Dear Procurement: all I want for Christmas is…

Last December I ran this letter in the Winning Pitch, and it had the highest open rates of all my newsletters in 2012. So if you missed my Christmas letter to Procurement it, here it is again, with a few amendments to bring it up to date for 2013. Unfortunately, the bad news is that not much has changed in the buyer/supplier relationship in the past twelve months. The good news is that there is still room for improvement!

Here's hoping that the New Year brings more balance for all of us in the tendering system. No matter what side of the fence you sit on, I wish you a Merry Christmas and a happy New Year :-)

Dear buyers,

You need stuff done; we know how to do things.  We need each other, and we really want to work with you to do great things together.

Unfortunately, the tendering system is turning us into adversaries, not collaborators. Like us, you are probably drowning under a pile of forms and schedules, and you must be wondering if there is a better way to make buying decisions.  We think there is.  Here is how, with only a few small adjustments, we can change this system for the better.

• Let us talk to you again. A tender isn't the only way to scope the market and for complex purchases, it really isn't the best option. So let’s have a chat. Things change quickly and you might be surprised about what we can do for you now that you haven't yet heard about. And, while we’re on the subject…
• Bring back Expressions of Interest.  If you want to assess potential suppliers on paper, why not use an EOI, rather than an RFT? These are short and reasonably straightforward for us to complete. They make us feel like we’re in with chance, and not like we are jumping over a very high hurdle for a very small likelihood of return.
• Say what you mean. Years have passed since the introduction of competitive tendering, but the tenders themselves haven't changed very much in all that time. They are often hard to interpret, and the evaluation criteria don’t always match the questions. With better instructions, any supplier with a bit of common sense will be able to bid confidently. That’s good for you, and it’s good for us.
• Timetable a response period that’s reasonable. We run a pretty tight ship these days; our staff are stretched and it can be difficult to keep up with complex RFT requirements and shrinking deadlines. Crunching us for time because you’re late to market only means you get rushed, poor quality submissions. On the other hand…
• Don’t issue a timetable and then grant a last-minute extension just before the deadline. This unfairly disadvantages (and discourages) the suppliers that are prepared, and have made it a priority to respond to your RFT.
• Please, answer our questions when we ask them. We think very hard before we submit questions about an RFT, because we don’t want to waste your time. But often, we don’t get meaningful answers (or sometimes, any answers). Better information will mean better proposals for you to evaluate.  And finally…
• Have a heart - don’t drop a tender on 21 December.  We know you like to come back to a full inbox, but we would like to see our families too.

There's no doubt the tendering system could work better, and together, we have the power to make it happen. 

You know, at the end of the day, we are all just people. We all put our pants on one leg at a time. So come meet some of us; we bet you will like what you see and hear.

With hope and best wishes for a Happy New Year, Your Prospective Suppliers

Why Exam Swots Make Good Bid Writers

It's been a long time since I was last at school, but in some ways it feels like I never left because my job involves developing bids and responding to tenders. Answering RFT questions often feels like you are sitting an exam every day of your life.

I'm often asked about the skills that are most needed in a bid writer, and how to identify aptitude in internal staff who might be good at that kind of work. Probably the most important is an ability to understand what's being asked for in the RFT, and to respond accordingly. Therefore, a good predictor of likely success in such a role is how good someone is (or has been) at exams, particularly in subjects requiring a complex written response.

Getting good exam marks requires the confidence to understand and interpret and unfamiliar questions very quickly and under time pressure; to plan a response that addresses that question; to identify relevant content and ignore stuff that isn’t relevant; and to weave an argument or point of view throughout. Therefore, a member of staff who has a good academic record with high exam scores in complex subjects is highly likely to be suited to the task of responding to tenders. It doesn't really matter what kind of subjects they were good at – it’s their pre-existing aptitude for this kind of work that is important.

I’ve just finished re-reading the Number One Ladies’ Detective Agency series by Alexander McCall Smith. In it, there is a character called Mma Makutsi, who is famous for having achieved 97% in her final exams at the Botswana Secretarial College. Mma Makutsi is the Assistant Detective to Chief Detective Mma Ramotswe, and together they are a force to be reckoned with. Mma Ramotswe has fantastic intuition, where Mma Makutsi is the person who dots the is and crosses the ts. I am willing to bet that if they weren’t in the detecting game, they would make a great bid team.

Likewise, in your business there is an important role for staff members that aren’t academic and don’t think of themselves as “writers”.These people are often great students of life, are good at reading between the lines and have useful insights customer behaviour. Therefore they make great proposal strategists who are good at seeing the big picture.

You need these big-picture proposal strategists, together with great bid writers who are good at the detail, to form the core of a successful bid team.

Proposal positioning tip: how to retain important contracts

In contract retention projects, the stakes are very high.  Often there are millions of dollars and many peoples’ livelihoods on the line. My specialty is working on critical bids for contracts that are strategically important to the growth or stability of the clients I work with.  This means I often work on retention projects with incumbent suppliers who are seeking to retain their biggest clients. In one extreme case, I was asked to work with a new client on a tender that represented 100% of their business.  No pressure, then!

In my experience, there are many traps for incumbents, not the least of which involves working with a lot of nervous people who are relying on you.  So if you already have the business, and need to retain it, here’s what to do.

• Sit down with everyone in your organisation that interacts with the customer and ask them a very simple question – ‘If it were in your power to improve only one thing about (customer’s) business, what would it be’?  Really LISTEN to the people at the coal face.  They are your eyes and ears on the ground and they usually have the best ideas about what the customer really wants.  They will also know which of your competitors is talking to them– and the ideas the customer is listening to.
• Approach the proposal like it’s your very first pitch to the customer.  Incumbents get unseated because they lose the fire and the passion for the business.  Prove to them that you’ve still got it.
• Use your proposal to paint a picture of the future, not to talk about the past.  Relying on past successes is a classic mistake that loses business for even the most worthy suppliers. When leading an incumbency pitch, your job is to get the customer excited about why they should sign with you for the next three years and beyond – not tell them what you’ve done for them for the past three years (or thirty).
• Spell out the risks of losing your know-how, your proprietary systems, your people - whatever it takes to make them think long and hard about what it will really mean if they go elsewhere.

Building a re-election campaign for your most important contracts

In Australia, the federal election is just about to happen.  So for the last six weeks, we have been treated to a once-in-every-three-years display of politicking designed to win our vote. OK, a confession. I’m a bit of a politics geek.  I follow election night stats the way others follow football. And I have been known to engage in a bit of heckling on behalf of causes I believe in.  (I’ll leave it up to you to guess how I'll be numbering the boxes on Saturday!).

Combine my personal interest in politics with a career in business development and you get someone who just can’t help comparing political campaigns to the campaigns we wage (or don’t wage) to win and retain important contracts.

The election campaign takes less than six weeks (though at times it feels like much, much longer). During this time, our pollies have been tweeting, Facebooking, flying around the country and appearing on any TV program that will have them.  Case in point - the TV interviews that Tom Gleeson did with Julie Bishop and Pauline Hanson in his segment “I Hate You, Change My Mind”.  (Julie Bishop’s performance in that interview really did change my mind.  Pauline’s? Not so much).

What’s most fascinating to observe in an election campaign is the way that people behave when they know it’s make-or-break time. Our politicians absolutely understand that what they do now will determine the job they get – if they get one at all - for the next three years or more. Will they be elected? If so, will they be on the winning side or the losing side? How much impact will they really be able to have for their electorate and for the causes they believe in?

There’s a lot riding on how politicians perform in this campaign - and of course, in the weeks and months that led up to it.

In contrast, think about the contracts that you have coming up for bid soon. You’ll have four weeks to respond when the RFT comes out.

What are you doing to get your agenda in front of the customer now, before the probity period locks down? What are you doing to boost performance? To innovate? To leverage your incumbency advantage, and fence off the business from competition?  In most cases, if you’re honest, the answer is probably “not as much as we should be”.

If you have an important contract that’s coming up for bid in the next 12 months, let’s make sure you have a re-election campaign to retain it.  Get in touch and let’s talk about how I can help you and your team to get ready to re-compete.

Spitball podcast: the changing face of positioning value

With so much competition out there, it’s no longer enough to simply keep providing a good level of service. Customers will always be looking for more - and unless you are going the extra mile to differentiate and to position yourself as the as the clear winner, you will find your competitors are pipping you at the post. As a business development consultant working on large bids and tender responses, I’ve seen first-hand the uphill battle faced by suppliers who haven’t put in the necessary work to position against highly motivated and methodical competitors. Unless you take the time to distill down your knowledge about your customer to what they actually need and value, your proposal or RFT response will be just another heavy tome to add to the pile.

In our latest Spitball podcast, Hamish Riddell, Bri Williams and I discuss “The Changing Face of Positioning Value".  Find out why we think that challenging the status quo and nudging the customer to step outside of what they know is a good thing - http://spitballbiz.wordpress.com/

What contract bidders can learn from crowdfunding – Part 2

Crowdfunding offers a new model of audience engagement that contract bidders can learn a lot from.  Here are my top four lessons from the most successful crowdfunders.

1. Keep reminding the customer of what’s great about your offer. In crowdfunding, this means up to seven email follow-ups. In your proposal, this means reiterating your most compelling points and spinning them in different ways, not just burying them in the Executive Summary.
2. Make it real. Crowdfunding projects that are supported by engaging video and visuals outsell other projects by a factor of 10 to 1. Successful crowdfunder Chris Thomas, who raised $110,000 through Kickstarter against a target of $10,000 to bring “sleep earmuffs” to market (yes, really), says that there is a direct correlation between “the quality of the video and the bids, and what you end up raising”. Think about how you can elevate your pitch above the usual boring wasteland of uninterrupted words.
3. Make it stand out. In crowdfunding, successful projects tap into needs that customers didn’t even know they had. For example, Patient Zero raised $230,000 through Pozible to stage real life zombie battles, 23 times more than the $10,000 it was originally asking for. In a bid, you’re battling for attention in a crowded marketplace; if everyone can tick all the boxes in the RFT then what makes you any different? Be bold, be an expert, and show the customer a compelling vision of their future working with you.
4. Give something extra. Crowdfunding isn’t charity, and successful crowdfunders recognise that people want to get something back to their investment. A while back, I invested $100 through Pozible in a community project that eventually raised its target of $10,000. In return, I was offered email updates, an invitation to the launch, and my name on the sponsor’s ‘roll of honour’. Rewards don’t have to relate to the project at hand; offer to share your expertise for free on another issue that you know the client is struggling with.

What contract bidders can learn from crowdfunding - Part 1

Crowdfunding offers a new model of audience engagement that contract bidders — who often believe we are talking to an audience that is already sold on what we do — could learn a lot from. Crowdfunding is a social media platform through which millions of dollars have been raised for projects as diverse as a Parma and pot at the local pub ($259 against a target of $20) to millions of dollars of fan funding for a movie version of the TV series Veronica Mars. In the crowdfunding world, the only measure of a project’s worth is whether people will stump up money for it. Most crowdfunding goes to projects that it would be difficult - if not impossible - to get traditional funding for.

There is definite hierarchy in the business of raising money to do stuff.

At the top are products and services that are deemed essential to corporate or public life.  These are funded by governments or businesses through contracts and agreements.

In the middle are traditional grants, where hopefuls parade their wares in front of an entity that has money and is prepared to give some of it away (generally a large corporation, charitable foundation or private donor).

Crowdfunding is at the very bottom of this pyramid.  This is a very interesting place to be, in that crowdfunders are talking to a very wide audience that may or may not have any money - and even if they do, have no intention at the moment of giving any of it away. This forces crowdfunders to put their project in front of everyone they know in a way that is so inspiring that it will prompt them to immediately pull out their credit card.

Check out Part 2 of this article for my top four lessons for contract bidders from the most successful crowdfunders.

Evidence-based Bid Pricing webinar

This month I talked to Greg Eyres of InforValue about how organisations can derive more profit from customer contracts through a smarter approach to bid pricing. The resulting webinar on Evidence-based Bid Pricing is now available to view in Greg’s Resource Centre.

Greg is one of only a handful of specialists in the world that practice in the area of Tender Pricing and his work has dramatically influenced the bid success of some of the largest companies in the world, including Motorola, CSC and IBM. Greg has also developed a number of patents in this space and his articles on tender pricing have been published in industry publications including Informs Journal, Frontiers in Services and Shortlist. Recently, Greg developed KPrice - the world’s only evidence-based pricing tool suite designed specifically for tendering. A Chartered Accountant by training, Greg now consults on Tender Pricing issues around the Asia-Pacific region.

In this webinar, Greg shares a number of interesting case studies that demonstrate the dramatic effect of evidence-based bid pricing on the success of pursuits. For example, Greg and his team were once able to convince the client to increase their $60 million budget by 25%, due to the weight of evidence they had acquired about the true cost of providing the service.

The first sale is to yourself

What goes through your mind when you’re faced with a big, juicy opportunity that you would really love to win? Requests for Tender present exactly that kind of opportunity. The pot of gold that a huge contract might bring looks as shiny and enticing as a lotto win. On the flip side, there’s sky-high anxiety when teams are forced to re-compete for business already worth millions to them – and that competitors now also have the opportunity to bid for.

Because competing for business is so stressful, pretty much everyone’s first reaction is to start babbling about themselves and why they deserve to win. Left unchecked, the proposal will reflect that kind of shallow, self-centred thinking and the underlying current of anxiety it came from. This is very off-putting to buyers, who - like the rest of us - are wired to tune out at the first sign of a sales pitch.

Jakob Nielsen, an expert in website usability, did an experiment to measure the way that writing style affects selling on the web. He concluded that “promotional language imposes a cognitive burden on users, who have to spend resources on filtering out the hyperbole to get at the facts. When people read a paragraph that starts ‘Nebraska is filled with internationally recognized attractions,’ their first reaction is ‘no, it's not!’, and this thought slows them down and distracts them from using the site.”

Therefore, when you’re writing a proposal to convince a buyer, the first and most important sale is to yourself. It’s essential to take the time to define your proposal strategy - what the customer most wants, what you can best deliver, and what positions you most favourably against competitors. This gives you access to the most powerful competitive weapon you could ever have; belief in your ability to make a difference for the customer.

Despite this, most organisations don’t have a good methodology to define proposal strategy. It’s common to see less than 5% of proposal development time devoted to strategy, and this usually amounts to kicking around “our points of difference” - the output from which then gets translated into the proposal as some kind of laundry list titled “Why You Should Choose Us.”  Unfortunately, our enthusiasm for ourselves will never be as compelling as enthusiasm for what the customer wants to achieve and how we can help them to achieve it. Or as Dale Carnegie puts it in How To Win Friends and Influence People, "the only way on earth to influence others is to talk to them about what they want and show them how to get it."

The Persuasive Tender and Proposal Writing Master Class provides many valuable tools and techniques to help you to develop your proposal from the customer’s point of view. For example, you will be trained in my Bid Strategy and Purchaser Value Topics Development Methodology, which is licensed and used by organisations in very competitive industries that consistently win almost everything they bid for. Watch the video to find out more.