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The RFP Bid/No-Bid Decision: Competitive Factors

 December 18, 2012
by Paul Heron

This is the fourth of five posts on creating a process for deciding whether or not to bid on any given opportunity. A transparent process improves alignment and gives you information to optimize your win rate, given your resources.

Find the previous three posts at these links:

Why you need a formal bid/no-bid decision framework
Step One: How to evaluate the client and relationship
Step Two: Project-specific questions

Step Three: Evaluating your competition

Who are you competing against? Machiavelli recommended keeping our friends close and our enemies closer. If the stakes are high and your resources scarce, make sure to do your homework on the other bidders.

1. Is there an incumbent? If this RFP seeks to renew an existing contract, is the incumbent bidding? If yes, is the client genuinely looking for a new supplier, or is it simply fulfilling a requirement to solicit quotes? Has the incumbent had performance or other issues on the current contract? In this post, we talk about why incumbents often lose renewal competitions.

2. Is your offer competitive? Do you know what the other bidders are bringing to the table? In many sectors—telecom is one example—disruptive or next-generation technologies can offer huge cost savings in the right situations. Is this one of those situations, and can you be competitive?

3. Does a client decision maker or influencer favour a competitor? Favouritism could be based on a past association or a current business relationship unrelated to the current RFP. If another bidder is favoured, how well does the RFP process promote fairness?

4. Are there any desperate and/or stupid competitors? From time to time every industry is plagued by one or more competitors who consistently underbid everyone else. These companies may be desperate for a win, or they may not fully understand the RFP and/or their own costs. Most savvy clients won’t accept an offer that’s too good to be true, but the prospect of a very low competitive quote may affect your appetite and/or the way you present your bid. For example, you may use a pricing model that is more transparent than usual to prompt questions about the low quote.

Competitive factors are seldom showstoppers, but they should be included as part of the bid/no-bid decision. Investing more resources in another RFP opportunity may yield higher returns than, for example, going head-to head against a popular incumbent or a competitor with a cheaper and more efficient technical solution.

What competitive criteria do you use?

Do you have a formal or informal bid/no-bid framework? What factors do you consider and why?

As a wrap-up to the series, we’ll share some best practices and a framework you can adapt to your own bid/no-bid criteria and we wil look at how they can influence your decision-making process.

Photo credit

Paul Heron, MBA, is the founder and managing partner of Complex2Clear, and leads our bid response practice. LinkedIn 






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