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Why is it that some companies grow prosperous on the fruits of their success at winning major bids while others think themselves lucky to garner a few crumbs from the feast?

Just why is it that some companies consistently win more major bids than others?

What do they do that makes them so successful?

Senior marketing and sales managers have long sought answers to these questions, often with little success. Not surprisingly, the most effective bid winners prefer to draw a veil over those factors that make them successful.

But research has pulled the veil aside and provides a glimpse of the critical success factors in winning major bids. The research is part of a major project undertaken by the Faculty of Management at the University of Luton.

As part of the research 293 companies answered a detailed questionnaire, which focussed on two key areas – how successful they were at winning major bids and what they regard as the factors that made them most successful at winning the bids.

The companies in the survey represent a cross section of those British companies that compete in major bids either in the UK market or overseas and came from industries as diverse as information technology, construction, engineering, aerospace, media, consultancy, manufacturing and utilities. Between them, the companies have a combined turnover of more than £65 billion. For the purpose of the survey, a bid was defined as either, a one-off purchase or a contract for ongoing supply over a specified period

They were candid about their success; some 37 % admitted they won less than a quarter of the bids they pitched for. A further 40 % said they won between a quarter and half of their bids. Only 4 % of the companies claimed to win more than three-quarters of their bids.

There was little disagreement that winning major bids was essential to achieving business plans – 53 % said it was very important to win bids from new customers and 65 % from existing customers. Given that winning major bids is important for achieving business plans, just what is it that gets a company invited to bid in the first place?

The companies were invited to rank a number of different factors on a scale running from “very important” to “not important at all”.
 
The top five factors are:
• Perceived quality of your products/services
• Relationships with existing or potential customers
• Position of the company in it’s market-place
• The company’s overall image
• Track record in similar projects

However, if 77 % of companies win less than half the bids they pitch for – what do the best quarter have, that the other three-quarters lack?

A yearlong research project undertaken by Mathew O’Connor, one of the co-authors of the report, identified 18 activities, which contributed to success

These activities fall under four main categories:
• Assessing the customer’s perception of products/service value,
• Understanding the customer’s buying centre, (Decision-Making Unit)
• Contacting customer’s regularly and reviewing the relationship
• Communicating key messages about the company and it’s products/services)

Companies that win less than a quarter of bids, claim to perform an average of only 2.9 of the activities very effectively. Among companies winning a quarter to half of bids, the number of very effective activities rises to 3.5; those who win half to three quarters of their bids perform 4.9 activities very effectively: among those companies winning more than three-quarters of major bids, the number of very effective activities climbs to 8.7.

What is perhaps surprising here is that even the most successful companies are accomplishing less than half of the critical 18 activities “very effectively”. It seems pretty clear, that those companies prepared to focus on these activities and generate even a modest increase in the number of activities performed very effectively, could reap significant improvements in the number of major bids they win.

Aside from these critical activities, the research has uncovered some important issues for managing effective bid teams. The companies in the survey were asked to rate 15 aspects of managing bid teams on a five-point scale from “very important” to “not important at all”.

The top five issues are:
• Leadership from senior managers
• Creating a team spirit
• Leadership from board of directors
• Including team members with specialised knowledge of the product / service
• Giving clear instructions to team members on how to handle the bid

Carol Kennedy, a co-author of the report, says: “There is wide range of different issues that companies need to address more effectively if they are to win more of the bids they pitch for. Bidding relationships with the client is given a particularly high priority in the service sector.”

“There are wide variations in the effectiveness of major bid management between organisations. With more companies increasingly finding themselves pitching against overseas competitors for business, the need to create more effective bid management and use a strategic approach is more urgent than ever.” 

To read this article, “The Myths of Bidding Exploded” in full, please click here:

 

Today’s News: Over at AllBusiness.com, you can catch my latest “Ask the Expert” podcast – “Why Sales Managers Need To Be Coaches”

And you may also enjoy my AB blog post “Oh No, Not Another B****y Sales Meeting”

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