Following a process that includes a structured bid/no-bid decision and strategy making before kickoff ensures:
Your decision to bid is made only after careful evaluation of the prospect and project, and competitive and internal factors, and
You kick off the proposal only after building a win strategy that’s responsive to the prospect’s issues and includes value propositions for all buyer types
Despite all this effort, you may still not have a winning strategy.
The downside to momentum
Bid decisions are typically based on reasonable assumptions and on knowledge available at the time. Subsequent strategy making includes testing those assumptions and gathering more facts. In the process, you may discover (among other things) that:
Your ideal strategic partner has signed on with a competing bid team
An internal resource you counted on was assigned to another project
The cost structure for your ideal solution is higher than initial estimates
In each case strategy makers typically select the next best option and press on. Any one of these second choices might not be fatal—but cumulatively they could doom the proposal.
A challenge for any team is staying realistic about their probability of success. Even in these early days, a proposal effort can develop momentum that’s hard to deflect or stop.
Enter the Blue Team review
A Blue Team should include people familiar with the client, project and competition—but who are not part of the proposal team*. Their job is to review the built-out strategy for completeness and to test it against the prospect’s needs and issues and competitors’ relative strengths and weaknesses.
*NOTE: Staffing independent review teams is a significant challenge in smaller organizations where everyone who understands the prospect and project is part of the strategy process. We’ll look at workarounds to address this in a future post.
Any serious issues raised by the Blue Team should be addressed before proposal writing kicks off. If one or more critical shortcomings cannot be corrected, the organization may still decide to proceed for strategic reasons.
Revisiting the bid/no-bid decision
After receiving the Blue Team’s comments, senior management may reverse the decision to bid, abandoning the opportunity. This usually happens for one of two reasons:
The bid/no-bid process was flawed or poorly executed, or
Changing conditions or fact discovered during strategy making significantly reduced the prospect of a win
If the bid decision process was flawed, the bidder has learned a valuable lesson—It needs to correct the flaw for future opportunities.
If a once-credible chance of winning has disappeared, deciding not to bid conserves precious resources. At this point, the pursuit has consumed relatively little effort, compared to proceeding to the Red Team review and beyond.
Pulling the plug is frustrating—but if needed, sooner is better.
In any of the above situations, the Blue Team has fulfilled its purpose—and demonstrated its value.
Next week: Black Hat reviews.
Need help building more effective proposal strategies?
In last week’s post, we identified incumbent complacency as a common client complaint in long-term contracts. If complacency extends to your rebid, you’re at high risk of losing the business.
Few companies set out to be complacent. Instead, it’s the cumulative result of various blind spots, including perceptions of client loyalty and habits of working and communicating.
Instead of simply vowing not to be complacent, take the following actions to better inform your rebid strategy.
Five ways to shake off complacency
Get input from non-friendlies: Have your business developers connect with a wider group at your client organization. Seek out the economic buyer, technical buyers and user buyers. If possible meet with likely bid evaluators. And don’t ask, “Is everything OK?” Instead ask, “What improvements would you like to see in the next contract period?” and “How is your business changing in ways that will affect our relationship?” Open-ended questions such as these will produce more useful intelligence.
Send some ringers on the site visit: Take advantage of the site visit invitation to get input from another business team managing a similar contract. Ask your colleagues to be tough markers. What shortcomings would they pounce on if a competitor held the current contract?
Turn speed bumps into lessons learned: Don’t ignore issues that arose during the current contract, hoping your client will have forgotten. Instead, explain the steps you took to address root causes. If the process involved significant investment (of your own money), state the amount. Use non-recurrence of the issue to show your remedy was successful.
Find specific cost savings: Identify new ways reduce costs or add value. Choose examples that involve an investment and business case—otherwise the client will wonder why you didn’t introduce these improvements in the current contract.
Ghost your competition: Try to anticipate your strongest competitor’s moves and decide how to offset them. For example, if a hungry competitor offers to waive its transition costs, what other valid arguments can you make for not switching?
Be sure to do a Blue Team and Black Hat reviews
Successful teams use Blue Team and Black Hat reviews to test strategy. Both provide good value in rebid situations.
The Blue Team tests strategy, using internal resources who understand the project and the competition—but who haven’t been closely involved in building the strategy. The Black Hat team is tasked with attacking the strategy from the perspective of your toughest competitor. In high stakes situations, companies often engage outsiders to perform Black Hat reviews.
We’ll explore these two types of review in the coming weeks.
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.
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.
Companies conducting large numbers of reviews per year should also consider using win loss analysis to aggregate review data to see patterns and trends in bid response performance. This post will show you how to get started.
Add header information
Header information will determine how you can sort bids to see what’s happening. In mathematical terms, header items are independent variables.
Consider all the parameters against which you want to analyse results and add them to your review format, using letter or number codes. Examples of common header items include:
Bid review tracking number (if used)
Bid/No bid decision score (if known)
Result (win or loss)
Client type (e.g. by industrial category)
Pre-RFP sales contact
Role (if any) in shaping the RFP
Prospect is/is not a current client
Deciding on header items is an important step with long-term consequences.
While you can always add new items later, you will only be able to use those new items to analyse future bids—unless you go back to reconstruct and enter historic data.
Add quantitative questions to each section
For each of the interview areas (see this post on win-loss review basics), add a question that can be scored numerically. For example, to the questions on responsiveness, add the following (or a similar) question:
“Overall, on a scale of 1 to 5, how well did XYZ Co. demonstrate it understood your needs?”
You can also ask:
IF A WIN: “Again on a scale of 1 to 5, how would you rank the next closest bidder on responsiveness?”
IF A LOSS: “Again on a scale of 1 to 5, how would you rank the winning bidder on responsiveness?”
To obtain high quality responses, ask your quantitative questions at the end of each section, rather than grouping them as a separate set of questions.
Assemble the review data and analyse
Input the header information and quantitative responses to a database or Excel spreadsheet. Over time you will be able to answer questions such as:
How does pre-RFP sales contact affect our win rate?
What is our responsiveness score on winning bids vs. losses?
Does our loss rate as incumbent vary by territory?
Of course the data you track and the questions you ask will depend on your business.
A brief, easy-to-follow report is more likely to get read by senior managers and executives. Structuring, formatting and writing for reader efficiency are especially important if you report on two or more win-loss reviews per month.
Develop a report format
Build your report around the interview guide. Set out each question in bold face or italics, followed by a summary of the interviewee’s response. Keep these summaries very brief for all but prospect comments significant to the outcome.
Wherever possible, include direct quotes. Many senior executives have little direct client contact and are eager for any chance to hear the “voice of the customer.” Direct quotes that align with the response summaries and that “ring true” (that is, actually sound like a person speaking) will help your reports get attention.
Open with a summary
Begin each report with an overall summary of the interview. Explain in one or two short paragraphs why you won or lost the opportunity. Lead with the most important point.
Busy reviewers may only read the summary. Therefore, follow the opening paragraph(s) with three to five bullet points taken from responses that support your summary. Include the question reference for each bullet point, in case the reader wants to investigate further.
Take care to ensure your summary is balanced—that it accurately reflects the prospect’s overall message and doesn’t give undue weight to some aspect that may have impressed you or the interviewer.
Decide whether to include internal interview findings
Some companies include a brief section highlighting any disconnects between the internal team’s analysis of a bid loss and the prospect’s feedback. Decide as a team whether this should be part of the report or documented separately as part of a sales discovery and process improvement project.
Next step: Win-loss analyses
Win-loss reviews focus on individual bid opportunities; win-loss analyses reveal patterns and trends in bid wins. Next week we’ll look at how to structure and manage win-loss reviews to enable analysis.
Last week’s post introduced win-loss reviews and suggested question categories. This post covers planning and conducting the interviews.
Develop an interview guide
For each category (responsiveness, process, etc.) described in last week’s post—and any others you add—draft open-ended questions that invite a candid assessment of your performance. For example: How well did SellerCo demonstrate it understood your requirements?
Limit your questions to four per area, to allow time for follow-up questions. Including too many questions results in rushed, perfunctory interviews. What you want is a thoughtful exchange that produces deeper insights.
Circulate the guide and get buy-in from your bid team and management.
Conduct internal and external interviews
Internal interviews: Internal interviews provide insights that make the prospect interview(s) more productive. They also indicate how accurately your team assesses its client relationship and understands the client's needs.
Interview the proposal manager and relationship manager and document their responses to each of your questions. They won’t have the same information as the prospect (see below)—but will provide an internal baseline for comparison.
Prospect interview(s): Make appointments with the bid issuer’s decision-maker(s). Request a number and time to call and provide an estimate of the time required. We’ve found a reasonable duration is 45-60 minutes. Emphasize that this is business improvement exercise—not a sales call or an effort to revisit the bid decision. Most issuers recognize they have a responsibility—and that it’s in their interests—to help vendors improve. If a prospect flat-out refuses win-loss interview requests, consider whether it’s worth continuing to bid.
Note: Some issuers have their own disclosure process. If it doesn’t address your information needs, request a separate interview to gather missing information.
Remain neutral, capture quotes
When conducting external interviews, use a neutral tone of voice and refer to your company by name, rather than using “we,” “us” and “our.” This matter-of-fact approach will put interviewees at ease and produce better quality information.
Capture responses as much as possible in the interviewee’s own words. Using direct quotes in your report will give it much more impact and credibility among your company’s leadership.
Consider using a third party
Companies with high bid volumes often use third parties, such as Complex2Clear, to conduct and report on win-loss interviews. A third party interviewer removes any decision-maker reluctance to be candid. Internally, using an unbiased outside contractor may give the results more credibility.
Next week: Win-loss reports and analyses
Need help improving your review and analysis of wins and losses?
Formal win-loss reviews are an essential part of understanding why you lose (or win) bids—and of learning how to improve your future results.
A robust win-loss review process starts with a comprehensive set of questions.
Address all aspects of the bid
Segment your process to include questions on:
Relationship: How deep and wide are your prospect relationships? How effective was your team’s pre-RFP engagement? If the prospect is a current client, which aspects of your current relationship are strongest and weakest?
Process: How did your team handle the bid response? Was the solution responsive to the issuer’s strategic drivers and hot button issues? Was your proposal visually appealing and easy to read and understand?
Value proposition: How did your offering stack up against the competition? Was it well aligned with the requirements? Did you prove your team could deliver the solution? Were value-added components seen as responsive and well defined?
Positioning: In which aspects was your offer superior? Where did competitors score higher? How does the issuer see your company, team and ability to perform relative to your main competitors? How does your relationship compare to other bidders’ relationships?
Price: Was your pricing clearly presented? How did your price compare with other bidders? Did other bidders offer bundles or plans that affected the decision? How much higher (or lower) was your price than the successful (or closest competitor)?
Customize and refine your questions
Make your questions as specific as possible and tailor them to suit your business. For example, RFPs in some industries typically include pricing tables for completion. This will affect how you structure questions on price.
Test the questions internally and refine them until they are complete and clear.
Once you’re satisfied with your questions, the next step is to plan and execute successful interviews. We’ll explore how to do this in next week’s post.
Need help building an effective win-loss review process?
In past posts we’ve stressed the value of structured and transparent bid/no-bid decisions. A consistent process that considers both RFP-specific and strategic issues enables your team to make faster and better decisions.
Speed and quality are both important. Faster decisions save precious time if you decide to bid, and let you move quickly to other priorities if you decide to pass. Better decisions enable you to commit resources to projects with the best chances of success.
Obstacles to good decisions
As powerful as a collaborative and transparent bid decision process can be, in practice it faces two critical risks:
Lack of preparation: Typical RFPs run to dozens, if not hundreds, of pages. Participants might skim the document, but may not be familiar enough to contribute fully.
Incomplete information: Even if all participants do a good job of reading and thinking about the RFP, a high-quality decision might require more information.
If either or both of these situations occur regularly, bid/no-bid meetings will become frustrating and seen as a waste of time. Bid decisions will be put off, or made without the consideration they deserve. Over time, the process itself may be abandoned.
Avoid these risks by arming your team with a bid decision summary—especially if the typical RFP is complex and/or the opportunity flow requires multiple bid decision sessions per month.
Assign a bid team member to review the RFP carefully, and then to use our Bid-No-Bid Decision Tool as a guide in creating the summary. Gather information from internal and external sources (e.g. bid taker info on the issuer’s site), balancing the need for completeness with your understanding of what the decision team will already know.
Consider including at least the following:
Prospect information—from internal records
Recent bids submitted to this prospect and results, including price sensitivity if known
If the prospect is a current client, any performance, payment or other issues of which the decision team may not be aware
Project information—from the RFP
Statement of strategic intent and/or key selection factors
Statement of work
Compliance highlights, including submission date, page limits, and any unusual requirements
Scoring process and framework
Response outline if provided
RFP page references for above and any other important items
Competitive information—as available
Name of incumbent
Other bid takers
Recent awards to likely bidders
Competitor relationships with prospect of which the team may not be aware
Current commitments involving the same key individuals and/or subcontractors
After developing a few summaries, streamline the summary process by developing a template with headings that fit your requirements. Fine tune the level of detail based on observed discussions at bid/no-bid decision meetings.
Provide context, without trying to shape the decision
Focus on facts when developing summaries. Bid teams often develop strong opinions about the wisdom of bidding on certain types of projects or to certain prospects. Expressing these will diminish the summary’s credibility.
Instead, present all the relevant facts fairly, so the decision team has all the information needed to see the opportunity clearly.
Helping decision makers be efficient will improve their perceptions of the bid/no-bid decision process and willingness to participate—improving bid win rates over time.
Next week: Win/loss reviews—another tool to improve win rates
In large bids, the price quote is typically packaged separately from the technical proposal. In these cases, a bidder can be disqualified for including price in the narrative. But that doesn’t mean you can’t position your price—and you should.
Positioning is the technique of describing various features—in this case price—in such a way that your offer becomes the best option in the minds of the evaluators.
Buyers want to know a price is based on some logical process, includes all their requirements, and is competitive.
Ways to position your price
Positioning is industry and project-specific. Here are some examples from situations we’ve seen.
Using trade-offs: Make any cost and price trade-offs in your pricing decisions explicit in a table or text. For example:
We considered using the slightly cheaper D433Z technology, but our recommended solution provides 30% greater reliability (MTBF), giving you much better system uptime and lower lifetime costs.
The recommended approach uses open trench construction. Open trench is 20% less expensive than the trenchless technology used in your reference project, which had to accommodate greater environmental and traffic issues.
As reasonable and low risk: Savvy buyers want to know your price calculations are based on sound information and that you can deliver within it. For example:
Our price quote is calculated based on our experience with a project last year for XYZ Corporation, used as a reference. The XYZ project, which had an 90% functional overlap and was slightly larger than yours, was completed on time and within budget.
Over 85% of labour and management costs will be for internal resources. Our two proposed subcontractors have each teamed with us on three projects in the past year. This structure enables us to price your project realistically with low risk of cost overruns.
Against competitors: If you know one or more competitors typically cut corners to make their price more attractive, call them out (without mentioning them by name). For example:
Because of your high availability requirements, our price includes OEM warranties providing 24-hour repair or replacement on all major components during the five-year contract life. Some competitor prices may be based on cheaper third-party warranties. These technically comply with the RFP, but are typically less reliable, risking major disruption to your operations in case of a breakdown.
Find what works for you
Use the above techniques as thought-starters and brainstorm with your team to find ways to position price.
Your goals are to help evaluators have confidence your pricing is based on sound reasoning and to pre-emptively explain away any variances with competitors’ prices.
Challenged to express the value behind your price offer?
This post shows how to make that summary easy to consume and responsive to your prospect’s issues.
Organizing your cost/price summary
Structure the summary around 3-5 themes important to your prospect. Themes vary by industry and project type, but common examples include price reasonableness, total cost of ownership, costs aligned to progress payments, risk of overruns and/or non-performance, return on investment, etc.
Present the information at a high level and aim for a 50/50 balance of text and visuals.
Rich visualization gives evaluators fresh perspectives on your price and builds comfort. Your goal is to make the evaluator’s job easier, not to complicate it.
Cost/price presentation examples
Use these examples to stimulate your thinking, and then decide what will work best in your situation.
Over time: Show costs broken out by major milestones and/or project segments Purpose: To show affordability, alignment with progress payments and/or possible divisions between budget categories (e.g. capital vs. expense items).
Compared with similar projects: Use a table and visual to present costs of recent projects of similar size and scope to the current project. Purpose: To show price is realistic and competitive
How estimated: Diagram your estimating process Purpose: To reinforce that your price is cost-based and carefully calculated, so the prospect understands your price is realistic and any contracting negotiations must be logic-based.
By subcontractor: Use a pie chart to show the relative size of contracted segments, together with information on each contractor. Purpose: To show how costs are allocated, emphasize competitive selection process, contractor capability and low non-performance risk.
Including trade-offs: Use a table to show options and how each decision impacted cost and price Purpose: To show how cost/price decisions align with the prospect’s strategic drivers and hot button issues. Also use to ghost competitors’ price offers.
Return on investment: Use a graph to show value added, compared to project costs Purpose: Where your solution will increase sales or reduce costs, to show a comparison of costs and related profits/savings over time
Add a selling caption
For each visual, include a selling caption to stress the benefits it conveys. Write these so they can be cut-and-pasted into an evaluator’s summary.