Article – ‘Old-school’ reactive bidding = lower win rates - Shipley Asia Pacific

Recently we talked about the March-April 2018 issue of Harvard Business Review feature article on how to measure, and define, what B2B customers most value from suppliers. We acknowledged that ‘table-stakes’ compliance (“meeting specifications at an acceptable price in compliance with regulations while abiding by ethical standards”) and ‘functional elements’ (“companies’ economic or product performance needs, such as cost reduction or scalability”) offer little scope for differentiation from competitors.

In this article, we look at what value elements do make a difference for B2B customers and need to be understood and addressed in your offers and proposals.

Today we look at the third level of value: “make it easier to do business”.

At this level some elements provide quantitative measures of value, such as reduced effort, time or complexity. Shipley clients usually see these issues as their customer’s more visible, stated concerns and criteria.

Greater differentiation from your competitors becomes possible in areas measured qualitatively – the issues and criteria that “enhance relationships between parties, such as good cultural fit and a seller’s commitment to the customer organisation”.

The seller’s challenge with the value the buyer places on these qualitative, subjective criteria is that these are less visible, and often unstated in the traditional tendering process. As a result, many proposals fail to demonstrate an understanding of these issues.

And fail to provide answers or solutions to them.

And fail to win.

Where can sellers best identify and test assumptions around unstated needs? Pre-tender, in the pursuit or capture phase.

So ‘old-school’ reactive bidding has lower win rates because it does not have the opportunity to identify and address the subjective value issues that customers use to differentiate between two or more compliant offers. Win rates increase with earlier customer focus.