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Many of us know the pain that accompanies losing a well-fought opportunity. It tends to be more acute with every extra hour we’ve put into the response and every positive buying signal we’ve observed in the process. While the adage, “you can’t win them all” rings as true in the bid and proposal world as it does anywhere else, it doesn’t make a loss any easier.
To ease some of this pain and start building a resistance to it, we need to be continually refining our processes, communicating our lessons learned and winning the next opportunities.
There will be many “next opportunities.” Opportunity identification platforms are aggregating and delivering bid opportunities to companies in the thousands every week across the globe. Proposal, sales, capture and business development professionals are flooded by requests to vet and respond to more opportunities than they could ever realistically handle. And while some may use proposal automation solutions to streamline response production, many responding professionals will spend hours and money on low-probability opportunities, only to learn later that they shouldn’t be responding at all. Some companies are still approaching proposals like a high-stakes lottery instead of as strategic opportunities.
So, what can we do to ensure our time and money are converging on the opportunities that are not only driving ROI but are the best fit for our companies?
Recommit to Qualification
Take the time early on in your processes to learn the good, bad and the ugly about potentially doing business with each prospect. Is there a true pain you’re addressing? Does the target organization really need what you’re offering? Does your solution align with the mission of the public or private entity? Thorough, consistent and early qualification will identify motivations; business, personal or political pain; legal and security gaps; and procurement detail. This will require a heavy dose of patience.
It is far better to disqualify an opportunity that doesn’t align with your capabilities, deliver future business or drive ROI than to let it distract from the more qualified ones. Here are some time-tested questions you can ask when assessing an opportunity:
- Will this opportunity render ROI and position your company for future business?
- How well did your company influence the RFP structure, content and selection criteria?
- Do you or your colleagues have an established relationship with decision makers for this opportunity?
- Can your company deliver the requested products and/or services in a cost-effective manner?
- Is the proposed project funded?
- Did you know this opportunity would be released before it was posted publicly?
- Does your company have a customer of similar size and/or use case to reference on this response?
- Is your company the incumbent contract holder for this opportunity?
- Do you know the names of the other companies competing for this opportunity?
- How often does your company win business against the top competing company?
Of course, there are myriad other qualifying criteria to apply to incoming opportunities, but these will get you well on your way to bid qualification stardom and save time and money in the process.
Recognize Economic Impact
In tandem with tightening qualification filters, it is just as important to ascertain the bid decision economics for your company. Here are two questions to examine the economic impact of your bid decisions:
- What is the financial impact of responding? Companies may spend between 15 and 50 hours responding to a single bid opportunity. Multiply this by the aggregate hard costs of responding personnel — which could be anywhere between $75–100 an hour — and you have a reasonable understanding of the financial impact per opportunity. A single response could cost your company up to $5,000 or more, without production or shipping costs. Multiply this by 30 uninformed bid decisions, and you’ve lost about $150,000 with no return on your investment.
- What is the level of effort required to respond? Resource constraints exist in companies of all shapes and sizes. When deciding to respond or pass, consider the amount of available and relevant preexisting product, legal and security content; available response personnel; access to a response automation solution; time left before the response deadline; cost to produce a competitive response; and every activity that will need to go by the wayside in order to focus on this opportunity.
While there is no surefire way to completely avoid the pain that lost opportunities inflict, taking a qualify-first approach to bid opportunities while understanding the economic impact of them will help you allocate appropriate resources to drive up win rates and leave the tempting distractions behind.
Josh Ellars, CEO and Founder of Patri, provides innovative cloud-based software to empower data-driven bid decisions and increase win rates. He has over 11 years of experience in public and private sector proposals, most recently leading marketing and proposals at OpenGov, and prior, launching the public sector business at Qualtrics.