Competitive tenders can be a lucrative source of revenue, but they are time-consuming, resource-hungry and challenging to win. Because of this, it’s important to realistically rate your chances of success before you commit to responding to a tender.
Tenders are time-consuming and deadline-driven.
Depending on how complex the procurement is, you might get anywhere from 2 weeks to 8 weeks to respond to a tender (the most common response period is 3-4 weeks). This sounds like a generous amount of time, but it isn’t.
Buyers work out the validity period based on how long they think it will take you to put together a tender response. The longer you’re given, the more complex the requirement, and the more time-consuming your bid will be to prepare - and all this needs to happen on top of your day job.
Which brings me to the second problem – tenders are a drain on your resources.
To win, you’ll need contributions from your technical experts; your salespeople who know the customer; your commercial and pricing people; writers; graphics support; and possibly a bid project manager. Can you spare these people, or convince them to sacrifice time from their day job?
Finally, tenders are challenging to win.
We talk about “tenders”, but we forget that the full title is actually “competitive tenders”.
Buyers call for competitive tenders because they want a range of options to choose from. You won’t ever be the only one who is bidding. If you’re lucky you will only be up against a handful of competitors – but it may be hundreds.
On top of this, every competitive tender creates an opportunity cost of things you could be doing elsewhere that might be a better use of your time and effort. Tenders also drain your team’s energy, enthusiasm and effort; and despite what they may tell you, there’s only so much of this to go around.
So how do you make the right choices, and target your energy, enthusiasm and effort where it will give you the best chance of achieving a win?
There are three perspectives to consider when you’re deciding whether to go for a competitive tender: your own, internal perspective; the market perspective; and from the perspective of the opportunity itself.
1. The internal perspective – how well does the opportunity fit you and your business?
Is this a good strategic fit for you? Do you want it? And then there’s bid execution. Can you bid confidently in the timeframe without risking your other customers or business?
2. The external perspective – how well do you fit the opportunity?
Do you know the client? How well positioned are you with them? If you don’t know them, is this a client you want? And then there’s competitors to consider. Can you put up a strong offer against the others who are likely to be bidding?
3. The opportunity perspective
Finally, there’s the opportunity itself. Do you have the capability to deliver what the customer is asking for? Are you experienced in similar work? And then there’s capacity fit. Are you ready? Can you field a strong team, or the right resources, to deliver against expectations?
From chance to choice - making better decisions to bid
If you don’t have one already, it’s a good idea to set up an opportunity assessment checklist in your business that helps you to address all these questions. This will help you decide which opportunities to go for, and which ones you really should take a pass on.
You’ll find just such an Opportunity Assessment checklist in my online program From Chance To Choice, which contains just over an hour’s worth of videos, examples and tools to help you make better decisions to bid. For a limited time, you can access this course for free.