Why Do You Need a Specific Strategy for Tenders?
Submitting proposals for tenders is another sales channel for companies, and very much like sales, you need a strategy to win these deals. However, the tendering process comes with unique challenges that necessitate a tailored strategy to enhance your chances of winning these deals.
Unlike regular sales deals, tenders typically do not allow for any negotiation before or after the proposal submission. Therefore, it’s crucial to put your best foot forward right from the start. This means offering the best value and pricing possible for the buyer’s consideration.
Crafting a compelling proposal is a complex task. Key questions to consider include: Who else is likely to participate in this tender? How can you ensure your pricing is competitive yet profitable?
Leveraging Data to Enhance Tender Proposals
Historical data can be a powerful tool in shaping your tender strategy. Although not all companies disclose tender results, available data can provide valuable insights into your competition and prospective customers. Here are three key analyses to help you get started:
1. Understanding Your Competition
Is There an Incumbent?
When reviewing past tenders, identify any incumbents (suppliers who have previously won similar tenders). Repeated wins by the same supplier indicate:
- A strong relationship with the buyer
- A high likelihood of their participation in the current tender
- A formidable competitor
While incumbents don’t always win, their track record suggests buyer satisfaction with their services. To compete effectively, you must differentiate yourself by demonstrating superior value.
Assessing Competitor Strengths
Analyzing past tenders involving your competitors allows you to gauge their strengths and weaknesses by examining key metrics such as tender success rates, average bid values, and bid submission frequency. Qualitative analysis of proposal quality, customer feedback, and market reputation provides additional insights.
By understanding their service and product differentiation, innovation, and adaptability, you can identify strengths to emulate and weaknesses to exploit, refining your own tender strategy to be more competitive and better aligned with buyer needs.
As Sun Tzu famously said, “Know the enemy and know yourself; in a hundred battles you will never be defeated.”
2. Finding Optimal Pricing for Tenders
What Is the Price Range of Winning Tenders?
Reviewing past bids for similar deals, especially from the same buyer, can reveal important pricing trends. If the lowest bids consistently win, it indicates high price sensitivity. Conversely, a lack of clear trends suggests that other factors are influencing the buyer’s decision.
By analyzing these bids, you can gain insights into the buyer’s budget and set a bid price that is both competitive and attractive to the buyer.
3. Predicting Purchasing Cycles of Tenders
When Will the Next Tender Be Released?
Historical trends and purchasing cycles can help predict future tender opportunities. Some tenders and contract renewals are cyclical, allowing you to anticipate their release based on past patterns.
This foresight gives your team more time to prepare, potentially reaching out to influence the buyer before the tender is announced, thereby increasing your chances of success.
Conclusion
A well-defined tender strategy, informed by historical data and competitive analysis, can significantly improve your chances of winning. By understanding your competition, setting optimal pricing, and predicting purchasing cycles, you can craft proposals that stand out and meet the buyer’s needs more effectively.