Bids and Request for Proposals (RFPs) constitute a significant part of revenue for B2B distributors. However, many distributors still rely on outdated methods to service these bid requests. Their methods are manual and lack data driven intelligence and market intelligence, resulting in symptoms such as slow turnaround and low bid conversion. This clearly impacts both topline and bottom line business performance.
Industry trends like consolidation, increased competition and changing buyer expectations are driving the need for distributors to overhaul their current approaches and adopt fresh techniques rooted in technology.
Here are five step B2B distributors need to take to improve bid performance:
1. Standardize, digitize the bid input process
Many distributors serve their customers through various channels such as call centers, account representatives, and online. With these multiple channels and past acquisitions come a myriad of bid receipt formats. Standardizing the bid receipt process and automating it via investments in optical character recognition (OCR), online forms, apps, etc., will go a long way toward improving performance.
2. Deploy machine-learning algorithms to improve product matching
Accurate product matching is a vital and often time-consuming step in the bidding process. The current approach at many distributors involves throwing pricing analysts at the problem and/or applying rules wherever possible. Effective use of machine-learning algorithms can help create comprehensive cross-referenced databases to aid product matching. Deploying such algorithms will also help support the seasonal volatility of bids without having to deal with staffing for such volatility. Leading distributors are beginning to deploy matching-learning algorithms to identify exact, similar and alternate products to drive more relevant and competitive bids.
3. Incorporate competitive price intelligence
A significant change in the B2B distributor landscape is the rise of price transparency. The new buyer behavior of beginning product search online has prompted several distributors to migrate their catalogs online. And as the catalogs go online, so too go the prices, making them more easily discoverable. B2B pricing is complicated, since it varies based on client needs and order size, so obtaining competitive proxies can help support a pricing decision. Distributors need to start collecting and incorporating competitive pricing intelligence as a part of their bid workflows.
4. Simplify and incorporate price optimization algorithms
Arriving at a bid price is, for many distributors, complicated. Prices witness a lot of iteration internally within the sales and pricing teams, and then between the sales teams and their clients. Many-a-time the discounts can’t be justified and sales teams struggle through static, black boxes that give prices without providing options to simulate price based on different client scenarios. There is a need to simplify and incorporate price optimization algorithms so that the needs of the distributor and the clients are met. Sales teams can be more responsive if they undertake simulations on their own, and pricing teams are assured that there is governance to the pricing methods.
5. Invest in deployment and continuous improvement
Last but not least, these steps won’t deliver value if they are not deployed properly. Distributors need to invest in effective change management, training, and deployment to truly harness the value. And it does not stop at that. They will also need to invest in continuous improvement to make sure their bidding systems are supporting business needs.
By applying these steps, distributors have seen noticeable improvements in bid turnaround time (from days to hours), in bid conversion (by up to 3%), bottom line performance via alternate matches, and freed-up time for more value-added activities.