Measuring Bidding as What It Is: Sales

When talking about professional topics publicly, especially when authoring the content, I have a rule: only talk about what you have tried or done. I apply this to my talks, posts, and newsletters.

When the BQ team asked me to share my thoughts on bidding performance management and measuring success, the structure of this article was very clear.

First, I’ll share what I’ve seen as an employee. Then I’ll talk about what I’ve implemented as a freelancer. Finally, I will give you my conclusion (and a tip). You can see this is going to be a lot about me and my experience. The point is for you to take what I’ve learned and (maybe) benefit from it within your particular scenario.

The Employee Story

The first time I worked in a proposals business function was for a large company in the European space industry. How an aerospace engineer ended in proposals is a story for another day.

The role title was Business Development something. Because of the nature of the space business, that job was 80% bid management. Yes – at that company, proposal professionals were sales. Period.

As sales, my boss monitored mainly one metric: money invested in proposals to win a million in revenue. That was it.

And I liked it.

A clear amount that linked our performance to the whole business development function (and its perks, including bonuses). If that metric was under a certain amount, we were OK. If that metric decreased, we were doing great.

Depending on the year, we targeted decreasing it in different ways: bidding more efficiently, for bigger contracts, for better-suited contracts, and so on.

Simple and effective, it had one non-obvious impact: upper management perceived us as an investment, not a cost.

The Freelance Experience

In 2018, I quit that job to think about what to do next. After a while, I didn’t feel like looking for another one so I started freelancing to extend that gap a little bit. That side gig became full-time until the recent proposals AI business took off. Note for context: most of my consulting clients have been small to medium enterprises.

As a freelancer, you must differentiate between two metrics types when analysing performance and success: your consulting operation (maximising income per hour worked which, curiously, is not about charging hourly) and your clients’ operation.

Let’s talk about the latter.

I kept the mindset gained as an employee. I presented proposals as an investment whenever I had the opportunity. I invited my clients to measure money invested per revenue generated.

The same fundamental metric in a slightly different form could be called ‘bidding better’. It helps both sides and reflects improvements, is more efficient and leads to better-suited RFPs.

In a few cases I was called in to support companies with an existing internal bidding function. Those companies, which measured proposals as a cost unlinked to revenue generated, had the worst bidding departments (though the sample of these is small, you should take my experience with a grain of salt).

Conclusion 

I’m convinced proposals are sales. Harder, with nuances, and not what most people understand by ‘sales’ but sales, after all. As such, performance success metrics should be linked to revenue.

This was the case in my team as an employee. It’s what I’ve used as a freelancer. But I’ve learned over the years it is not for every proposal function.

I think many problems start when executives see proposals as a cost.

Many teams fall into the trap of using bidding performance metrics about costs unlinked from revenue generated. For example, the ‘cost per bid’ doesn’t tell you the result of that disbursement. It signals the message that proposals are like administrative support – a business cost that doesn’t directly impact revenue and growth.

The main argument I often hear against this is that many things influencing wins are out of the bidding teams’ control. And that’s true – but it’s as true with any other business functions. No team has total control over wins because we’re selling, not buying. But that doesn’t prevent other teams from claiming wins as theirs and being compensated (sales bonuses being the typical example).

(And a tip)

Not linking bidding performance and success metrics to revenue is comfortable at the beginning. You don’t have the pressure to win. But it’s a trap in the long term – because the function, in the eyes of everyone else, becomes a cost instead of an investment.

And what do all companies on earth do with costs? Cut them.

And what do they do with investments? Pour in resources as soon as the ROI is enough.

Isn’t it clear where bidding should be?