I addressed the conundrum of the conflict between setting a winning price in your Tender or Proposal, and one that will give you your targeted Profit in my last article,
How do you increase your price to give you your targeted Profit without losing the Tender, a concept some small and medium business people see as impossible?
In my previous article on how to improve your quotations (“How to Improve your Tender – and avoid being caught on your Minacc!”) I looked at how to develop your Minacc, the minimum acceptable price for your offering below which you would walk away from the opportunity. I then looked at how to avoid some of the common mistakes people make in preparing their tender responses, unfortunate mistakes I have seen many times over the last thirty years.
There is one more and unfortunately major mistake that people very frequently make in submitting their bid, and that is emphasising price, and price alone in their quotation.
In this article, I show you how to present your submission so you that turn it into a Sales Tool and move it beyond price as the only consideration.
How to move beyond price
In discussions with a client on problems they were having with winning tenders, they revealed some of the changes they had made to the way they operate, changes which would give a completely different perspective to their bids. Yet these perspective-changing improvements were not mentioned anywhere in their submissions.
It is important to move your tender submission beyond price, to have your potential client consider factors other than price in making their decision. The organisation and presentation of your submission will help.
From a marketing viewpoint, the difficulty with simple quotations is that the information requested is limited to price and delivery.
Talk about a race to the bottom. If all you have given the potential customer is a price and a delivery date then, unless your delivery date is not satisfactory price is the only point of consideration your potential client will have to make a decision. And the lowest price will win.
But what if you could change the way they look at your offer. You can, if you write a properly structured tender. It’s more than just a quotation; it’s a sales letter that leads to a logical step; to place the order with you.
What is going to stop the potential customer buying?
Consider this; customers won’t buy when they have Objections, objections in their mind that suggest Risk. Have you removed any possible objections in the buyer’s mind? Your price alone won’t do that.
If they were in front of you no doubt they would be asking questions of you before they gave you the order. Those questions are in effect ‘barriers to the sale’ in their mind, barriers which increase the Risk to them. And if you can’t answer the questions then it’s likely you won’t make the sale.
If your goal is to get the sale from your tender response, then you must eliminate as much, if not all, of the Risk the potential customer perceives. Someone referred to an unanswered question as a ‘void’; if you haven’t filled the void, they are likely put in their own ‘answer’, an answer which might not be favourable to you.
If you don’t remove the Risk you are reduced to competing on price. On the other hand, if you can remove the Risk, then you are competing on value, and price alone becomes of lesser importance. It never entirely goes away, but other factors enter the equation.
Why is the Tender being called?
The potential customer has a problem they want to be solved. That is why they seek your services. It may be a small problem, but they need to fix or improve something. The more clearly you understand the outcome being sought, the more precisely you respond to their requirement. Understanding that problem comes from the questions you ask before you prepare your submission.
So the first thing they need to see in your tender response is that you understand their problem. The way you do that is you restate the problem. Let’s be clear; the problem is not what they are buying; it is why they want the product or service.
Then you offer the solution
“Blogg Technology have been meeting the needs of a large range of industries and organisations including blah, blah, blah since __________.
To meet your requirement we propose…… ”, or some such comment. Then provide the detail of your solution.
Why should they choose your offering?
Now you have to tell them why your proposal will deliver the result, and what makes it different. What you have to show them here is a list of benefits that your solution provides. Note the difference between features (something your product or service has) and benefits (what that feature provides). It is the accumulation of benefits that solves their problem.
Every feature will have a benefit. Listing the benefits as a series of dot points makes them easier to review and understand.
How do they know you can do what you say you can do?
You need to prove your credibility.
- The best way to demonstrate that is through practical examples, where have you provided similar product or services? So demonstrate relevant past experience in this area, giving sufficient detail to make the example credible, without giving away any commercial details.
- Then back that by listing some referees they can talk to, having first got their permission of course. The very fact you have referees adds veracity.
- Thirdly add testimonials. Testimonials do make a difference. We tend to think they are “not quite right”, a bit “salesy”, but people who are professional writers of sales material have tested this repeatedly. The reason you keep seeing testimonials in ads is they work. They work in tender submissions as well. Testimonials offer further “proof”, thus further reducing the Risk in the potential customer’s mind.
What will happen if you don’t get the job right?
At the moment, if you don’t get it right, the Risk is with the customer. The Risk is in the results, because that is what the customer is seeking, a result, his problem solved or need met. So:
- Identify the underlying Risk in the customer’s mind, and
- Reduce or remove the Risk
Transfer the Risk to you. It’s called “Risk Reversal”. If you can take away the Risk in the customer’s mind, you take away the pressure on him. If you won’t take the Risk, why should the customer take it?
So you offer a guarantee. It doesn’t have to be a money-back guarantee. Yes, someone might take you up on it, but you’ll also get a lot more sales than you would otherwise.
If you offer a money-back guarantee, give it a period like 3 or 6 months. Now here is the interesting thing. It might sound counter-intuitive, but the longer the period of your guarantee, the less likely it is to be called up.
Of course, there needs to be a condition – they have to have maintained the product/service in accordance with the instructions, or not interfered with the product/service in any way. But you’re not looking for a way out; you’re looking for trust.
Price – now is the time to put this down
Be specific about what the price covers, and don’t forget to give the price a validity period. After all, the cost of the product/service to you could vary if there is too big a delay in the order being placed. “This quote is valid for 30 days from the date of this submission.” Even if your reponse is a straight sales letter rather than a tender submission, there should be a time limit to create urgency.
When are you going to deliver?
People need to know when they are going to get delivery. If they don’t they’re going to be uncomfortable.
Be specific about when the customer will get delivery, specifics make people feel more comfortable. That is what the request for quotation is about – the result. Failure to quote a delivery date raises a question in the agency’s mind again, just when you have got rid of all the objections.
If there are stages to the delivery, quote the stages. That helps their understanding, and clear understanding promotes trust.
Do you see the structure?
The whole tender submission is a step-by-step process to build trust and remove all the doubts in the potential customer’s mind, leading to the point where the only logical step is to place their order with you?
And don’t worry about the length of the submission. Worry about answering all possible questions in their mind, the barriers to a sale.
Obviously, the larger the quotation, the more possible objections there may be and the more detail that might be required. However, even for a small quotation, a brief but systematic response following this model would assist in taking the focus off price alone.
A successful quotation is much more than a product and a price.
There is one more issue – Presentation
An excellent presentation will make you look so much more professional, and help the buyer feel more comfortable about dealing with you. If the way your industry does things is a simple “price, quality, delivery” quotation here is your chance to make yourself different, and stand out.
Simple things like the use of a standard font, short paragraphs of no more than 3-4 sentences, short sentences averaging 14 words, and dot points making it easy to scan can make a big difference.
You can improve your quotation or tender by turning it into a sales tool to be used for your advantage, improving both your chances and your profitability.
Good luck only happens to those that get in front of it.
So spend a little more time on preparing your next Tender, proposal or quotation.
If you have a potential tender coming up and would like to explore this problem further, contact me at This email address is being protected from spambots. You need JavaScript enabled to view it., and we’ll set up a time for a chat.
