To bid or not to bid, that is the question
Date
January, 2025
Reading time
6 minutes
Category
Best practice
Peggy Herman
co-founder and Managing Director of Bee4win, where she oversees the company’s consulting and pre-sales service activities. Since 2002, she has managed numerous public and private tenders, ranging from a few tens of thousands to several hundred million euros, in sectors as varied as IT, energy, industry and events.
An expert in pre-sales, Peggy continues to provide bid management and writing services, coaching and training. She has also been conducting studies on best practices in this field for over 10 years. Committed to the development of the pre-sales profession, she is president of the French-speaking chapter of APMP and a frequent speaker at events including the Bid and Proposal Conference Europe and Bee4win’s customers.
Key words
#Go/No-go
#RFP
#OpportunityQualification
Responding to a request for proposals (RFP) often represents a major effort: from 1 to 3 days in the simplest cases, to several weeks or the most complex ones. When there is a competitive bidding process, winning chances are rarely higher than 80%. A study we carried out revealed that the average success rate is somewhere between 25 and 30%. However, some companies manage to achieve a 60% success rate, considerably optimising the investment on pre-sales. One of the keys to increasing your success rate and improving your pre-sales performance is to carefully select the RFPs you choose to respond to.
In this article, I propose an approach to help you decide which requests for proposals to respond to.
Questions to ask yourself
Deciding whether to respond or not to a request for proposals requires you to ask yourself a series of questions. If you don’t have the answers, you will have to make assumptions, and these assumptions may turn out to be wrong, leading you to make the wrong decision. The more reliable information you can obtain, the more likely you are to make the right decision
As you probably know, the more intimate we are with the client, the more information we can obtain about their needs and the reasons why they are launching this request for proposal (or even directing the content of the tender documents to be in a privileged position compared with competitors). When this intimacy has not been established, don’t give up too quickly: all channels are good for finding information! You can, for example, do some research on the Internet, examine the LinkedIn profiles of people who have worked for this client or on a given project, see if the outgoing contractor has posted a success story about the project, get in touch with people who have already worked with this client, and more.
The questions you need to ask yourself can be divided into 3 groups:
1. Are we interested in the project ?
The aim here is to ensure that the client’s project is well aligned with your company’s strategy, and that there is an underlying business opportunity (or opportunities) of interest to you. Questions to ask include
- Does the project correspond to at least one of our current offerings or to the one we want to move to?
- How many similar projects have we already completed or won (possibly within a specific business sector, geographical area or timeframe)?
- Does this project open the door to other opportunities we are interested in? If so, which ones?
Feel free to add questions to identify the risk of the project not going well, and the acceptability for your company of the consequences if the project does not go well:
- Is this a client (or type of client) with whom we want to work? (This question can be broken down into underlying questions: is the client mature for this type of project? Is their approach open and constructive?)
- Is the project highly complex and critical? Are there any blocking risks?
- Have any non-standard or unacceptable requirements been identified (in terms of penalties or liability clauses, for example)?
- Is the requirement clearly defined, complete and structured?
2. Can we answer them ?
Once you are interested in the project, you can go deeper into the qualification process by asking yourself questions related to the availability of your resources:
- Do we have all the necessary skilled resources available to respond?
- Will we be able to have all the required skilled resources available to carry out the project if we win it?
- Can we offer a solution that meets 100% of the client’s needs?
- Can we offer a solution that fits within the client’s budget?
3. What are our chances of winning ?
While most companies ask themselves the above questions, a good proportion generally stop there and don’t try to assess their chances of winning. At least not objectively. This is probably for fear of a NoGo from management if the estimated chances of winning are low. However, having low chances of winning does not necessarily mean that you should not respond. You may decide to respond for political reasons, or to make yourself known to the client and be in a better position next time.
Assessing the chances of winning does not necessarily mean defining a precise percentage probability of winning. This precise percentage is often difficult, if not impossible, to calculate. In my opinion, the main objective here is to assess how you’re positioned:
- in terms of client relations: does the client know us? do we have a close relationship with him? have we worked with him before? Did it go well? Does the client like us? …
- and secondly, in terms of the competition: is there already a competitor working on this project or on other similar projects for this client? are we expecting tough competition? Do we have any differentiating assets or significant reliable elements compared to competitors?
This assessment is critical in determining what motivates us to respond, what response strategy we should adopt and how much effort we should put into responding.
Process and tools
Who does what?
Qualifying an opportunity and deciding whether to respond to it or not can be divided into several roles and several players. A possible organization is as follows:
- The Business Manager provides answers to all the questions he can answer thanks to his client and market knowledge.
- The pre-sales engineer/bid manager or an offering manager provides answers to the questions he can answer by analysing the specifications and the documents in the consultation file.
- A manager provides answers concerning the availability and competence of resources and the completion of similar projects.
- A legal manager may also be involved at this stage to assess the contractual and legal risks.
- A manager or director decides whether to respond or not (and why/how).
With which tool?
Lack of formalisation can be an obstacle to good qualification: you don’t ask yourself all the questions you should, you don’t know how to answer certain questions, you waste time, you don’t have an overview to help you make decisions, the analysis isn’t done in the same way depending on the people involved, etc.
To avoid these pitfalls, here are a few tips for creating your own qualification grid:
- List in an Excel-type table between 15 and 25 questions to systematically ask yourself for every new opportunity, taking care to have questions that cover the 3 types of question seen above.
- For each question, define a closed list of 4 or 5 possible answers. For example, to the question: « Is the level of competition high? » the answer choices could be:
- We are the only ones consulted
- Only 2 or 3 companies were consulted, and we know who they are
- Our estimate is that there are few competitors (< 2), but we don’t know them all.
- Our estimate is that there are a large number of competitors (between 3 and 10).
- Our estimate is that there is a very high number of competitors (>10) or that some competitors are strong market leaders.
The aim is to define questions that can easily be answered, without hesitation between the choices offered and without having to know the precise answer.
3. For each possible answer, assign a weighting and possibly a position on a SWOT matrix (is it a strength? a weakness? an opportunity? a threat?).
4. Identify any « eliminatory » answers which, if used, should be a strong incentive not to respond to the request for proposals.
5. Next to each question, prepare a drop-down list offering only the possible choices.
6. Make it possible to enter a free text comment in response to each question, to clarify the choice made.
7. Finally, provide a synthetic view of the answers given to help you make your decision. This could be, for example, a needle on a colour gradient, a weighted SWOT, a radar, etc. I recommend avoiding a raw score on a given scale to avoid overly binary decisions or the impact of crossing a threshold. Ultimately, it should only be used as a decision-making tool, and not to make decisions for you.
Decision-making
The decision whether to respond to a consultation or not is usually taken during a Go-Nogo (or Bid-Nobid, depending on the organization) review. The purpose of this review (generally 30 minutes) is to present a summary of the elements gathered to all the decision-makers, to discuss these elements and to formalise the decision taken. It is important to record this decision in the minutes or on the meeting presentation.
Actually, I should say decisions, because beyond deciding whether or not you want to respond, I also recommend that you define:
- Why did you decide to respond? (this will usually be to win the business, but it can sometimes be to aim for second place or to make yourself known to the client in anticipation of future responses or any other reason).
- How much pre-sales effort do you want to put into this answer?
- Which actions, if any, determine your go?
Conclusion
Implementing a well-thought-out, context-specific, simple and objective approach can maximize your chances of success, while optimizing your resources. By asking the right questions, structuring and visualizing your answers using the right tools, and involving the right players, you can turn qualification into a real performance driver for your pre-sales activities and your company.
Each decision – to bid or not to bid – must be accompanied by the reasons why you decide to respond and the effort you wish to put into it. These elements will help the pre-sales team define its response strategy.
The data gathered during this qualification process can also be very useful when assessing why you won or lost the deal: by assessing whether your initial assumptions were correct, you can learn from them for future deals, and thus become part of a continuous improvement process that will also help you improve your pre-sales performance and get the most out of your efforts.
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