Target rates are one of the most common forms of feedback and are used to give bidders an indication of what the buyer perceives as a competitive bid. Choosing the right target can be quite tricky. If a target is overly aggressive, bidders may be deterred from improving their rates i.e. why improve my bid when I am already so far off the target. Similarly, if a target is too lenient, the more competitive bidders may have little incentive to offer further improvements. The buyer should therefore be mindful of their award strategy when setting targets. If the low cost offering is a credible award candidate, setting targets that outperform the low cost bid may allow for the realization of additional savings. If the low cost offering is not a credible award candidate, targets should be set at a level that would improve activity in the bidders further down the rankings. Other common conventions include the use of historic or benchmark rates as the basis for setting a target i.e. 5% less than last year's rate.
When a buyer decides to use target rate feedback, they will have two options available to them. The first option involves displaying the target as a standalone column in the bid sheet. This approach allows a bidder to see the exact difference to target which may or may not be desirable. When a buyer wishes to obscure the exact difference to target and instead give a broader indication of performance, they will enable traffic light feedback based on proximity to target. Here the feedback observed by the bidder will depend on different proximity ranges i.e. 0-10% for Green, 10-15% for Yellow and +15% for Red. By obscuring the exact difference to target, risk averse bidders still have incentive to offer further improvements i.e. I see Green but does that mean I'm at the target or 10% off. This article aims to show users how to configure both types of target driven feedback
How to add Targets to the Bid Sheet
Adding targets into your bid sheet can easily be achieved carrying out the following steps:
Add a target column in the bid sheet design and add the target rates for each lot into this column.This can be achieved by using the online bid sheet design feature, or by downloading the bid sheet design offline, adding a target column and values offline, and then simply upload the bid sheet design with this added column.
|A target column has to be set as a 'mandatory' input. Each lot must have a target in order for this column to be used as a target column.|
Once users have included this column in their bid sheet design, it will need to be mapped as a feedback column. This can be achieved by clicking the ‘Roles” tab in the top right hand corner of the 'Columns' tab (Design > Bid Sheet > Columns) and then clicking the ‘Feedback Target’ button (Figure 1).
This will present you with an option to map the feedback target to a column in the bid sheet. In this instance, the ‘Target’ column that was previously included in the bid sheet design would be selected (Figure 2).
How to set Traffic Light Feedback based on Target Values
To enable traffic light feedback using the target column, navigate to the ‘Event Settings’ page in the 'Overview" tab, and scroll down to the traffic light feedback option and turn this on. There are two option to use the target column with the traffic light feedback (Figure 3 below):
- Calculate feedback based on proximity to target: This option displays the traffic light colors based on how to close the bidder are to the target for that lot. Users can set a percentage threshold for each traffic light color e.g. Setting a green light at 3% indicates that any bids up to and including 3% of the target will receive a green light for that lot.
- Calculate feedback on rank once target is met: This option displays traffic light feedback to bidders who have met the target for each lot. Once the target is met, the traffic light will display colors according to the rank set e.g. Bids that are in the top 3 ranked bids will receive a green traffic light.