4th May 2016 AUTHOR: Matt Milgrom

Strategy: Getting to No

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'?

KEY 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

To win more business, Acme actually needed to bid for less

A startling case study

Some years ago, we were approached by a large international recruiter and labour hire organisation - 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: "We for go for 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. Frankly, we were amazed that their bids had won ANY business.

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. But… which 50% should they choose?

Answering that question involved some serious business introspection. Our suggestions included the team 'scoring' each potential tender using a series of questions such as:

  • 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 partner. ‚Äč

  • Can you be competitive? Tenderers need to have a deep understanding of both their competitors (Competitor Analysis) and the buyer (Stakeholder Analysis). If after a detailed, honest 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, winning a tender is a strategic play to remain in the sweet spot when it comes to future business. But that gamble pays off only 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. Success is now measured by new business wins that are 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. Contact Tender Success to ensure your next response is a success.