Five things you should know about… contract rebidding
1. Rebid win rates vary from company to company
Some win as many as 90%. Others win as few as 40%. Every rebid lost is revenue and profit that needs to be replaced, but new win rates are typically lower than retention rates. If you need to spend more to win comparable levels of new business why not invest in keeping what you’ve got?
2. Run the contract well
How well you have run the contract is hugely important to how good a position you start the rebid in. If you’ve performed poorly not only will the customer be looking for a new contractor, but any promises you make of great things in the future will be met with the question “So why haven’t you been doing that for the past X years when you had the chance?”
3. Build the business case
Even if you’ve run the contract well, have you gone beyond the specification to really get the customer positively wanting to do business with you above all your competitors? And can you properly evidence that in the rebid? If you haven’t collated all the great things you’ve done during the contract they will probably have been forgotten by the time of the rebid. If not by you then by the customer — even if they do they can’t give you marks unless you’ve written it down.
4. Start the rebid early
Starting the rebid at least a year (preferably 18 months) before the end of the contract is vital. That’s usually when the customer starts thinking about what they want in the future contract. Starting early gives you time to influence this. It also gives you time to review the contract, put anything that’s not working well right, collate all the information you need for the rebid and get the right team in place who can put in an innovative, well-priced solution.
5. Build the right team
Getting the right mix of skills and experience in your rebid team will pay dividends. Too much influence from the existing contract team leads to ”more of the same” but if the contract team are ignored you lose the detail of the customer’s day-to-day needs that can make your solution convincing and workable. But always challenge every assumption of what the customer needs – if it isn’t in the specification, don’t price it.
By Nigel Thacker, author of Winning Your Rebid, which is available at www.gowerpublishing.com/isbn/9781409440352