No doubt you have been in this situation at some stage in your business life. You may want to break into a new market, or expand your foothold in an existing market, or, heaven forbid, you desparately need more orders for your business.
So you look at that great pot of gold of government business - money, income, revenue. Government procure largely through tenders. And they are big spenders. For example in 2010 – 2011 the Australian Government let 79, 286 contracts value at $32.64 billion.
The NSW Government is understood to spend about $12.7bn on goods and services each year. During 2011 the NSW Government awarded 70% of contracts to SMEs (entities with 200 or fewer employees). The remaining 30% of these contracts were awarded to non-SMEs (ie: large entities with 200+ employees).
The NT Government is the major buyer in the Northern Territory, procuring over $800 million each year.
The largest single source of contracts in each jurisdiction is the Federal, state or territory government.
It is not just government that procure through tenders. Businesses do also. The larger the business the more formal will be its procurement processes. There are some differences of course. The bigger the government decision, the more likely it is to drag. The private sector is less averse to risk and typically makes their decision in a much shorter timeframe.
But the more formal the private sector’s procurement processes, the more likely the same mistakes are likely to creep into respondent’s submissions.
Writing tenders and proposals bedevils so many people. It requires a different type of skill than the one they trained in, yet it can be so important to growing their business.
Many think the only way to win a tender or quotation is to lower their price; but doing so destroys their margin.
Price is always important, but there are many other factors in writing a successful tender, proposal or quotation.
So learning how to avoid the tendering pitfalls will make a significant difference to your business. More on that below.
I remember my moment of epiphany about government tendering. It came about because I was tired of businesses complaining about the problems of tendering to governments:
It’s too complex, it’s too bureaucratic, it takes too long, it’s biased, repetitive, small businesses can’t win, big business has an unfair advantage, the requirements aren’t always clear, it’s too demanding, it’s too costly, it’s confusing – on and on and on.
You’ve no doubt heard them all as well, if not experienced them. It doesn’t take much research to find such complaints are common not just to Australian federal, state and territory governments but also to overseas jurisdictions.
The killer requirement is “COMPLIANCE”. So often, when responding to a request for quotation or tender, the detail the customer is asking for becomes a bureaucratic burden, particularly when the customer is a government agency. So much unnecessary detail. The questions just seem to go on and on, requesting seemingly unnecessary and irrelevant information, or asking for the same information in different areas.
It all becomes a pain in the you know whatsit! It is tempting, and many fall for this temptation, to rush through the information requested, providing the minimum requested to comply, and get to the perceived real requirement, which of course is the price.
And as a result, because they feel they have to comply, and it’s a burden, their rushed response is likely to be a poor response. Of course, poor responses don’t help your case. They don’t make a persuasive response.
There is another way of looking at this, a way that may help your chances of winning considerably, a different way of looking at the same coin.
Take a step back from the quotation or tender and consider how you might handle a normal commercial enquiry. What is stopping potential customers from buying from you in a non-tender situation? Customers won’t buy when they have possible objections in their mind, or when they feel there may be some risk in the deal. You need to overcome the objections, demonstrate value, take away the risk and give them good reasons to choose you.
So what could some of those objections be?
On the other hand they will probably feel some comfort if the product or service you provide has worked for others. So you tell them:
The customer doesn’t want to look a fool if something goes wrong. So where are the risks? You tell them:
In a world of choice, why should the customer choose you? So you reel of:
One way or another, you probably go through this process of reassuring the customer to make the sale. It may be verbally, giving the prospective customer examples of the work you have done, the successes you have had, the customers who will give you a reference. Or you may have a company profile which includes this sort of information.
Whichever way, you seek to make your potential customer as comfortable as possible in dealing with you. A decision in your favour becomes a comfortable and logical next step.
Now go back andlook at that bureaucratic burden you have been dealing with. In most cases all that bureaucratic detail you have been cursing is doing much the same thing. It is aimed at removing objections, reducing risk and giving the customer reasons to feel comfortable with you.
It’s the change in attitude makes it simpler than you think to submit a compelling response. See that tender response as a SALES TOOL for you, and not a bureaucratic burden! Turning that pain in the whatsit into a sales tool for you will not only give you a completely different perspective, it will also considerably improve your success rate.
Would it surprise you that I’m working on a new online course to help people win more tenders? My course will help you learn how to submit well presented, persuasive responses so that you win more tenders, without stress or feeling under pressure.
You will discover responding to tenders is no longer a complex, unclear burden, nor costly and demanding. You will learn how to prepare for, analyse and persuasively respond to tender requirements. Winning more tenders will take the stress out of your life.
The course will be around 8 weeks, with a new module each week delivered on-line, followed by a face-to-face webinar towards the end of each week to discuss participants’ questions and learnings from each module. Participants will build their skills step by step, reinforcing their learning.
We’ll be doing practical exercises based on your real-life experience with tender responses, identifying and working on the opportunities for improvement. Activities will be based on a Case Study. Where possible, participants will be asked to utilise an unsuccessful tender they have submitted. For those who have not yet submitted a tender, I will supply a real RFT, with some appropriate alterations.
© Copyright 2017 Adam Gordon, The Profits Leak Detective
Some profit losses are pretty obvious - so you fix them.
BUT, what if you don't know profits are leaking, cash out the door?
Possible leaks could be anywhere.
Are there some clues or symptoms that are tell-tales?