The cost of winning business just went up!

Media Release

3 September 2008

The cost of winning business just went up!

The increasing complexity of business has driven up the cost of pitching for large accounts by as much as 100 per cent, according to a global survey on pitching and tendering.

The 2008 RogenSi Pitching Survey asked 2000 business leaders in 15 countries about the changing trends in the worlds of bids, pitches and tenders.

Sixty-five per cent of respondees said that the cost of pitching has risen between 50 and more than 100 per cent in the past ten years. Furthermore, 13 per cent said they would invest up to $500,000 to win a piece of business that contributed $5m to their profit.

"Pitching has become an expensive business in its right," said survey author and RogenSi global director, Neil Flett. "It has never been more competitive, nor more challenging and the biggest increase in costs is coming from the investment required in understanding the complexity of a client's business before creating a winning solution.

"Previously, having the best solution was seen as being the most important factor in winning a multi-million-dollar account in 40 per cent of cases," he said. "Today, this has dropped to only 29 per cent. Now, the main reason is seen as not only understanding the client's business, but also having the client feel that you do.

"Convincing the client that you have a workable solution is now a 'given'," said Flett. "The level of competition in the marketplace means it is usually the case that any one of the finalists in a major bid would be able to create a solution that works. Clients are also becoming more sophisticated and are looking beyond the solution itself to how it will be delivered and by whom. The relationship that will exist between the supplier and the client, and the understanding that the supplier has of the client's business have increased in importance.

"Today, we find that the top performers are investing significantly in delivering value to clients, months and even years before a bid is called. It can be a costly strategy but it means that when a pitch is called, that supplier not only understands the client's business at a deeper level, but is already considered to be a trusted partner. They carry that advantage into the pitch process.

Recipients said that the increase in the use of procurement specialists and departments was the biggest change and the main challenge in pitching.

"There is little doubt that procurement specialists are having an increasing impact on how bids are decided," said Flett.

"It is now common for all bids to first pass through procurement where their capabilities will be checked against the needs of the client. At that stage bidders will be shortlisted. With strict governance in place, particularly when responding to Government tenders, it is now common for suppliers to be crossed off the list, without ever meeting the final decision makers. But it also means that finalists are usually all able to deliver a solution and so the winner is chosen for the additional values it brings to the bid table.

"The last bid for the Summer Olympics was prime example," said Flett. "Each of the finalists was checked out by the Evaluation Committee against the strictest of criteria. And all could have delivered the Games in 2012, but London won with an emotion-charged 45-minute presentation which focused on not only delivering the Games, but on protecting the future of Olympism by introducing millions of children around the world to Olympic sport."

The complete RogenSi White Paper "Perfect Pitch" is available from the RogenSi website: www.rogensi.com

ENDS

© Scoop Media