What is the right strategy to win a tender and why?
A recent post in HBR France reports an interesting and very realistic fact:
according to research, a firm answering to a request for tender has almost no chance to win it.
It is hard to tell whether it applies to both the private and public sectors all over the world, but still… From my own experience in France, Spain and Russia (as well as other ex-soviet countries) the fact is undeniable: bidding a tender is in 90% of cases a loss of time. And the list of countries where this rule applies may be much longer.
So is it necessarily corruption? Based on experience one could say “yes, of course”. Even if this French article argues with a really prosaic reason, which appears to be quite true as well, and even somehow useful, as it was a strategical weapon in the competitive globalisation.
Accompany the client in his problem’s conceptualization…
Frequently, the issuer of a tender (potential client) is already in a relationship with a supplier, who is often a favourite one. This supplier / provider very often helps the client to technically formulate the tender and even sets his tendering service. And, what is most important, at the very beginning, the existing provider helps the client to become aware of the issue / need that the client is experiencing. This allows the client to identify a problem they wouldn’t detect on their own without being facilitated. This is a positive / useful way of functioning.
According to the French author of the article, there is only one reason to bid: if you are almost certain to be able to interfere between the client and his current provider and to change things… So, in the global competitive war for the contracts, the logical and strategic chain to get the job is:
- build a relationship with your potential client
- make the client aware of an existing issue
- orientate him towards a few directions to solve it
- organise the tender
- participate in it
- or simply skip the two previous steps and get the contract
Even more! The share of technology transfer between a supplier and a customer is estimated at 25%, even if the supplier is not retained in the end. Meaning: in addition to the lost time and energy, the supplier loses 1/4 of its strategic knowledge to the client’s benefit, who neither acknowledges it nor thanks for it.
That’s why it is strategically important to be upstream in order to wisely guide the client and win the contract. To some extent, this is an intelligence specializing in soft power in order to cause sales. But then: what is marketing? And what is competitive intelligence? Doesn’t a somehow aggressive soft power do exactly the same?
Even if…
sometimes a provider could be a friend, and even a very close one. In this configuration the friend gets the contract without any tender. However, if the process of tendering is mandatory, eventually the friend’s bid turns out to be the best… And this doesn’t happen only to Russia and in the ex-soviet republics, if you know what I mean…
I agree that bidding to win a tender is a waste of time and energy. I keep seeing (aspiring) providers get crazy to complete and send their bids to “picky” potential clients who punctually reject them.
I like your point on accompanying the client in identifying the real issue, and showing a way to solve it. And here is why: Ultimately, it always comes down to Trust. If you wanted to solve a problem in your company, would you choose a provider who sends you a perfect looking proposal, but you have no idea who this provider is, or would you rather choose a provider you already know and trust? Business is a matter of trust. People only spend money when they trust that they will get what they need/want for that money.
So how do you build trust? Not by applying some aggressive techniques, but rather by giving the potential client the feeling that you care about helping to solve their issue. This means, you listen to the client and help them figure out what’s the real issue, and then describe how you could solve that issue. Well, this can NEVER be achieved simply by crafting the (assumingly) perfect bid/proposal and sending it.