Situation: A company has good deal flow, but the CEO finds that margins are significantly increased with larger deals. Larger deals reduce the overhead component, much of which is the same regardless of deal size. The company is dominant in their market and can provide multi-site and multinational services. How do you create larger deal sizes?

Advice from the CEOs:

• One company with multiple consulting contracts has found that bidding for RFPs on larger projects has opened the door to larger contracts..
• Another company has looked at cost of sales and its contribution to business wins. .
  • Under 6% was ineffective and over 12% did not generate significantly more business. Their target win ratio is 30%
  • Factors that positively influenced win ratios were positioning the company as the preferred bidder up-front, and avoiding sham RFPs which are already slotted in favor of a competitor that helped to spec the RFP:
• When bidding on RFPs, if the company will not be the low bidder it is important to identify the critical non-price parameters where the company will offer a differential advantage.
  • Focus on large multi-site or international RFPs which are more likely to be larger dollar RFPs.
  • Look at supply chain management opportunities.
  • Offer to warrant results in exchange for a higher price.
  • Look at system-type opportunities where the company can offer a more comprehensive solution based on its depth and experience.
  • Look for situations where the company can develop an advantaged position.
• What are the implications of these strategies?
  • It will require retraining the inside sales force to research and qualify RFPs.
  • It will shift the focus to project vs. outsourcing opportunities. The latter are more price and availability driven and don’t play to the company’s strengths.
• Explore channel sales through the existing partner network.
  • Offer a referral fee to regionals for referring opportunities outside their scope. In return, hire them as subs on the project.
• Take a look at the big engineering firms who work multinational contracts, and handle their mitigation matters with small teams.
  • Offer them a comprehensive approach that is less expensive, more consistent, and more visible than their current self-service approach.

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