Why your tenders are unsuccessful

You need a value proposition to win tenders and proposals  

Dr Tom Sant, internationally-recognised proposal guru, sees around 400 tender responses each year. He’s called in as the ‘emergency doctor’ and find that almost all are on the path to failure.  

>Why? Because almost none of the tenders include a value proposition. 

In our tender writers’ experience and that of Dr Sant, when there’s no value proposition the chances of your tender being unsuccessful is very high. 

There’s so much time put into writing tenders and proposals, that it’s a shame that something so important is almost always overlooked. 

What is a value proposition? 

Value propositions make it easier to win a tender or win a proposal 

Value propositions present the value that you are offering to your prospective client in your tender response.  

Dr Sant says that ‘value’ matters most when: 

  1. You’re competing against a well-established incumbent. 
  1. You’re proposing a process or product that will be new to the client and will save them time, money or make their life easier. But in doing so, there may be job losses or other upheavals.  
  1. You’re proposing that the client moves money or resources from one area of their business to another. 
  1. The client may see doing nothing as their most viable option.  

With any or all of these elements at interplay at any one time, it’s very tough to break through especially when there’s an incumbent.  

40% of businesses that issue RFTs or RFPs don’t change provider because they can’t see the value of change 

According to Dr Sant, 40% of businesses that issue Request for Tenders or Proposals remain with the incumbent because they can’t see – or haven’t been shown – the value of change.  

There’s human psychology at play here. Humans naturally avoid loss. We emphasise the risk of loss rather than the opportunity to gain. Hence, doing nothing can often be the easier option.  

With status quo bias, we assume that what we already have is better, or at least no worse, than the other options on offer. It’s very much “better the devil you know, than the devil you don’t.” It’s a bit like mobile phone providers or banks. We grumble about fees and service but believe that no one provider is better than the others. So we don’t change provider.  

Don’t forget the procurement team want to avoid loss, too 

It’s important to understand what the procurement team assessing your tender submission is looking for

They need to be confident that your tender ticks all the boxes. First, they need to be sure that you comply with the mandatory requirements. Secondly, they have to justify their choices to their management. They want to know that your product or service will be good for their business and for their reputations.  

The answer to the challenge of winning tenders? Have a strong value proposition in your tender response 

There are generally  two types of value propositions used by businesses. Dr Sant describes these as: 

  1. A slogan or tagline that announces the company’s offer to the world  
  1. A value proposition developed specifically for a tender opportunity  

Slogans or taglines thought up by marketing agencies are mostly along the lines of what the company does and are typically seen on websites and in advertisements. The down side? They’re too generic for tenders and proposals.  

More important is the value proposition created specifically for each tender or proposal opportunity. These are powerful because they are precise statements that apply only to the recipient of that tender response.  

What sorts of value propositions work in tender responses? 

Clients want to know that they will get any or all of the following: 

  1. A good rate of return (value for money) 
  1. Improved financial performance (savings of money) 
  1. Operational efficiency (savings of time and money) 
  1. Reliability for mission-critical systems (minimal risk) 

How do you know which value propositions will work in your tender responses? 

1. Make it your business to know the prospective client 

It’s crucial to understand what your prospective client is seeking. This is where your previous conversations with the prospect, your existing knowledge of their business and research all come into play. What are their needs, concerns, and drivers? What’s on their horizon?  

2. Ask these questions to work out a strong value proposition 

To present a strong value proposition, ask yourself two very simple questions: 

  1. What are the prospect’s problems? 
  1. What are their desired outcomes? 
  1. How can you accurately quantify the value your business will bring? 

Let’s look at those points individually. 

Define the prospect’s pain  

Pain happens when something is broken, difficult or uncomfortable. This could be revenue, profit, productivity, risk, timing, staff or reputation.  

Do some research to identify the public issues that are causing the prospective client grief. 

It could be share price, profit downgrades or changes at the top. It could be production problems or staff turnover.  

Even if these issues are not directly related to the tender, they will give you some insights and the possibility of defining a value proposition that can address the problem, at least in part. 

If you have the opportunity to meet with them to discuss the tender, ask: 

  1. How will they measure success for this project or service? 
  1. How have they measured success in the past? 
  1. Do they have KPIs? 
  1. How will success be communicated and to whom? 

Meeting before the tender deadline is not usually possible with government tenders

But bear in mind that generally speaking:  

  1. C-Suite pain points are around the strategic, bigger picture issues, such as improving profits, cutting operating costs, improving cash flow, expanding market share, introducing new whole-of-business systems or technologies.  
  1. Middle management is more concerned with tactical value: improving operational efficiency, reducing errors and downtime, improving quality, achieving compliance, introducing best practices, improving employee morale, enhancing reputation. 
  1. Always remember that personal concerns are also important. The tender assessment team and final decision makers want to be seen as heroes for making the decision to invest in your product or service for the outcomes it brings to the business. 

Define their desired outcomes. Explain in your tender submission how you will deliver benefits or results that help to meet their desired outcomes 

You want your tender response to explain clearly and simply how your service or product will deliver benefits that will assist the prospective client to meet its needs. 

Keep it positive and understand what not to say in your tender response

Quantify the outcomes you can deliver in your tender response 

When you know what the prospect wants to achieve, you can put some numbers (percentages, money, time) around the results you will deliver.  

For example, explain that your solution will: 

  • Save X% of money each year 
  • Save X% of time 
  • Reduce costs by X% 
  • Increase ROI by X% 

When you quantify the outcomes, you make your value proposition so much stronger. Then, you must give evidence for how you’ve done this before. 

Hence, data is very important as evidence for your capabilities and to demonstrate your success in delivering the product or service. 

For more on Dr Tom Sant, go to: http://www.hydeparkpartnerscal.com/books.htm 

For help writing, editing or proofreading your tenders, proposals or business documents, head to the contact page or call us on 02 8036 5532 or 0411 123 216.  

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