Improving bid qualification decisions may be the biggest single way to achieve a step change in win rate success, yet it remains one of the hardest areas to address.
Our partners at twentysix2 have an informative series of blogs covering various stages of the bid and proposal lifecycle. ‘To bid, or not to bid?’ is our first weekly installment.
Making sound and timely bid / no bid decisions would focus scarce business development resources on those opportunities that organisations are more likely to win – increasing bandwidth and the ability to produce quality propositions.
Why then do so many companies achieve unacceptably low win rates by chasing everything, making poor qualification decisions and wasting precious resources?
The qualification decision is rarely taken in isolation. The ‘attractiveness’ of a single opportunity will vary according to the state of the rest of the sales pipeline. In a drought, any opportunity will take on increased significance. In a glut, there will be a fight to secure the resources to chase many opportunities that would not seem attractive at other times.
Companies mistake volume for quality in their sales pipelines. Good sense would suggest that if we go for fewer opportunities that we have a better chance of winning then the increased focus will reap better rewards. However, you can imagine the Board’s reaction when you tell them “I’ve halved that big fat sales pipeline we used to have – but believe me, we’ll land more of those opportunities!” It takes a leap of faith and some lead time for such a policy change to take effect.
We live in an uncertain world. No one can predict the future with anything like 100% certainty. It is a brave manager who decides to cut out opportunities early in their lifecycle. To that end, a ‘no bid’ decision is the exception which requires substantial proof to show why we should not bid. It is much easy to keep an opportunity open, putting off the difficult decision until more information is known. This approach can lead to the gradual hemorrhaging of resources and a bigger opportunity cost in the reduced capacity to pursue other targets.
Exceptions are used to prove the rule. “We won that one, even though we heard about it late”, claims the salesperson. This is often used as an excuse to keep opportunities live in the face of mounting evidence that it should be closed down as we don’t know the first thing about the opportunity, the customer or the competition.
Qualification decisions are rarely rational as they are often made by Sales, the very people who are targeted and measured by the number of opportunities in their pipeline. The salesperson who owns the opportunity will always want to keep as many balls in the air as possible and will be emotionally attached to opportunities in which they have invested their efforts. As one world-weary bid manager used to say – “For salespeople, Qualification is as popular as drowning puppies or telling somebody their baby is ugly!”
Qualification pain is not felt by those doing the qualifying. When the qualification decision is left in the hands of Sales, the real pain that results from continuing to bid is often not felt by the Salesperson. The cost – financially, emotionally and physically – is felt by those preparing the bids. It is this team that face the long days, longer nights and pizza overload in preparing the proposal.
So, what could organisations do to improve?
- Take early decisions – to enable the full benefit of increased resources and focus to be felt on those opportunities that they really do have a good chance of winning.
- Agree the factors that would cause a no-bid – do this early on in the process to enable a rational decision later on.
- Be consistent in the application of bid / no bid decisions – and the process that teams go through. Over time this will lead to some self-governance by Sales earlier on in the process in weeding out opportunities from the pipeline.
- Take direction from Corporate Strategy – but be prepared to divert. The application of a process shouldn’t put the organization into a straightjacket that limits agility and an ability to respond to market conditions.
- Include more meaningful measures – business development good health goes beyond simple pipeline value / volume. Organisations need to recognise that ultimately it is the quality of the opportunity that will determine whether or not it becomes a successful win.
Author: Ian Sherwood CPP.APMP, Bid and Proposals Director, twentysix2
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