How long should a critical revenue-impacting process remain broken?
VP-Sales: Hey why are the approvals getting delayed?
Sales Manger: Sir there is some discrepancy in the bid price and Finance has raised objections.
Pricing Manager: The BOM in the pricing sheet is not matching with that in the solution document.
Solution Architect: Not sure how this was configured but the current team does not think it will meet client SLAs. How did this get approved?
VP-Sales: Can we check with the partner if he is willing to take the hit.
Sales Manager: Done that .. looks difficult.
VP-Sales to CEO: Boss I think we have a ($145K) problem on hand …
B2B pricing is an iterative, long-winding, multi-stage process - solutioning, estimation, pricing, revisions, review and finally approval. With multiple execs working parallely, cracks can form un-knowingly. And since the process is mostly run on office productivity tools, it becomes challenging to trace the gaps and plug them .. before it’s too late.
As the above example shows, keeping gaps unattended can have dire consequences – revenue loss, and business reputation risk. Other examples include - mis-placed approvals hurting renewal negotiations, lack of historical bid price information impacting deal pricing decisions, and improper approval capture hurting deal margins. In short, one broken process leading to multiple pain points – sub-optimal deal strategy, ineffective bid pricing decisions, poor win-rates and lower bid team productivity.
Here are 3 basic ways in which you can strengthen the crucial bid pricing process:
Technology – What percentage of sales do you spend on pre-sale technology? How much should you invest in enabling technologies for your bid, tender and pricing teams? Answer – 0.5-0.75% of your funnel or 3-5X of your annual target. Bid, proposal, and pricing teams still get handed down the old world, traditional office productivity suites. Even when the annual targets increase, the only increase in the bid team is, generally speaking, headcount. While many enabling technologies have come up in areas such as – bid management, response automation, configurators, price calculators, collaboration – their adoption in the bid function is limited. Other important areas which can benefit from technology advances include solutioning, assignments, bid pricing, reviews, approvals, document repository, team communication, and analytics. A solution that can digitize, automate, capture and analyse the end-to-end bid process, directly or thru API integration, can have massive benefit in terms of revenue uplift or revenue assurance. When you avoid or delay such investments, you are in fact hurting your chances of meeting your quota.
Transplants - Without an understanding of the market dynamics, the internal teams have no view as to how their efforts matter. At best they are making a good guess about the downstream and upstream processes. A close-enough view of the action from the bunkers will give them a realization about the real-life scenarios – demanding customers, decision parameters, competitor influence, variance in bid price and ask price, etc. Why not plant these executives on-to one of your pursuits as team member, involving them in client calls, site visits, presentations, etc. This will make them more responsible and help them acknowledge the work done by other team members.
Trainings – I’m sure many of you have heard of PMI – Project Management Institute. Have some of you heard of APMP (Association of Proposal Management Professionals)? Or IIBA (International Institute of Business Analysis)? As the name suggests, APMP is for Bid & Proposal Professionals whereas IIBA is for Business Analysts. And there is IACCM (The International Association for Contract & Commercial Management) for contracts & commercial management professionals. Without a doubt these are key members of the pursuit team working on better understanding & analysis of client requirements, and superior communication and commercial structuring, respectively. The quality of their output can have a direct co-relation to the bid outcomes. Encouraging them to improve their skills can greatly benefit the revenue upside. And yes, no harm including include them in Miller-Heiman or Dale Carnegie trainings as well.
If it ain’t broke, don’t fix it. Doesn’t apply here. The time is now!
Comments and observations welcome at firstname.lastname@example.org.