Winning the beauty parades you want

Over recent years, as the professional services market has become more competitive, many firms have seen involvement in new business pitches run into several thousands of pounds and sometimes for no return. This is both a huge waste of resources and demotivating to all involved.  Yet it is rare for a firm to decline an invitation to tender.

In a new series of articles for PSMG, we will discuss how responding to every tender invitation will not necessarily win business that secures long-term profitable income and growth targets. We will give tips and advice on how marketers and business developers can encourage their firms to be more selective about new business pitches.  By being more strategic, firms can use what precious resources they have to win the pitches they want.  They can also do this in a way that doesn’t harm their reputation with prospective clients whose business they decline to pitch for.

Choosing to decline an invitation to tender is a brave thing to do. The first step in being more selective, is to understand your firm’s past pitch performance.  Comparing this information to your firm’s new business targets will be crucial in any attempt to try and achieve them.   Sadly many marketers and business developers are brought in at the last stages of pitch preparation.  We would suggest their involvement should be secured as soon as an invitation to pitch comes in.  In trying to change partner opinions and a firm’s approach to beauty parades, measurement and an understanding of past results provides the strongest form of ammunition available to marketers and business developers.

So, before you read this article any further, we’d like you to make a little calculation.  Consider a recent invitation to tender that your firm was involved in but was unsuccessful. You might need to talk to your firm’s financial director or equivalent for this information but try and calculate:

  • The cost of the fee-earner hours involved in the whole pitch process
  • Now add the support services people’s time that were used
  • Add in the opportunity cost, ie what you could have been doing instead
  • Add in the cost of all the materials that went into responding to the pitch
  • Put it all together for the total cost of that new business pitch 
  • How much did it amount to? How much was the piece of new business worth in contrast?

You will probably be surprised at the cost of an individual pitch, when looked in this light.  You can be sure your partners will be too!  By compiling this information regularly for every pitch your firm undertakes you will be accumulating valuable information which will not only will illuminate the cost of pitches over time, but will also show the profitability levels your firm is achieving as a result of taking part. This will put you in a stronger position amongst partners to influence which beauty parades your firm pitches for and which it declines.  It may even involve your input to the level of fees quoted for a particular piece of business.

When measuring pitches, the more successful firms segment different types of beauty parades.  This enables them to piece together a picture of those they are more successful at winning.  Different types of pitches include:

  • Extensions of existing work/projects from current clients
  • New work of the same type carried out for the client in the past
  • New work never carried out previously for the client
  • Work for a prospective client were we have proactively identified the opportunity
  • Work for a prospective client where they have approached us to bid.

In developing this understanding, some even go as far as forecasting the probability of their chances of winning a new business opportunity and we will be discussing in future articles the checklists these firms use.

Understanding your firm’s success-rate in beauty parades is the first step to re-channelling its precious resources to win the pitches it wants.  Measurement of pitch performance provides just that information.  In our next article we will address another tactic for a more strategic approach to beauty parades, that of determining who do you really want in your client portfolio and building a relationship with them prior to a pitch situation arising.

 

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