4th May 2016     Author: Matt Milgrom

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Strategy: Getting to No

getting to noKey Points

  • Bid with less frequency and more quality
  • Match tender strategy with wider sales and capture planning strategies
  • Triage tenders with insightful business questions and a Bid, No-Bid Analysis

It may seem counter-intuitive, but sometimes choosing No-Bid can be best for your business. But how do you get to 'No' when your heart says 'Yes'?

A startling case study

Some years ago, we were approached by a large international recruiter - we'll call them "Acme". The Acme marketing team had a problem: their tender win rate was laughable and had to improve. And, their approach to tender responses was a source of frustration and antagonism for all involved.

Sitting down with the dedicated tendering team, we began to explore their tendering process. We asked: "How do you choose which tenders to go for?". The response floored us: "All of them". 

We pressed the point further: "What about bids that don't make you money? Or tenders covering areas outside of your expertise?". The answer was definitive: Acme needed to have a seat at every tendering table. Acme said "Yes" to every single tender opportunity. 

This scatter-gun approach had a far bigger impact than a low win-rate, however.

Acme's tender responses were careless cut-and-paste jobs, some even retaining the names of other prospects from previous bids. There was little attempt to align with the tender specification, and no tailoring of the offer. Bids won on price alone leaked profit and were full of issues. And the tender team were spread thinly and overworked, leaving them tired and demotivated. 

The impact on the brand was even more worrying: in their pitches to some of the largest companies in the country, Acme projected all the empathy and understanding of a short-sighted corporate narcissist. Their win-rate was starting to look like a triumph.

The solution: tender triage

For Acme, the key to winning more business was to bid for less - at least 50% less. Picking and choosing meant the team could focus their time,  effort and resources on really understanding each opportunity, tailoring a meaningful response to each one. 

To win more business, Acme needed to bid for less

But… which 50% should they choose?

Answering that question involved some serious business introspection. Part of our round of suggestions included the team 'scoring' each potential tender using a series of questions, including some of these:

  • Is there a strategic fit with our business? If your focus is on selling oranges, but the tender is asking mainly for apples, it's unlikely you'll pitch a compelling offer without a strategic joint venture. 

  • Can you be competitive? Tenderers need to have a deep understanding of their competitors (Competitor Analysis) and the buyer (Stakeholder Analysis). If after a detailed, honest analysis (Bid, No-Bid Analysis) your offer isn't compelling and can't be improved - it might be wiser to pass. 

  • Is the tender profitable? Winning might be possible - but is it desirable? Proper financial evaluation of the entire life-cycle of the contract may suggest a no-bid decision, so engaging financial expertise early on is important. Sometimes, of course, winning a tender is a strategic play to remain in the sweet spot when it comes to future business. But that gamble only pays off if that potential is based on solid intel and both the strategic and competitive boxes are ticked. 

The result

Adjusting the focus of Acme's tendering efforts brought a number of benefits:

  • Improved tender responses: With more time and energy to devote to each response, the team now thinks more carefully about the prospects needs, matching them to Acme's key strengths and delivering a more compelling offer - with fewer errors, happily!

  • A happier team: Instead of being lost in deadline-driven copy-and-pasting sessions, the team can plan their approach more carefully. With more bandwidth they are free to innovate and apply creativity to the message  to showcase Acme's brand positively, while avoiding tender response fatigue

  • Improved win rate: With each bid aligned to Acme's core business and focusing on the prospect, many more pitches hit the mark. Any new business won is both profitable and strategic.

Brand impact is considerable, too. Each tendering opportunity is just like a highly targeted advertising campaign. Even if a bid doesn't win the business, your brand's values and capabilities are analysed by important decision-makers; and those individuals might just bring those positive impressions with them when they review one of your future tenders.

Focusing time and energy into creating an empathetic, compelling pitch makes business sense: even if it means you bid less often. 

Bidding for every single tender that comes down the pipe is a flawed strategy. Aside from the sheer volume of work impacting the quality of your submissions, going after unsuitable or unprofitable contracts could actually be the ruin of your organisation. However, when your tender strategy matches your capture / sales strategies, you can be sure that the business you pursue is compatible with your overall direction. 

mattMatt Milgrom is a senior consultant with Tender Success, helping organisations across Australia to improve their win rates.

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Tender Success is a wholly Australian-owned, Australian-based consulting organisation, specialising in tenders, proposals, bids and presentations. Since 1989 our experts have helped Australian Corporations write and win tenders worth more than $20bn. Contact our tender consultants now on 02 8006 BIDS (2437) to find out how to make your next tender a success.