October 3rd, 2012
By Academy group 23 Chairman Peter Sutcliffe
Tenders and quotations can be a necessary chore for many businesses and yet, with some care and attention, they can be turned into a useful business acquisition tool. Here are some thoughts on the process and how it can be made effective in the business.
When looking at your competitor quotes, it is amazing how they all look alike; therefore, you must make sure that yours is different and stands out. Make it a point of differentiation.
Research as much as you can to ensure your tender meets their objectives. Often, gaining copies of the prospect’s last financial accounts can perhaps identify where their focus lies. If a plc then the Chairman’s statement can be very helpful in your business proposition. You can even quote his/her words and highlight how you are meeting the organisation’s business strategy/direction.
Ideally you need to identify and meet the people who are going to read your tender- though this is not always possible. Creating an excuse or a query that will enable you to meet the person(s) will help to ensure your pitch is as appropriate as possible to their decision criteria. It will also help you to use their words as much as possible in your document to gain empathy. This applied equally to echoing the language in the request. Knowing your target audience/ decision maker(s) will affect your wording considerably i.e. emphasis on Finance, Marketing, Sales, Logistics, Production, H&S, Quality or whatever.
You may be asked to follow their format- if so make sure there is a covering letter which covers all the key points. Your full tender response must include all of the key sections mentioned below –
- First impressions are crucial. Many deals have been lost because of the physical size of the tender document can appear daunting to the reader(s). If there is a need for a lot of technical data or similar then place them in a separate document. Being presented with two documents, ‘Tender’ and ‘Appendices’ looks less daunting,
- Keep the cover simple and professional- perhaps a photograph of your team and/or the solution you have already installed elsewhere for another client (i.e. PROOF- been there, done that, worn the T shirt…)
- The first few lines are crucial- they must include your business proposition and differentiation – that is, why you? and the financial £’s implications/ROI of your solution, i.e. Differentiation … “Our solution will save c£X’s over the next 7 years and can be installed by October 2012”
- Where ever possible simplify your argument with diagrams and/ or pictures. Pictures of similar work you have done for other named clients gains credibility –ETHOS, why you, direction, leadership – Also show graphs showing, for example, when any investment is re-paid/ break-even point – far more convincing than 1,000 words and also makes for easier reading.
The initial section, Executive Summary is probably the last part you write and summarises all the key points in your document saying where you can find all the key information- probably no more than 1½ pages.
Beware of using acronyms and technical terms which are not explained – remember you may not know the disciplines of all the decision makers.
People like, and buy from, people. Make sure you have a section with photos of your key team members, their roles and responsibilities.
One of the early sections must be “The Background” or similar heading which repeats the understanding of the issues and the situation– PATHOS (empathy & understanding) Particularly highlighting the consequences and costs incurred if nothing is done.
The following section should be your Solution, ideally offering a choice or range of options with the one you particular recommend with the reasons why. There is a very good reason for this. How often do you lose out to competition because their solution is different, or cheaper? By offering a few different solutions (e.g. Options A, B and C) you can often eliminate any competition and show you can offer a lot more. How often do organisations pick the cheapest option but then later upgrade or buy add-ons?
Unbundle as much as possible. By splitting the costs down then prospects can do a ‘pick and mix’ but do not ‘sell’ on price as your main driver. Clients that buy totally on price will more than likely cause aggro later on. Justify your sale for as many other key reasons as possible and focus on one that makes you unique. Consider what is motivating the decision maker? Often it is his/her feeling that they will “not wish to be let down”/ the security provided by you. After all it may be their job on the line!
Can your business proposition make your prospect unique and/or give them a competitive edge by, for example, making them more superior in their market sector? Can you form a partnership – a ‘Win Win’ situation.
The Return On Investment (ROI) section is very important. Emphasise that your solution will achieve a better ROI- more £’s and/or sooner. Show graphically for all the options as this can swing the sale for the higher investment showing a better return– LOGOS (Logic / cost justification, benefits, payback). NB It is crucial that you clearly state any caveats i.e. that any ROI is based on certain criteria (i.e. not guaranteed!).
Ensure there is a Contents Page so that key information is easy to find and the layout follows a standard throughout and include an Action Plan with dates (with caveats to cover possible delays!)- who will do what and when (including the client’s responsibilities!). If you have one, include your Customer/Client Charter saying what you do and do not do differently?
Try to be the ‘One Stop Shop’ providing all of the solution i.e. no worries.
Finally, state in the covering letter the follow up procedure/ next step, so that the client has a call to action.
Peter Sutcliffe is Joint Chairman with Karen Humble for the Academy for Chief Executives North East Chief Executive Forum (Academy Group 23). Amongst his specialist areas are strategic business planning, funding/raising finance, performance and change.