have initially lost business on price only to win it at a later date.
And yes, there is a small sense of satisfaction when you hear: 'You were right, we needed to invest more for the solution we really wanted. When are you free to meet for a coffee?'
Author: Shelley Thomas | Accelerate Leadership Ltd | December 2023