To bid, or not to bid
It is important in today’s day and age, that businesses understand the correlation between price and quality. Most people understand the price is related to quality but how far do you go until the difference in quality is negligible? Somewhere along the line there is a point where price and quality combine to deliver an optimised solution to your needs. This could relate to buying a house, car and even investing in responding to a tender. The idea that to have a high quality product, or service is absolutely dependent on price is not always true. On a day to day basis there are many businesses that defer investment into bidding due to cost. Small investment in your bidding process can provide you with exponential returns if invested correctly and wisely. The average cost of responding to a tender has dropped from the national average of 4% in 2016 to 3.5% in 2017 (Gardiner and Theobald – Tender Price Indicator). Tendering for new business is becoming more common across all business sectors and the question you have to ask is- Can I afford not to bid?
The answer to this question is your ‘bid or no bid’ decision.
You need to have clear criteria for assessing opportunities in order to decide on whether you pass on an opportunity, or whether you have a good chance of winning. Criteria need to be established such that you only bid for those tenders that are the right fit strategically, provide you with the returns you desire and you have the capability of beating the competition. Profitability cannot be the only factor by which you assess a tender - your criteria for ‘bid/no bid’ decision also may also need to be strategic. For example will you sacrifice profit to secure business from an entrenched incumbent, or to get your foot in the door with the view of securing more lucrative contracts down the line? Consideration should be given to these and other factors that may include:
- Does the opportunity align to your strategic aims?
- Why are you perusing this opportunity - profitability, entry into new market or customer?
- Will you be able to deliver desired profit, or is there another reason?
- Will it affect your existing work load; have you got capacity if you were successful?
- What is the cost to fulfil the contract?
- How crucial is the customer to your long-term goals?
eXceeding can help with all your bid needs and help you develop a ‘bid/no bid’ process that aligns with your strategic business objectives.
We work with clients to identify the key strategic aims and align the ‘bid/no bid’ process to support business objectives. If you hone this process and really get it right, then investment in the bidding process will provide you with substantial return on investment.
For help with you ‘bid/ no bid’ decision making process and all other bidding needs contact one of our consultants today for free impartial advice: [email protected] or call 03333 555 111