If you are frequently losing bids on price, then it’s time to pause and take a look at what you can do to reverse the trend. Allowing some thinking time on the eight points below will help improve that win rate:
1. Warm or Cold Bid – does the buyer know your organisation or will your bid be the first time they have heard of you? While it is not impossible to win a bid as an unknown contractor, it is less likely as many buyers have a risk averse approach. Perhaps you are being used to make up the numbers / give the buyers a benchmark?
2. Sales / Business Development Activity – How are you getting in front of buyers? How are you building your pipeline? You should ideally know what opportunities are coming out and when. Better still is when you have the chance to inform the specification, so that the buyer is asking questions that you are the answer to.
3. Client Intelligence – Back to cultivating relationships; keep in touch as projects progress and conclude. Check in whether the buyer got what they hoped. Did the project stay within budget, or have they ended up paying more than expected? Use this intelligence to talk to clients at Meet the Buyer Days, Trade Shows and Exhibitions.
4. Supply Chain – Are you getting the best prices from your supply chain? Have you market tested recently? Could you get better prices if you landed a large contract? When bidding for a large contract, ask your suppliers what discount they will provide if you win it.
5. Cost Recovery – Are you looking to recover cost of acquisition (e.g. sales / bid costs) through this contract? This may not always be the best approach – some other bidders will have a separate business development / bid budget for this activity.
6. Your Staff – As always, your staff (and good sub-contractors) can be your best asset. If you asked each person to come up with three money-saving ideas for your business, you may be surprised at the answers!
7. Price/Quality Split – Try to understand what type of contractor the client is looking for – cheap as chips, mid-range or high end? If you don’t have an offering to match, then consider not bidding the opportunity.
8. Price Adjudication – Include a number of people in this exercise. Don’t leave it all with one person or to the last minute. Encourage challenge to get to the best price for your business.