Tip: Have these 10 Analysis Ready!
What kind of bid analysis can drive better deal outcomes? We look at some common and some not-so-common analysis of your deal data, which can help you make better deal decisions.
Bid related –These set of analysis should help you make better tactical decisions regarding the bid – what should be our floor price? Can we take some liberty with the T&Cs? How are we placed in the account, historically?
Recent-5: This analysis should tell the organization what has been our track record in this account. It will list the recent-5 bids submitted to the account along with the respective outcomes. If the outcomes have been in our favour (in recent past), it should give you the confidence that the customer holds us in good stead. If some of the bids have remained un-decided, you probably do not want to give this opportunity a high probability in your forecast.
Similar-5:Which are the deals that are similar to the one we are currently pursuing? Similar in terms of - the value, industry, territory and solution components. Again, the outcomes of these bids should be an indicator of our ability to win (or not) such deals at respective margins/discount. TIP – While conducting bid analysis, most organizations focus mostly on commercial bid analysis, not realizing that technical sizing/ solutioning is the source of the commercial bid. One can also run a technical bid analysis comparing the estimates or BOM of the current bid with similar historical ones. This will enable the technical management to decipher if the efforts/BOM have been under, over or right sized.
Business trends –These analyses should help the organization determine the overall health of the business. It should ideally compare 3 years data to give you a meaningful picture.
Bid Funnel: This is a common one but also equally foundational. It tells you the demand generation velocity, the qualification effectiveness, and of course the win rate. Track all the stages, QoQ for optimum results. E.g. No. of enquiries received/generated>> No. of enquiries decided to be pursued>> No. of bids submitted>> No. of bids won/ lost/ no-decision
TIP – keep an eye on the bids you did not pursue. What was the outcome? Did it play out as you had expected or do you need to tweak your Go : No-Go process?
Value & Volume: Analysing the value and volume of bids submitted and comparing it to an earlier period visibly tells you about the health of your business. Extrapolating last year’s value & volume of bids, and applying the current win rate, can give you the best lead indicator about how your quarter/year is shaping up.
Win-Loss analysis: Capturing the competition details is an important discipline many sales people don’t follow. But if done well, it can be a crucial fodder for future deals. Capture the maximum grain you can – total price, technical score, solution component level price. At least for 2-3 competitors per bid. Slice the data to see how different territories or BUs are faring with their win ratio.
Competition: Needless to say, one can’t do competitive bid analysis, if the competitive information is not captured. Assuming it is, it will be interesting to see who’s your Closest competitor. Everyone in the organization knows this anecdotally. But if you plot the data of bids lost, and sort based on who was the winner (within lost bids), it will present your true nemesis. Is a certain competitor stronger in certain territories or in certain solution areas? If you can add the data of the bids you did not pursue, a good-enough market share report will surface.
TIP - Similar analysis can be developed for your partners/vendors or sub-contractors.
Margin or Discount trends: Most organisations tend to calculate this. From a deal perspective it’s important to overlay this analysis with the deals won/lost. What is our margin range when we win? When we lose, how much does this range change? How does it vary by solution component or territory?
TIP - Organizations can build variance analysis that charts approved price with the closed price. This will highlight sales effectiveness in managing negotiations relative to their approval asks.
Productivity: Given that we are always short of time in submitting the responses, productivity matters. A bid timeline report should map all the key stages of the bid development (creation> assignment> review> approval), and show you how it progressed. Where are the repetitive bottlenecks? How can we minimize them? And where do we need to add capacity.
TIP - The bid participants can also get a view of the bids they have worked on and what % of them were won/lost.
In Summary, bid analysis software should provide analysis at the bid level and at the business level. The bid level analysis should have both technical bid analysis and commercial bid analysis of recent and similar bids. Whereas the business level analysis should deliver trends and insights which can help the organization take strategic decisions.
But wait! Before you start fantasizing about all this analysis being available at a click of a button (or the flick of a finger) thru a bid analysis software, do realize that the quantity and quality of data is paramount. Some may consider it the dirty part or the hard labour. But the truth is that reasonable amount of dependable historical data is the starting point for BI or AI.
So, can we also apply AI to Bid Management? Yeah .. of course! Check this out.
Comments and observations welcome at email@example.com.