BIDDING When You Should (or Shouldn’t) Bid for a Sale


As the cost of bidding for a project is usually high, businesses cannot pursue each and every opportunity. As a result, bid/no-bid decisions are critical strategic issues: How can a firm rigorously and efficiently prioritize bidding opportunities before developing expensive proposals?

Facing this challenge, the author de- veloped a novel approach to quickly make disciplined bid/no-bid decisions about complex business-to-business project opportunities. The method, which was successfully implemented in companies of different sizes and markets, is based on an assessment of both the attractiveness of the project and the competitive strengths of the bidding organization.

BALANCING EXTERNAL AND INTERNAL FACTORS Thoroughly performing this as- sessment means balancing a large number of disparate factors. To help executives achieve this balance, we split the approach into two simple surveys (the 20 questions in the downloadable PDF), each illustrated by a specific matrix. One is customer centric (or external); the other is com- pany centric (or internal). The two matrixes can then be

merged into the conclusive bid strat- egy matrix. On this final matrix, each opportunity is placed at its mean po- sition between the first two matrixes. As depicted in Figures 1 and 2, every bidding opportunity falls into one of its four quadrants, i.e., must win, no bid, low attractiveness dilemma, and low ability dilemma.


Should your company bid for this project and commit to a costly bid preparation? Let’s take five minutes to position the opportunity on both the internal matrix and the external matrix and make the right bid/no-bid decision: Answer the 20 questions in the down- loadable PDF at the link above with your account team to properly evaluate the project opportunity.

For each question in the left-hand column, select the answer that best describes the project opportunity. Multiply the corresponding point value by the specific question weight. Add the five weighted scores of any particular section to determine the bid opportunity’s coordinates on the related matrix axis. The weight factors reveal the rela- tive importance of the correspond- ing questions. The set of weights provided in the linked table reflects the characteristics of the author’s industry; you should hone them to fit your specific business profile and challenges. Keep in mind that the weight sum for any section should equal 1, so projects will be posi- tioned on a 0-3 point scale axis. The author implemented this set of 20 questions into a spreadsheet, au- tomatically charting the matrixes. Its


simple graphical user interface allows teammates to evaluate any bid op- portunity in 20 clicks, i.e., in less than five minutes. The resulting ease of use has made account teams positively adopt the bid screening tool. The questionnaire can also help

resolve differences of opinion among team members by unearth- ing the precise aspects of a lead evaluation that generate disagree- ment. For example, if two people find out that they disagree whether the customer budget for this proj- ect is adequate or too low, they can thoroughly discuss this topic to reach a consensus on the best answer. The exercise simultane- ously prompts them to broaden their respective understanding of the op- portunity. At last, if teammates cannot arrive at a compromise, note that hesitating between adjacent answers to one or two questions will usually not drastically alter the position of a bid opportunity on the matrix. Account team members’ personal stakes in a bid/no-bid decision may lead them to lose sight of their own company’s interests and, one way or another, misuse and manipulate the questionnaire. To avoid cursory – or even misleading – evaluations, it is important that the team regards the screening tool as a real lever to secure company resources and not as “just another administrative task imposed by management.” A sound practice is to encourage employees from across functions (with an emphasis on non-sales functions) to voice concerns about the upcoming project and really challenge dubious statements. 

Cedric Girardclos holds an MBA from ESSEC Business School in Paris and is the cofounder of Adjungo – a high-growth, innovative IT services company based in France:

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