CRM Enabled Services can ramp up Bid To Win Ratios not the Discounts!
Competing for new business is a tough bid in the age of “disruptor” start ups and the socially engaged, multinetworker. Professional services that find they are increasingly going after the “low hanging fruit” may already feel they’re out of the running. It can be a slippery slope. Today’s auction house for lucrative contracts is definitely further up the hill in a landscape increasingly reshaped by digital transformation. As a result, those companies that lean in and ramp up the discount to win more contracts will only likely see reduced profitability in the longer term. In recent years, counting the bid to win ratios for some firms may already be having a negative effect. One review of more than 400 professional service organisations found that for every 10 bid-to-win ratios, the success rate had dropped from 5.19 in 2012 to 4.85 in 2016 (The Professional Services Maturity™ Benchmark Report, 2017 - SPI Research). The Report also reported that while heavy discounting of the bid price by more than 30 per cent increases the win rate from 45 per cent to 58 per cent, inevitably both revenues and profitability would be severely reduced.
In the age of digitized customer experience, professional services need to start asking questions about whether the ongoing interactions with their target customer base are in need of a serious overhaul. Those who fail to maximise customer relationships across their entire infrastructure of online engagements risk losing more future bids to the CRM-enabled. The latest Edgewater Fullscope whitepaper discusses how “Giving the right information at the right time” and “Empowering through connected technology’ is essential to the future of professional services. Free download here.
The hammer falls in favour of the CRM-enabled service provider
Winning the customer’s heart and mind is where the real bidding for business takes place. This is not new insight. But the present socio-cultural shift driving Industry 4.0 means there is no reserve on the bidding value of customer experience. The hammer increasingly falls in favour of the CRM-enabled service provider in achieving their winning ratios. But those professional services struggling to compete may simply not be aware of just how far digital transformation of CRM swings the win to loss ratio to a successful performance rate.
Business analysts suggest that after factoring in the number of competing tenders and prevailing market conditions, a good performance rate is considered to be around 40 per cent. However, the single best predictor of bid success - and the greater proportion - is attributed to CRM and the existence of a strong customer relationship. Companies without a “relationship” with the customer may only have a win ratio below 10 per cent. (Persuasive Business Proposals – Sant, 2004).
The prequalified, trusted relationship - reinforced by seamless digitised access and interaction at all customer touchpoints - is where companies must bid to reposition their brand as a serious service provider. To achieve digital transformation requires an organisation to re-imagine both their customer’s experience and its employee experience. The latest Edgewater Fullscope whitepaper pinpoints the key areas where professional services may fail to recognise how CRM can replace established habits of reckless competitive tendering to dramatically reposition brand perception and reverse dwindling revenue performance. Free download here.