Four Bid Metrics That Should Matter to your Tendering Team

In order to manage anything, you have to identify the key drivers, define them and commit to measuring them. This concept applies equally to tendering. In fact, we think it’s so important that it’s the very first module we teach in our Bid Accelerator program.

So when it comes to submitting tender responses, business proposals and grant applications, how well do you know your numbers?

The business of bidding

It’s easy to overlook tendering as an administrative or tactical task. In contrast, strategic sellers take a long-term view of their bidding processes, using well-established metrics to guide current tendering performance and future tendering objectives.

The good news is that there are only four key bid metrics needed to calculate your bidding numbers. With these metrics you can gain insights on where and how to improve your bidding investment:

Annual bidding revenue – the total revenue you want to win through your tendering activity, on an annual basis.
Proposal win rate – the percentage of tendered business you actually win (be honest). This is a measure of your bidding effectiveness.
Average contract value – of the opportunities you pursue. Do you aim to win your revenue target with just one large bid, or multiple smaller bids?
Bid investment ratio – the investment you make into winning tenders, expressed as a percentage of the overall contract value. This varies by industry but is generally in the 0.5 – 3.0% range. For example, if you’re bidding on something worth $1 million, then you should be investing between $5,000 to $30,000 to win that bid. This is a measure of your bidding efficiency.

Use your numbers wisely

Once you have these four metrics, you can calculate the value and volume of opportunities you need to pursue on an annual basis and the indicative bidding budget required to support your tendering activity. We’ll cover those calculations in our next blog and also explain how they can help you make more informed decisions about your overall tendering program.

But if you’d like to delve a bit deeper right now, check out our free webinar recording where Mark Riley and Nigel Dennis provide a sneak peek into Module 1 of our Bid Accelerator program, explaining how to apply these key bid metrics to drive your bidding ROI.

Share:

St Vincent De Paul – Vinnies second-hand store front

Bid Accelerator – delivering commercial revenue wins for worthy causes

Case Study: How the Bid Accelerator tender training program helped the St Vincent de Paul Society Canberra/Goulburn submit an 800-page tender submission, which successfully secured a multi-year commercial contract valued at over $10million.

Illustration of a man considering a career as a bid writer. He is looking at various icons that represent the unique aspects of bid writing e.g. hourglass, pencil, paper and puzzle pieces.

Why is bid writing such a unique career choice?

Bid writing is a profession that’s vital to winning and retaining business. But a unique, specialised skill set is critical in this important role. In this blog, we dive into its key differences and how you can become a bid writer yourself.

government funded participants complete Bid Accelerator training

Improving tendering outcomes for Australian regional and Indigenous businesses

CASE STUDY: Read how two exclusive intakes of our Bid Accelerator program (funded by the Australian Federal Government) helped a number of regional and Indigenous owned Australian businesses improve their tendering capability.

A calculator and pen with money (Australian dollars) on a table - representing calculated tendering investments.

Using Bid Metrics to make Calculated Tendering Investments

Having defined the four key bid metrics in our previous blog, now we explain how using them to calculate tendering targets can improve the efficiency and effectiveness of your bidding investment in this blog – the second of two parts.

BidWrite acknowledges Traditional Owners of Country throughout Australia and recognises the continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures; and to Elders past and present.