Chapter 11 of 20
Tender strategy is vital to success. It's where we do our best to figure out how to win, given all the circumstances, having decided from a formal evaluation process (Chapter 10) that a bid opportunity is worth attempting,
There are lots of steps in the tender strategy process. I like to see them all set out on paper as a checklist of questions needing answers. In the spirit of TQM, question the questions and improve them over time until your team is happy with them.
As with all management decisionmaking, you should not just be looking for answers but for the right questions. Let’s run through a sample.
First question: how long have we got (a) to complete the strategy process and (b) to prepare the bid document? Next: what is the score from the evaluation process? The higher it is, the more you should invest in the strategy to help you win. Next: who are the people on the buyer’s team who will rank your bid beside others? You need to know their names and functions, ie corporate, financial, technical, etc. You need to have met and talked to as many as possible in relation to this bid. If you don’t really know these people, how are you going to convince them?
Astute buyers always see risks in placing an order with a supplier. There are corporate risks, financial risks, technical risks and staffing risks. If the buyer is a trader, there will also be marketing risks eg whether the outcome will help sales efficiency. The question is: which risks do this group of decisionmakers perceive? Further, does the group rate each risk high, medium or low?
Consider possible uncertainties
There are similar questions to consider about uncertainty. Are the decisionmakers uncertain about your history, your brand, your design, your reliability, your integrity, etc? Perhaps they have other suppliers in mind and are uncertain how to make a choice. They may doubt your ability to train their staff. They may doubt they can afford your excellence. Write a standard checklist of possible uncertainties. Then rate this buyer’s level (high, medium, low) beside each.
Expect to be faced with outright objections from one or more decisionmakers. A typical objection is transfer of loyalty from a past supplier. Another is that your price seems too high. Your offer may omit certain features that others appear to promise. Thus a list of likely objections is part of strategy.
Whether the buyer favours your offer or not depends on his or her evaluation criteria. Some buyers state them with a percentage by each. Most do not. So find out what these people will look for. Best environmental sustainability? Best knowhow? Best after-sales service? Popularity with staff? Lowest cost? If so, how will they calculate it? Make a list of likely evaluation criteria that this buyer will apply.
Strategy should define the boundary conditions within which you are prepared to make your offer. How much are you prepared to cut your profit margin? How quickly are you prepared to complete turnkey delivery? Are you prepared to provide some extras at no charge?
List where your strengths really lie (for this bid) so you can decide whether to expand on them to wow this buyer. Looking at these strengths, which are the (three) main benefits you think your offer will give this buyer?
A further list should define your competitive strengths. Which can you choose to enhance for this bid? From your knowledge of your main competitors, list the (three) main ways your offer should appear to dominate.
Plan to minimise weaknesses
What do you see as weaknesses in what you can offer? For example perhaps your terms of business lack innovation. Perhaps your technology is a bit dated. Perhaps you have no compelling evidence that you can deliver on time. Perhaps you doubt that the key decisionmaker has ever heard of your business. Identify weaknesses to work on now and in the future so as to eliminate them.
The next issue in the strategy process is to decide from your answers to the above questions whether you need more data. How much guesswork was involved? Should you do more research? Who is qualified to do it?
Now for some useful rules to govern the strategy process. Expect excellence. Get the best brains involved. Get them right amongst it. Crack on the pace. Keep inputs up-to-the-minute as things can change so fast. Challenge each opinion and “fact”. Suspect any input that has not been tested. Reject any which is untestable. Insist on dissent. Use a mentor.
An effective strategy process yields two outcomes. First: whether or not you should proceed to make a bid. Second: how to proceed to prepare a bid that wins. Write an action plan.
Check the action plan
Name the person who will lead and others who must act, and the dates to get things done by. Check that all these people have the ability, the experience and the incentive to perform. Check they will have the time: perhaps they are just off on holiday.
Check that people who will have to work together on the bid document and its inputs are happy and eager to perform. Check that they know exactly what to do, and why. Keep a record of your strategy process applied to each bid opportunity. Install a feedback process to test its validity. Make adjustments if outcomes suggest they are needed. Expect your strategy process to reduce your number of lost contracts by a large amount.
(c) Tecads
Chapter reprinted from Tom's book, "Winning More Profitable Tenders" - published 2007.
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