Is your business - Transactional or Relational?

Most businesses break down into one of two camps: transactional or relational. This very much depends on the type of business we are running. It can still have huge implications on the bid process because this might impact the way we approach the process. This all depends upon the approach which is taken to interacting with the customer and conducting business.

What is a Transactional Business?

This is a business which focuses upon individual success and short-term interactions. The key elements of a transactional business model might include:

1. Sales Volume - the primary goal is to increase sales
2. Price Competition - competing on price is popular
3. Brief Interaction - brief conversation about the sale
4. Product Focus - the focus is on the product not the customer
5. Speed Sells - quick transactions = greater profit

Examples which spring to mind include e-commerce (online retail) or more commonly fast-food restaurants, and usually refers to a much cheaper product. The goal is simple: to serve as many people as possible, as quickly as possible. The server might say hi, but that person won't know any details about the customer unless they are a regular (perhaps). This is in contrast to a relational model.

What is a Relational Business?

This is a business which focuses on building long-term relationships with customers. Some key aspects of this model include:

1. Customer Loyalty - strong relationships mean repeat business
2. Bespoke Service - a personalised attending to the specific needs of the customer
3. Trust & Engagement - building trust and engagement through communication yields results
4. Customer Focus - the customer xp is valued over sales figures
5. Added Value - customer relationships which foster loyalty over time create a greater yield

Service based businesses typically operate this type of business model, as do other product based organisations with more of a luxury or higher price point offering.

How do they compare?

The prime difference between them is the approach to customer interactions, as well as the strategic goals related to customer engagement and retention. One is not better than the other but obviously each has different ideals.

What are key components within the proposal process?

If we are involved in a proposal process we know that the quality of both the information and the relationship is of equal importance. This is the major difference we see between these two different styles of business model. Any bid or proposal by its very nature is going after high value and complex work, so we want to focus on these key areas of success, as above.

There is a process. I always explain the role of any Bid Professional as:

• part research
• part writing
• part sales

Realistically each of these elements always play an equal part. If you're missing one element, you have a problem. Too often I see the proposal process being treated as an admin task - from time working in a variety of businesses, as well as my previous stint at consulting a few years back. Experience is a great thing especially when it comes to understanding start-up and scale-up businesses. The learning is always there.

The winning formula is always preparation, strong capture management, working well in-between those proposals so that you understand feedback and are working towards greater resources, a solid bid library, but probably most importantly understanding where those gaps are. Now that knowledge might be gained from your customer support teams, official feedback from previous bids, insight from your sales teams or other in-house knowledge you are able to utilise. This is another reason why strong teams are vital to proposal success, as they say it takes a village.

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