Extensive research recently completed by the Corporate Transformation Department at Luton University in England, confirms suspicions and beliefs that I have had for some time now.

In business terms, they claim that these findings represent a revolutionary breakthrough in understanding what makes a successful contract bidder.

Two key facts tell a worrying story:

1. 50% of them said it is important for them to win new business in order to fulfill their corporate plan.
2. And yet four out of five companies interviewed win less than half of the bids they pitch for.

Conclusion: Most companies are not winning enough new contracts to meet their business objectives.

Not unnaturally, this would cause some anxious looks around the boardroom table if it were not for another key finding from the report.

A small improvement in bidding techniques and tactics can lead to a disproportionately large increase in the number of contracts won.

Not surprisingly, the most effective bid winners prefer to draw a veil over those factors that make them successful but the research has pulled the veil aside and provides a glimpse of the critical success factors in winning major bids.

The companies answered a detailed questionnaire which focused on two key areas – how successful they were at winning major bids and what they regard as the factors that made them most successful at winning the bids.

Figures are rounded to the nearest decimal point. The companies in the survey represent a cross section of those British companies that compete in major bids either in the UK market or overseas.

The participants came from industries as diverse as information technology, construction, engineering, aerospace, media, consultancy and utilities.                                  

The companies were candid about their success.  Some 37 per cent admitted they won less than a quarter of the bids they pitched for. A further 40.1 per cent said they won between a quarter and half of their bids. Only 4.1 per cent of the companies claimed to win more than three-quarters of their bids.
 
But for these companies, what constitutes “success” at winning major bids? Among the companies 71 per cent “strongly agreed” that it was to win bids at “acceptable profit margins”, while an almost mirror image of 70.6 per cent “strongly disagreed” that it was to win a bid “at any cost”. Among other possible definitions of success 31 per cent strongly agreed that it was winning sufficient bids to achieve growth targets, and 19.2 per cent winning bids from blue-chip customers.

There was little disagreement that winning major bids was essential to achieving business plans – 52.8 per cent said it was very important to win bids from new customers and 64.5 per cent from existing customers.

Given that winning major bids is important for achieving business plans, just what is it that gets a company invited to bid in the first place? The companies were invited to rank a number of different factors on a scale running from “very important” to “not important at all”.

The top five factors are:

1. Perceived quality of your products/services (68.5 per cent say very important)

2. Relationships with existing or potential customers (54.4 per cent)

3. Position of the company in its market-place (52.2 per cent)

4. The company’s overall image (47.6 per cent)

5. Track record in similar projects (46.5 per cent)

However, as the survey shows, more than three-quarters (77.1 per cent) of companies win less than half the bids they pitch for.

What do the best quarter have that the other three-quarters lack? Watch out for a follow-up post next week!

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