Bid/No Bid Decision

(Spend less. Win more. There’s a free worksheet below.)

Most would agree that responding to Request for Proposals (RFPs) is an important part of a business development strategy. Oddly enough; however, the approach to making the bid/no bid decision varies greatly.

Some organizations take a holistic approach. For them, proposal writing is a part of their long-term sales cycle. They market to the potential client, help shape the RFP and pre-sell the solution. They know their bid decision before the RFP is ever issued.

Other organizations take a different approach. They’re the renegades who bid blindly. They have no information outside of that which appears in the RFP. Their process goes like this: they scour thousands of notifications and respond to every RFP that comes across their desk. In their shotgun approach to bidding, they rarely know the solicitor, don’t know whether an incumbent is in place and unfortunately, don’t even know whether winning is valuable.

Organizations in this last category are destined to lose. For starters, they fail to account for the cost of bidding. That cost includes the labor of the proposal team, the cost of proposal graphics, printing and delivery. Consider this: if it costs $10,000 to slap together a proposal and you respond to 25 RFPs before you win, the winning bid must have a profit margin of at least $250,000 to break even.

This shotgun approach has some hidden costs, too. For starters, it results in the preparation of ill-informed responses. Poorly prepared responses can degrade your reputation in the marketplace. You can be certain there’s a cost associated with that.

Surprise! The new client doesn’t pay in a timely manner. Ouch! They’re a heavy consumer of your management resources. Ugh! This is what they expect from the deliverable. When organizations bid blindly, without the knowledge they need, they often lose. This is true regardless of whether they win the bid.

Unlike cold calling, proposal writing isn’t a numbers game. If you’re treating it like one, you’re wasting resources.

Proposal writing is better viewed as a game of continuous process improvement. To improve your odds of winning, start by making a better bid/no bid decision. Better decisions reduce the number of opportunities to which you respond. This means they decrease the costs associated with winning. Better bid decisions also reduce your exposure to risk.

When you bid on less opportunities, more resources are available to: market to the client, pre-sell the solution and prepare a more knowledgeable proposal. When you make better bid/no bid decisions, you’ll improve your odds of winning.

The plan we’re referring to is an RFP evaluation process. Consistently implemented, it enables swift and informed bid/no bid decisions.

To put this process in place, assign one or more RFP evaluators and decide who will have the final decision making authority. Perhaps a gated review process is best.

Next, determine your evaluation criteria and make a list. Most would agree that the solution must align with strategic objectives and that winning must be profitable. Consider your specific industry and organization and determine what else the evaluation criteria should include. This is a good place to engage the entire team.

With a bid/no bid decision-making process in place, everyone on the team will know exactly what must happen before proposal development can begin.

Lastly, record your evaluation criteria and apply it to the next RFP. Here’s a free bid/no bid worksheet to get you started.

The worksheet contains about 60 evaluation questions. Each question includes a place to record an answer and a drop-down list to provide a score. Once the answers are scored, the worksheet will grade the RFP.

This bid/no bid worksheet is customizable. Change the questions, and anything else that will provide a better fit your organization.

Think of this template as the starting point for implementing a consistent approach to RFP evaluation. Once you have a process in place, you’re ready for continuous improvement.

By consistently evaluating opportunities and making informed bid/no bid decisions, you’ll respond to fewer opportunities. This means you’ll spend less. When you spend less, you’ll have more resources available for the right opportunities. When this happens, you win more and that’s the goal.