Chapter 2 of 20
Measurements can form a sound basis for tender improvement. They tell you how badly you need to improve. They also tell whether your attempts to improve are working.
First let’s measure how well you’re reducing the number of bids you lose. What percentage do you lose? What was the percentage this time last year? How many were lost causes? How many were too rushed? How many were strategically weak?
Now let’s measure how well you’re reducing the cost of lost bids. What is the cost? Calculated how? One of my clients was spending $600,000 p.a. on lost bids when he called me in.
Try measuring your success at reducing losses on bids into key target areas. What percentage have you lost? Are the key areas based on potential for growth or weak competition or something else? Suppose you increase the number of favoured supplier status contracts you win. What percentage of your bids aim specifically for favoured supplier status? What process do you follow? What percentage does this process win?
Reduce production time
You can measure the person-hours taken to produce each bid. How much is this time reducing? You could aim to reduce it by 50% in 3 months. TQM taught us that quality is easier to achieve the shorter the timeframe. What’s the average number of days you take to produce a bid from start to finish?
Executive time spent on tendering should not always reduce. Most bosses don’t even bother to check important bids though their jobs could depend on winning. So putting a measure on executive hours is revealing. With a better system, the boss who does put in many hours could aim to halve them.
Try putting a measure on the number of concerns your staff have over your present bid procedure. They might find prices hard to obtain. Getting firm delivery dates might often cause grumbles. Staff may dislike the equipment they use to turn out bids. I’ve found problems with copiers, binders, covers, lighting and ventilation. You should measure the risk of losses on contracts you’ve won. How many make a loss? What or who was it due to? Was the loss always worth it in view of future prospects?
Your competitors’ strengths and weaknesses should be measured. What recent research have you done on each key competitor’s product, price, support, delivery and strategy? One firm of insurance brokers gave me sample bids from their two main competitors to scan for ideas.
Here’s an easy one to do with text. Measure the average number of errors in editing and typing in your typical bid. The ‘fog index’ will show whether your text is easy to read or impossible. Are all your statements clear or are some vague? Are you showing that you can perform or just making claims?
Sell with pictures
Count how many infographic pictures are in your average bid. Your entire selling message should be conveyed by clear, gripping pictures, backed by words. One big electronics firm failed to illustrate their main competitive advantage. The customer missed it in the fine-point text.
A vital measure is how often you fail to provide details the customer wants. I checked the fancy bid of a giant roading contractor and found he’d ignored four key questions.
The strategic plan is a vital part of tendering, just as it is with fly-fishing. You check the fish, the conditions, the competition and your reserves. You choose a position, a fly and you cast. So measure the experience of the people on your strategic planning team. One big computer firm cancelled all advertising except for tendering and put the money into better strategic plans.
List the compelling reasons why your business is ideal to provide the product or service that you sell. Then measure how many of these reasons are clearly portrayed in words and graphics in each of your recent bids. For each bid you’ve lodged over the past year, it’s wise to know from an independent source how the recipients rated it for excellence vs competitors’ bids. Measure your score out of 10 against several criteria. How long is spent checking each bid before despatch? What tools help make the checking process thorough and complete?
Measure how many hours of training each member of your tendering team received in the past year. What training modules were used? Did a worthwhile gain result? Excellent tendering comes from excellent practice. If, after training, excellence is not achieved, it will be wise to out-source the required skills.
You need fresh ideas
In these times of rapid change, you need lots of fresh ideas. Check how many innovative ideas your financial people have come up with in the past few months. How many new ideas have come from the writers? How many from the graphics people? Is your strategy team on the ball or going stale? Has anyone on your tendering team NEVER come up with something innovative?
New ideas are just the start. You need to develop them, trial them, measure the results and repeat the process. Every sample tender I’ve ever checked has contained errors and omissions. Yet the people that produced these bids had failed to notice or act on them.
The bottom line on all these measurements is that few organisations bother to make them. Those that do can map out how to forge ahead.
(c) Tecads
Chapter reprinted from Tom’s book, “Winning More Profitable Tenders” – published 2007
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