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Risks of rebid complacency

 November 7, 2017
by Paul Heron

Incumbents who submit a “more of the same” proposal at rebid are often disappointed.

Most clients rate incumbent complacency as their number one complaint in satisfaction surveys. Hungry competitors know this and will counter your called-in rebid with fresh ideas and promises of more attentive service. Business developers close to your client will have a up-to-date list of wants and needs, plus details of any contract issues you’ve experienced. They may even have access to your pricing.

In fact, at the U.S. federal level, incumbents are successful in about 60 percent of rebids—which means they lose 40 percent of the time. There’s no room for complacency when the odds of winning are 60/40.

A complacent incumbent usually believes one or more of the following:

“Nothing much has changed”

Really? A “more of the same” proposal essentially says:

  • The client’s strategic drivers haven’t changed during the current contract
  • The same individuals are calling the shots
  • Technology hasn’t changed
  • There’s no downward pressure on budgets
  • Your competitors will use the same approaches and pricing as last time

If this describes your world, you’d be unique among the bidders we see.

“The client loves us”

You may have a warm relationship with your client—at least with the individuals you talk to most. But, given the natural desire to avoid conflict, the warmth may not be as deep as you think. And there may be others in the organization with more power who judge you less kindly.

Maybe your client really does love you. However, if you’re bidding into a government agency or other entity with a strict bid process, love will only take you so far.

You’ll still need to win the technical portion and be close on pricing.

“The client doesn’t want a transition”

Transition risk and cost are significant issues in many situations.

But, against hungry competitors willing to waive transition costs and/or slash margins to win business, incumbents cannot rely on change aversion to win. This is especially true in competitions run by government agencies and monitored by fairness commissioners.

Avoiding complacency

Complacency is like weight-gain. It creeps up on most of us unnoticed.

It’s also hard to combat. Rather than vowing not to be complacent, take concrete actions to ensure your team takes a fresh look at rebid situations.

Next week: Five things you can do to guard against rebid complacency.

 

Need help developing winning bid strategies?

Contact Complex2Clear

 

Photo credit


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

 

 


  

 

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