There is a rising trend in the market research field that is raising concern among full-service market research and polling companies. Specifically, prospective clients are reaching out more and more for bids on projects.
Initially this may seem like a good thing, and possibly an indicator that the economy is picking up. Sadly, this is not the case at all.
More and more firms are reporting losing bids, and the most common reason offered: “we decided to work with a company that is already familiar with us, and/or, that we have worked with before.”
After attending an industry event recently, in an impromptu gathering afterward of the heads of well-known MR firms, the reaction to this situation was simple; they never intended to use anyone else, they just wanted to drive down the rates of the incumbent.
As for solutions, a number of things were discussed that ranged from charging for proposals to some sort of collective ratemaking. As for the latter, yes, there could be antitrust issues.
Is driving down the rates of an incumbent vendor something new? Absolutely not. Due to the current economic disaster though, more and more customers are being forced to get 3 to 5 bids to satisfy “C” level management, even if this means giving the incumbent a heads-up and “last look” so that they ultimately do retain the business.
This is a hot topic among captains of the market research field, and I expect that we will be seeing some major changes over the next few months.
Considering it typically takes anywhere from 20-30 man-hours to assemble a proposal, what do you think of charging to offer a proposal, with the caveat that if accepted, the proposal cost will be deducted from the actual project?
