Do tenders form an important or perhaps a major part of your workload?
If so, do you measure the number of tenders and quotations you submit, and the proportion that you win. Both figures are important Key Performance Indicators (KPIs) of your future cash flow.
Changes in the number of tenders or quotes you have the opportunity to submit may indicate changes in your market place. If they start to trend down – why, what is happening out there? Have you earned some black marks, or is the market turning down?
Do you target to win a certain percentage of tenders and quotes you submit – 10%, 20%, 33%, 50%? What proportion do you actually win and what is the trend? If you are not winning “your share” is it because the competition is getting stronger, or are you doing something not quite right.
What ever the reason, improving your tendering can significantly improve your business results.
There is money in tenders. The NSW Government alone spends $12.7 billion annually procuring goods and services. At the other end of the scale the NT Government is the major buyer in the Northern Territory, procuring over $800 million in goods and services each year. NT Research in 2006 found that whilst the tender process for goods and services under $50,000 represented just 2% of the total value of tenders awarded, they comprised 47% of the total volume of tenders.
The decision was therefore made by the NT Government to increase the tender threshold from $10,000 to $50,000. That is, procurement under $50,000 would become subject to the Request for Quotation (RFQ) process rather than the RFT process. RFQs are simpler to administer and the requirements less formal.
Tender writing can seem an unenjoyable, difficult and resource-consuming task
How do you respond to all the requirements? How do you answer the criteria? How do you layout and format the response? How do you clearly show, on paper, why you should win the tender? And how do you do all this on top of your other workload?
Just to avoid rejection in the first cut, a tender must be compliant and answer every single requirement. To go on to win, it must also be competitive and persuasive - it must show, clearly and persuasively, your difference, why you rather than the competition should get the contract. And the margin between winning and losing is very often only a few points.
Successful tendering therefore demands an unusual combination of:
- Knowledge of your business, industry and services – you should have this
- Sales & Marketing skills – smaller businesses tend to lack these
- Rigorous analysis – do you do this or do you just jump in?
- Attention to detail – many skip the details because they are ‘too hard’, or they just don’t see them.
- Experience in the tendering/proposal process – Catch 22
- Sales writing skills – again – smaller businesses tend to lack these
Successful tender writing isn’t simply about answering the questions, providing a technical description and putting in a price. Success comes from understanding the tendering process, careful preparation, differentiating yourself from the competition, and putting in a professional sales document. This may involve:
- Writing or pulling together the tender or proposal
- Developing company profiles and other supporting documentation
- Establishing procedures, templates etc to assist future tender preparation
- Improving your tendering processes and materials, for future success
- Bringing an outside or strategic view, identifying the key factors required to win, and strengthening the projection of your differentiation and competitive strengths in the bid
- Developing processes to identify and pursue key tendering opportunities, including those not advertised.
PLEASE – not ME-ME-ME!
You need to avoid a situation whereby the final proposal is bidder-centric. In other words, you have placed your solution at the heart of the bid. From the client’s perspective, these bids tend to come across as ME-ME-ME.
A more successful approach is to place the client ‘smack dab in the middle’ of your response. Everything has to revolve around their needs, which, of course, is the way it should be.
Client-centric proposals make the client feel that the tender is written for them in person; not written down at them.
Successful proposals place the emphasis on the client’s needs rather than on your abilities, technology, or experience, regardless of their technical merit.
Novice proposal writers tend to hype their own products/services and relegate the client’s needs to second place.