Making bid/no-bid decisions

Many companies have unresolved tension between those who want to respond to more bid opportunities and those who want to focus on fewer bids and aim for a higher win percentage.

Bid more, even if success rate drops?

Sales teams responsible for filtering opportunities and preparing bids typically want to bid only on RFPs where they see a high probability of success. For them, building client relationships seems a better use of time than writing long shot bid proposals.

Higher-ups may see a high win rate as indicating the company should be bidding on more opportunities—even at the cost of losing more often.

While it makes sense only to bid on winnable projects, setting the bid/no-bid boundary can be tricky.

Challenges in finding middle ground

As with many disagreements, the ideal solution lies somewhere in the middle. Sales teams may be best positioned to gauge the chances of winning a given opportunity—but there’s usually a lot of territory between sure winners and no hopers.

Many variables—including whether the team is making budget, the number of new prospects competing for attention, and the availability of resource—can influence the team’s thinking on any given bid.

Corporate leaders, on the other hand, are focused on company-wide growth and profitability, and they may be less sensitive to the added pressure that preparing more bid responses puts on their sales teams.

Partial solution: Bid more efficiently

One approach to this issue is to reduce the effort needed to bid without compromising quality. Assuming bid teams have an incentive to win more business, an easier process should result in a higher RFP response rate.

Companies pursue bid efficiency with investments in processes, structure, technology and knowledge management. In future posts we’ll look at ways you can invest to work less and win more bids.

Despite these improvements, the tension around whether to bid will remain, unless you take another step.

Formalize your bid / no-bid decision

Equally important as efficient proposal writing is a process for efficiently deciding whether to bid.

Making the bid/no-bid criteria and decision transparent and shareable not only helps resolve tension around this issue—it also provides a baseline for evaluating success against your predictive score, so you can review your success and adjust going forward.

Coming posts will cover bid/no-bid criteria and a decision making format.

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