Avoid these 5 mistakes during bid pricing

Here are the 5 which tend to repeat themselves ever so often. Leading to inefficiency, poor win rates and slower sales velocity.

Who’s going to bear the $145K difference? Well it hurts even now. For the prime bidder this was about a $16 mn deal with 3 key solution components and a 7-yr pricing including implementation and annuity. As one of the OEMs, I had sent 5 versions of my pricing to him over 2 days with the last 3 sent in quick succession, hours before the submission.

The prime bidder’s bid manager did not look at the correct version and ended up quoting less for my components. He was torn between consolidating the bids from various OEMs n internal practices, and getting it approved on time. Who is to blame?

Lesson – If you are the prime bidder, have proper version management system along with synchronized alerts which can help the bid manager capture the correct version. Better still allow the OEM or sub-con to directly upload their version onto your bid management application.

If you are the OEM or sub-con, well, do not wait to submit your correct pricing till the last moment. As you see, it can hurt for a long time to come.

  • Didn’t we agree to go with 18% on this deal? Bid submitted, L1 secured, negos done .. awaiting final PO. And then the surprise .. more of a shock!

    We realized that there was a disconnect between the margin we had approved and what the sales team had concluded with the customer. This led to ensuing, heated arguments and finger pointing about who was right. It was my word against yours. Everyone had assumed .. no one had recorded. Whatever was recorded was never reviewed as everyone believed that, well, everyone was on the same page. With the customer negos concluded, nothing could be changed now. A victorious environment, unnecessarily engulfed with sadness.

    Some of this is due to lack of discipline. But mostly it is due to lack of systems. Well, email is a system but it can get corrupted, lost, tampered with or unable to be retrieved. If you are a solution, provider it is best that the approvals are not driven by calls alone but by a workflow based approval system. With a system in place to record the approvals, observations, n comments it’s impossible to be wrong about what was agreed. There is a reason why Jeff Bezos likes to run his meetings with a written memo.

  • Who approved this? This possibly is my favourite one. And I have written about it here. It’s an extension of the above where if it’s not recorded, it’s difficult to trace and track the previous proposals. This matters especially when its renewal time.

  • Pls rush and ask for an extension now! I’m sure we have done this umpteen times in our career. Ask for an extension to the submission date at the eleventh hour. Why does this happen? We are waiting for that super discounted pricing from a key OEM. The solution design was much too complex than envisioned earlier. And more.

    Most solution providers use a project management software but rarely does one systematically track the progress on bid development. We still continue to rely on ad-hoc calls, emails, pings, updates, escalations – only to realize it is too late!

    If not a sophisticated project management software, try a simple tracking system and you will find that there are less surprises than expected.

  • What was the discount trend in this account across all the bids submitted last year? Every organisation has its own version of the bid P&L – detailed pricing with margins, discounts, scenarios, assumptions, etc. Still there will be at least one question which will leave the bid team scrambling to get more data from their laptops. Most of the data is available but the analysis awaits the right question.

    Instead if a set of analysis is made available as a part of the bid P&L or a bid dashboard, it will ensure that even the most un-anticipated questions are answered swiftly.

  • Comments and observations welcome at hello@pricebid.co.