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Top 5 Reasons Service Providers Lose Bids

by ISG

Outsourcing deals are won or lost on seemingly insignificant details. Competition is fierce, with no room for error. So what causes a client to choose one vendor over another? What’s the razor-thin difference between the winning bid and the close second?

ISG has outlined the top 5 reasons that outsourcers lose business, and identified specific steps providers can take to avoid these mistakes and develop a winning strategy.

1. Lack of insightProviders often respond to the stated reason the client is going to market, and don’t understand the real organizational and individual agendas driving the initiative.  If these nuances aren’t addressed, the proposed solution fails to resonate. More specifically, if providers don’t know what contracts are coming to term and what opportunities are arising, they scramble to respond, rather than proactively plan and prepare to put the right people in place to define a winning solution.

2. Bringing the wrong sales team.Providers who are serious about winning a deal involve their subject matter experts early and often in the sales process. But in many cases, subject matter experts and delivery leads are excluded from early discussions – this hampers credibility, glosses over critical client issues and forces the provider to play catch-up early in the process. In addition, the team involved in the discussion has to be empowered to make decisions – having to call the mother ship for every approval is a deal-killer.

3. Chasing too many deals – and chasing none of them effectively. Service providers struggle to prioritize viable accounts, and end up chasing too many prospects and spreading themselves too thin. Successful providers understand their true market differentiation and focus on the opportunities that best align with their sweet spot and a client’s specific needs.

4. Poorly prepared responses. Taking an existing proposal and clicking “save as” does not constitute a strategic approach to a sales pursuit. Nor does an epic-length proposal that fails to address the stated requirements. Expecting a client to spend hours poring over sloppy, verbose or generic materials borders on the insulting. Effective responses are concise and clearly written and grab the client’s attention by addressing needs and demonstrating that homework has been done.

5. Ineffective processes around pursuits. Since the members of the “A Team” can’t be cloned, providers have to maximize the contribution of their experts. A bid that involves wasted effort and takes longer than it should to prepare represents a missed opportunity to win more business. Clearly defined processes around pursuit and proposal development allow providers to fully leverage their knowledge and capabilities.