Everyone says that winning new customers is an order of magnitude harder than keeping the ones you already have. Is this true? And if it is, does that balance reflect the reality of how your business approaches contracting opportunities?
What gets all the attention in your business: pursuing the new or keeping what you have?
If you had two opportunities, one a potential contract with a client you’ve been after for some time and one a bit of business you’ve had for 10 years, where would you and your team be focusing?
Does that seem like an unfair question? In fact it’s probably a judgement you are making subconsciously every day, possibly without realising it.
In a series of articles I’ll be looking at some of the issues around being an incumbent supplier: how you should make the most of your advantages when rebidding, and some of the pitfalls of being an established supplier.
Losing a contract is tough
Sometimes businesses know that they’ve been underperforming and in some cases businesses have been looking for a way out of an unprofitable contract; but in most cases businesses approach rebidding with confidence. There’s no doubt that being the incumbent gives you an advantage, change means risk and it’s often easier for clients to stick with what they know. That’s why failure often comes as a shock – it’s rare to find a business that genuinely ‘saw it coming’.
When businesses lose contracts that they’ve had for some time it can be traumatic. And when the dust settles and the recriminations stop what you’re often left with is a picture with some common features.
When trying to work out what went wrong here’s what I often find:
But before we go on it’s probably worth reminding ourselves why retaining existing contracts is so important:
But probably the most persuasive reason is that the cost in time, energy and resources of retaining business is much smaller than for winning new contracts. And each new contract means another steep learning curve that you’ve already climbed with your existing work.
So the question for all businesses is how much effort goes into rebidding opportunities compared to opportunities with new clients?
The thrill of the new
We all like the buzz of securing a new piece of business with a new client, and businesses need to expand and diversify their customer base, but I’d make a strong argument for treating each bidding opportunity as though it were new. Alongside this I’d also put processes in place to ensure you gain the maximum possible advantage of your position as the incumbent. This approach gives you the best of both worlds.
Ask yourself this: Where do your most talented account managers and business development staff focus their energy?
In the next article I’m going to explore in more detail the benefits of being an incumbent and look at the ways you need to capitalise on these benefits during contract delivery and when it comes to rebidding.
The important message for now is to reflect on what it would mean if you lost one or more of your biggest contracts. And then look at your strategy for retaining that work – which actually means much more than just delivering what you are contracted to do.
It’s quite likely that your competitors will be aware of when contracts are coming up for renewal – particularly if they were unsuccessful bidders the last time. What have they been up to in the meantime; waiting around? Or have they started to cultivate relationships with your client? Learning the lessons of what they did wrong so they can make a better pitch next time around?
Never assume that the business is yours to lose.
Hugh Graham, The Bid Coach
If you have a rebidding round coming up I can help ensure you're leaving nothing to chance. Call me on (01963) 240555 or email [email protected] for your free initial consultation.
I have many years of senior sales and account management positions.
This experience taught me how to interpret exactly what clients are seeking, and what they need and expect to see and hear from the successful bidder. We draw on this experience to give your team an additional competitive advantage by building on their existing strengths while improving their team-working and self-awareness.