Top tips for SMEs to win a tender

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Tenders are big business. Last year, one of Australia’s largest buyers – the federal government – spent $59.447 billion buying goods and services through Austender and issued 69,236 supplier contracts. While tenders can be a lucrative source of customers for your business, they are not easy to win.

Three challenges inherent in competitive tendering

Firstly, every tender is a competition. While you are trapped in your office slaving away over a submission, it’s easy to forget that your competitors are doing exactly the same thing. You might be up against a handful, or possibly hundreds. Only one submission will win and many will be thrown out instantly.

Secondly, much of the advice that works in other forms of selling simply doesn’t translate to competitive tenders. For example, tenders are most definitely not a numbers game. Responding to each and every request for proposal (RFP) that comes your way does not increase your chances of winning. In fact, this depletes your most important resource – your team’s energy and enthusiasm.

Finally, tenders are time-consuming, unpredictable and expensive. Your team could spend anywhere from one day to many months on a single submission. Release dates are unpredictable, making tenders difficult to plan for and resource. And they can cost a lot of money– none of which is recoverable if you lose. Or, as one exasperated client said, “it’s like buyers have a blank cheque to spend our money on their tenders”.

Five ways to win

Competitive tenders are winnable, but let’s get real about this – it’s going to take effort. You wouldn’t compete at the Olympics without investment and preparation, and a tender competition is no different.

Here are five things you can start doing immediately to dramatically increase your chances of winning.

  1. Bid less to win more. When you’re spreading resources too thinly across too many marginal opportunities, you are depleting team morale and productivity and depriving yourself of the insights you’ll need to win the really big ones. Aim to double your win rate by halving the number of tenders you go for, concentrating your energy and effort where you have the greatest chance of success.
  2. Know your value. Successful new business pitches are a case of “ready, aim, fire”. Most of us spend way too much time aiming and firing (targeting customers and firing off presentations and proposals), when we are simply not ready to win them. Build your team’s readiness by exploring how your work creates commercial value for your customers.
  3. Engage your team. People win proposals and it’s the smart people in your business who do the work who will also win it for you. Give them training and support to write persuasively about what they know, and make proposals part of their job description.
  4. Offer more than they’re asking for. In every successful tender I’ve been part of, the winner offered something truly compelling that exceeded the specifications and gave the buyer value they couldn’t get elsewhere. A request for tender is a bit like Christmas list to Santa – albeit one that has been written by a pragmatic adult, not a child. Buyers go for what they think they can get but secretly they’re hoping for more, and are easily swayed by a compelling value proposition.
  5. Finally, minimise their risk of choosing you. A recent sales effectiveness study by Qvidian showed that only 63% of salespeople made their targets and many sales are lost to “no decision”. Similarly, not every tender has a winner – sometimes, the risk of buying simply seems too great. Understand the risk the buyer faces in choosing you and use your submission to reduce that risk.

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