Contractors, architects, engineers and any other business pursuing significant projects should have clearly defined and, where possible, evidence-based systems for determining which projects they pursue, and (linked with this) a system to measure the pursuit costs, both in time and resources.
This is a blanket statement, and it is easy to diverge from the rules without a checklist or matrix system to manage and measure things.
However, your business will soon be in trouble if you don’t have set of rules about when and where to pursue work.
Consider, for example, UK-based construction marketing consultant Bob Evans, who wrote in a recent blog posting that he would generally only accept negotiated price opportunities, and “I would only price work in competition if I knew I was going to win, or had a good chance of winning. This strategy improved our sales conversion to over 80%”
Many of you reading this will be thinking that it would not be possible for your business, this is a false belief. It is possible. It may take some time to get there, as you may have to implement systems and deploy marketing strategies to position your business but it can be done.
I created a Tender Score Matrix to score the opportunities. If the score was over 80 we would focus and spend time on the opportunity. If they scored between 50 and 80 we would spend less time on the tender and over price it to ensure it was safe. If they scored below 50 we would return the tender with a good reason. The reason could be we do not have the case studies to back up our competence.
Score Matrix – Score your opportunities for example:
- What are your chances of winning the work?
- How many are pricing it?
- Have you worked for them before?
- Have you carried out this type of work before?
- How far away is the work?
Put all your efforts including a winning presentation into the jobs you want. Pursue them aggressively.
Remember there is no prize for coming second. Improving your sales conversion ratio will reduce your tender costs at the same time. It’s about working smarter not harder.
Bernie Siben makes a similar argument in a recent SMPS Marketer article.
I have long ‘preached’ that A/E/C and environmental firms must have a strong go/no-go process that must be followed by every employee up to and including the CE, COO, and chairman. Such a process enables a firm to set egos aside and make good, rational and informed decisions about which projects to pursue and which ‘opportunities’ to pass up.
Siben’s concept of course takes the go/no-go matrix to a higher level — because clients can be more challenging to evaluate (unless you’ve worked with them before) than individual projects.
Siben provides this checklist:
- Do we already have a history with this company?
- Was the relationship good; was the project a success?
- Does the company have multiple projects coming up?
- Do they have interesting projects we will want to work on?
- Would we enjoy working with them?
- Do they articulate their goals/needs well?
- Do they understand and properly value our services?
- Would they recommend us to other potential clients?
- Do they pay consultant invoices in a timely manner?
- Are they “clean” at the BBB?
- Are they “clean” with my network?
- Are they close enough to visit without plane tickets and hotels?
- Is the vendor registration process straightforward?
- Is their selection process straightforward and transparent?
- Would we be proud to claim them as a client?
Of course, if you managed to find a client that scored well on all 15 points, I sense, unless you are extremely well-connected and the client is very private, that others will also know the opportunity, and so the challenge and cost of pursuit for the ideal client may be truly extreme (unless, of course, you’ve already done business with the organization and have the individual relationships in place to ‘wire’ the next projects.)
As well, there is another level to the go/no go process, which I’ve experienced only once in my 25 years in business. In this case, a truly satisfied client, then the chair of a committee of an industry association where we were also well-connected, asked me to submit a quote on a publishing project.Trouble is, the work at the time was totally outside our scope of competence and experience. I declined.
The client insisted — to the point where he sent (totally unsolicited by me) financial data and information from competing vendor. Obviously this sort of behaviour might be seen as unethical if I had done anything to seek it out — but the client knew what he was doing. He wanted me (badly) to bend my own go/no go rules and bid the work.
I decided that this situation called for a joint venture with partners with the specific competence and connections required to complete the work. With the team in place, we bid the project, and won it. (And the contract has continued for five years, generating hundreds of thousands of dollars in worthy income.)
I suppose, with a formal go/no go matrix, we might have said ‘no’ to this initiative, except for the out-of-scale client desire and long-term value of the work. But this example contrasts with the wishful-thinking bidders who also competed, some of whom travelled significant distances after seeing a brief advertisement, obscurely placed, inviting bids.
In other words, don’t rush for every job just because you think you can do it or because it is publicly advertised. Have rules in place. You want to compete where you don’t have much (real) competition, and you need to know when that situation is apparent.