How important is it to have a bid management book? Well, if tracking market data is important to your company, then it's a fair assumption that tracking your success on bids is an essential part of growing market share. Whether that means tracking business won and lost at various price points, or keeping track of competitive bids, a tracking mechanism is an essential aspect of retaining and using market data. For instance, let's assume your company operates in what would be considered a commodity based sales market. How would you be able to track pricing relative to fluctuations in customer demand? How would you track the impact of various business cycles on market pricing? It's essential that your company track not only your own pricing, but that of your competitors as well. Therefore, why do some companies track market data, while others simply decide to match the lowest competitive bid?
Unfortunately, a large number of enterprises attack their market by appealing to the lowest common denominator. Instead of tracking pricing with a bid management book, they decide to simply match the lowest bid price. The idea is to steal business by appealing to a customer's need for lower costs. What these companies fail to realize is that not all customers buy on price and price alone. Granted, there are those customers whose main criterion is the sticker price of the product or service they're purchasing. However, there are other customers who value more than just the price of a product. These customers value the service provided, the quality of the product and the company's ability to support their offering.
The reality is that unless your company tracks bid prices in your market, then you'll never be able to identify those customers who are interested in a value-added sales approach, one that accentuates your service excellence and one where a partnership is more valued than just matching the cheapest available option. Today's economy may demand competitive prices, but that doesn't necessarily imply the lowest price always wins the day. In fact, it's quite the opposite. Customers today want value and they equate value relative to what they get when they make a purchase. If your company simply matches the lowest bid, and fails miserably on service requirements, then you'll never be able to retain those customers for the long-term. A value-added sales approach is one where your customers are able to benefit from a competitive price, all the while benefiting from excellent customer service. One without the other never wins.
Start by tracking competitive bids. Track the sales your company secures relative to the volumes those sales were closed on. In addition, track those sales you lost relative to the volumes you lost them at. Tracking how and when you lose sales will allow you to dial into those business cycles, or periods, where bid prices should be more competitive. In essence, it's all about identifying your customers' seasonal order patterns and looking for any clues as to how and why customers order at certain price points.
Today's enterprises must be able to improve their market knowledge. This implies keeping abreast of all things related to their market. They must understand their competitors, their customers and most importantly, how and when they win or lose business. In addition, tracking sales relative to volumes will help the company identify any emerging trends within their market. Only by tracking pricing within their market can a company benefit from that market knowledge.
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