Strategy: Tender Loving Care - It's All About Relationships
Many factors determine your success or failure when preparing a tender response. As with courtship and marriage, there are no 'magic' formulas. But ignoring the importance of a trusted existing relationship may spell disaster.
- If you don't have a strong relationship with the potential client, don't tender (Unless your offering is unique to the market)
- As the incumbent, don't assume your current relationship is OK; value the relationship as you would a new client
- When tendering as an incumbent treat the opportunity as a new one and assume nothing!
- Remember the cost of business acquisition and do all in your power to win your current clients on a daily basis
The Secret of Success?
We're often asked: 'Will the engagement of a Tender Consultant ensure a successful tender or proposal?' Our standard maxim applies, of course: "better to have a good solution in a superior proposal than a superior solution in a mediocre proposal". However, whether you engage an expert or not, success or failure actually depends on a confluence of doing all the right things, most of the time. And, perhaps the most important thing to get right is the relationship with the prospect.
Sadly, however, tenderers are often so much in love with their own offering - their service or product - that they neglect the most important aspect of the process: their relationship with their client or prospective client.
Remember: 'people buy people'. If two salespeople from competing suppliers offer you identical products, you'll probably buy from the person you like the most. And so will your client.
A tenderer faces one of two challenges when tendering for new business:
- 1. Creating a new relationship (prospecting): the goal of a sales/capture strategy, or
- 2. Assessing the health of an existing client relationship, honestly.
A future article will cover the importance of responding to the first challenge intelligently. The second is vividly illustrated in the following case study.
Never Take Relationships for Granted: A Case Study
A well-known Australian public company was the incumbent supplier of products and services to a national institution. The contract was worth around $350 million per year, for five years, and was approaching renewal. Without question, this was a big deal - financially and strategically.
Behind the scenes, however, all was not well. The team servicing the account was aware that the client wasn't entirely happy with the service provided. However, nothing was done to candidly examine the relationship to find out how to improve matters. Instead, the account team reassured top management that all was well: "Relationships on the ground are solid. The effort to change providers will be prohibitive for them. We're a 'shoo-in' for our 3rd, 5-year contract!"
Misplaced self-confidence of this kind isn't uncommon. Even, ironically, when it comes to billion-dollar contracts. But in this case, complacency would be expensive: the "shoo-in" client had, in fact, decided to test the market - on the quiet. Background investigation revealed that a selective tender document had been prepared and shared with a number of competitors.
The source of this information? Interestingly, a trusted relationship - there goes that word again - between an employee of the client and a colleague within one of the competitors.
Remember: this business was worth $1.75 billion over five years! What would a company be prepared to invest for the prospect of winning such a significant piece of business?
The situation was urgent, so our advice was simple: call in the big guns. The discovery of this selective tender had to be addressed with the client at the highest level possible, CEO to CEO. Oddly enough, at the initial meeting the client's CEO fessed up immediately, apologised and told my client not to worry, its 'tender response' had been implied.
However, this situation called for a very different approach to the 'more of the same' suggested by the current service offering. Drastic measures were needed:
1. The current relationship had to be thoroughly and honestly explored and the issues addressed immediately
2. This tender opportunity had to be treated as if it were pitched at a completely new client
3. A Project Manager was to be appointed to demonstrate commitment to the relationship and to set the tone for the future contract, if successful.
Cutting a long story short, the incumbent's account team was upgraded, led by a new, more senior Relationship Manager. The key issues worrying the client were addressed at the highest level. And, finally, the client started to receive a level of service they had never previously enjoyed, with the promise of it continuing for another five years. Happily, victory was snatched from the jaws of defeat when a new contract was written.
The solution wasn't a slick presentation or an impressive set of documents. It was a good relationship based on understanding.
A superior proposal or tender with a superior offering will impress. But it will be unsuccessful if the relationship isn't robust. "People buy people". No proposal or tender expert can be expected to help a company win business when the sales or capture strategy has not been successfully implemented. And in reality, future business is won every single day by ensuring that the existing relationship with your client is a happy one.
Rob Machin is a senior consultant for Tender Success. For more than 25 years he has successfully managed tender responses for multi-billion dollar bids in Australia. Contact Rob to improve your tender loving care.