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Tender improvement will raise profit


Planning for tender improvement

Planning for tender improvement needs professional direction.Planning for tender improvement is a key requirement for raising profit that most senior managers should aim for.  But in my view from 35 years in business as an industry advisor you’d be wrong.  Bosses are far more likely to go for an easier life than for more profit.  However, winning more profitable tenders can lead to an easier life for everyone.

There’s always been a strange reluctance on the part of most CEOs to recognise tendering as a process that deserves close continuous scrutiny.  The best brains are put into other things.  Strategic plans are applied at board level, seldom to tenders.  In my experience, the bigger the organisation the more clumsy are their tender bids.

Planning for tender improvement is so poorly understood as a complex process that it is not even mentioned in most books on selling or marketing.  Yet the steps toward securing a profitable market involve issues that should be reflected in every tender document.  These steps include developing a marketable concept; developing technical, financial and logistical outcomes which are highly attractive and competitive; confirming market interest as regards price, performance, timing, quantity and certainty; funding, developing and producing outputs; promotion and selling; installation and support.

The last decade has seen many new concepts arrive and become established to influence tenders:  for example infographics, TQM, ISO, Best Practice, clusters and sustainability.

Tendering is advertising
Some firms spend fortunes spreading fancy messages about in trade journals, trade shows and television while spending almost nothing on their tenders.  But tendering is advertising and the tender is the most important ad of all.  It reveals at once the competence of its source.  It reflects on leadership, teamwork, resources, innovation, reliability, partnerships, customer satisfaction, quality and a host of other issues.  It may reflect well or it may reflect badly.  The aim is to make it reflect exactly the way you want it to.

Just to check we’re on the same wavelength, let’s agree on some priorities which yield measures of success.  How about these?
  • Improving success with contract bids
  • Convincing key target customers to buy from us
  • Developing plans which lead to outstanding results
  • Raising the status of our business
  • Raising customer satisfaction with our business
  • Explaining complex issues to our customers
  • Upgrading our promotion to Best Practice

Another priority could be to win more contracts at a higher price.  To do this you need clear evidence that you’re worth more.  I’ve yet to see a sample tender in which actual value hasn’t been obscured or left out all together. Some measure of excellence has been achieved but lies forgotten or unclear.

The real fun part of tendering is working out three critical paths as described by Edward de Bono.  First there’s the path the customer’s mind is now on.  Then there’s the path you want him or her to see as the best to take.  Third is the path you lay out to guide the decision making the way you want it to go.

Professional model format
To figure out these paths you need to find things out about the customer.  You need compelling words and pictures.  And you need a clever plan.  After that the going gets easy as long as you have a professional model format to adapt for the bid in hand.

Long before you decide to put in a bid you should have set the stage by doing some first class sales promotion with winning tenders in mind.  As tendering is advertising, a priority is to see that whoever does your advertising also plays a key role in your tendering.

Advertising involves research, planning and promotion.  It includes sales presentation kits, display ads, press articles, case study success stories, newsletters, sales letters, leaflets, catalogues, exhibition stands, websites, directory entries and much more.

Key outcomes for advertising are the location of major contract opportunities and the receipt of many enquiries from your target market.  You don’t need rocket science to work out whether your advertising is really working.  You do need outside advice on whether your advertising is Best Practice.

Planning for more success makes good sense.  But plans are only as good as the data they are based on.  They are also only as good as the actions that drive out of them.  So you need lots of ideas.  You need lots of information.  You need a fine plan and you need action.

Your tender bid must persuade that you’ve got the best product or service, and that you’re the best people to supply it.  My advice is to deal with these issues separately.  Given the chance that the buyer may decide to shelve the whole project after all, it’s a good idea to put effort into evidence that he or she needs the deal done NOW.

Add value without cost-cutting
Working out how to add value to your bid is much more fun than working out how to cut prices.  If prices were all that mattered we’d all be driving scooters.

A final point about setting priorities.  Some customers really aren’t worth having.  You need a good way to figure this out.  You may have the common problem of winning plenty, but find the lost bids are very costly and make you mad.  In nearly all cases the reason you missed a bid was available up front but you failed to see it.  So prioritise tendering in your risk management process.

Planning for tender improvement really is a fun journey if you do it right.

(c)  Tecads
Chapter 1 reprinted from Tom Evison’s book, “Winning More Profitable Tenders” – published 2007

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