Anyone who’s had a contract up for renewal, especially of the 80/20 variety, knows the fear of losing it (80% of your revenue from 20% of your contracts).
In Would You Rather be Barbarian or Duck? I listed the positives and negatives of being the incumbent or challenger. So, if you’re the incumbent, when is the right time to work on renewing the contract?
There are two answers.
1) You’re either working to avoid your contract’s rebid, or 2) preparing to rebid. If you’re not doing either, your duck is firmly squatting. Who knows what will happen to the contract?
Working to Avoid Contract Rebid
In a few instances you can avoid a rebid if you start working on it from day one. You’ll need to execute a plan flawlessly, but it can be done.
However, many bids can’t avoid a rebid for regulatory or policy reasons.
In this case, the best strategy is to execute a plan flawlessly to avoid a rebid – knowing it will be rebid. Sounds funny, doesn’t it?
If you do that work, you’ll create a high wall around your incumbent position. You’ll have:
- Produced an outstanding track record of quantifiable results
- Created great relationships deep into the customers’ firm
- Communicated your value effectively & often
And start working on this the first day of service and every day thereafter. This will put you so far ahead of your competition, they’ll feel the bid was just an exercise.
Preparing for the Contract Rebid
This is the boat most of us find ourselves in about 60 to 90 days before a renewal date. We’ve heard unofficially an RFP is going out. And we want to up our chances of winning.
Now’s the time to start working on the rebid. This doesn’t mean wait around for the RFP.
While you’re still under contract and the RFP hasn’t come out, there are things you can do. And things you shouldn’t do. Here are some examples:
Price Reductions or Incentives
Too late for this now. It’s an obvious attempt to buy the contract. And they’ve already made up their mind they’re going out to bid. UNLESS asked by the customer, and in return you can ask for a contract extension to avoid the rebid.
Introduce a Service Improvement
If you normally introduce improvements, then continue. If you don’t have a history of them, think about how this will look. If there’s any hint it’s an attempt to kiss up at the last minute, skip it.
Gathering Pre-RFP Info
You should definitely be doing this. It’s your greatest advantage as the incumbent. Whatever info you seek, make sure it’s done low key and in the same manner, preferably by your same personnel, who have done it in the past.
DON’T do anything that MIGHT appear to be stealing info, sneaky or disreputable. It’s all about perception. Not yours. Your customers. You can always ask your customer contacts directly.
What to find out? Things you should have been seeking all along.
- How’s the overall business doing – up, down, flat, which direction?
- How does the contract service impact the overall business?
- What strategic initiatives are starting, or stopping?
- Who are the decision makers? Their roles & influences?
- What business changes will affect customer contact’s department?
- Who’s on the rise or fall, within the business?
Begin Your Analysis
60 to 90 days before the RFP comes out, start your proposal development.
Get your team together and analyze the customer’s business, contracted service, decision makers, and service’s impact on the overall business. This is your best, last chance preparing for retaining the contract. Take advantage.
Which of your Large Contracts is out to bid in the next 60-90 days?
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