BD tips and insights

Evaluating tender opportunities – is this a client you really want?

Evaluating tender opportunities can be tricky. There’s a real tendency to ‘go for it’ in many organisations at any ‘cost’ once an RFT/P is released.

Evaluating tender opportunities – 5 lenses to try

This blog shares 5 lenses (or frameworks) to help you think more critically when evaluating tender opportunities. This reduces your organisation’s risk of squandering scarce time and precious resources in pursuing poor-fit clients or tenders with low prospects of success.

1. Evaluating tender opportunities – beware competitive arousal dynamics

Common sense can go out the window when it comes to evaluating tender opportunities.

Costly mistakes leading to team stress can be made in this adrenaline-induced state we like to call ‘competitive arousal’.

Competitive arousal can be helpful. It can motivate firms to focus and produce their best work in order to win.

Some of the urgent dynamics present in states of competitive arousal that can be helpful to understand are:

1. The bid is now.
2. The bid is specific.
3. The end is in sight.
4. People in power (and people with power) will benefit.
5. There’s a tribal patriotism at work.

See JMA’s blog  Why firms keep bidding on losers and what you can do about it.

2. Evaluating tender opportunities – understanding the direct and indirect costs

‘Let’s throw our hat in the ring and see what happens’ is often heard when a business may have been a bit quiet and with little regard to all the costs associated with ramping up to resource a tender.

There are lots of good reasons not to respond to RFTs/RFPs.

Consider these bid costs and weigh them up against your chances of success:

• financial cost (external consultants, production, delivery)
• opportunity cost for team (doing billable work or pursuing other more ‘winnable’ work)
• stress and morale cost of an increased workload and then losing for your team
• the risk of being seen as a ‘loser’ by the prospective client and/or evaluators (and potentially making it harder to prove yourself to them next time around)
• professional and management attention deflected to damage control and fall out.

For a deeper dive into bid or no bid decisions get JMA’s Ultimate bid or no bid questionnaire in Part 1 of Win more tenders.

3. Evaluating tender opportunities – understanding the value of the win

With those dynamics in play organisations can rush in to bid without having truly spent the necessary time evaluating tender opportunities’ ‘value’ or ‘size’ of the win.

Based on the RFT/P, intel and other market insights you can often assess (or make an educated guess) about the actual likely value of the ‘win’.

Then assess this against your production costs and likely profitability of this opportunity.

For ‘panel’ appointments if you do win: does the team have the appetite to ‘make a go’ of the client relationship so you can ensure you get more than your ‘fair share’ of the work on offer?

Sometimes you may be willing to discount or ‘loss lead’ in order to win a prestigious client, but for most businesses this can lead to a race to the bottom and tank the wider market. Also consider if resentment will grow at servicing this ‘low’ paying client amongst your team who will not be incentivised to prioritise this client or to do their best work.

See more at JMA’s blog Size of the prize – dimensioning tender, bid and proposal opportunities.

Also see JMA’s blog Lost proposals – was your price really too high?

4. Evaluating tender opportunities – is this bid ‘rigged’ in some way?

Sometimes a tender opportunity will appear seemingly from nowhere and almost seems ‘too good to be true’.

Often these are genuine opportunities that could well be in your interest to pursue. But on occasion you may have been invited to tender to ‘make up the numbers’ to help add credence to the tender process. Other times an organisation may want to ‘test the market’ (perhaps to gain insight into particular IP, methodologies or solutions) and will ‘decide’ after many, many tenders are submitted to reappoint incumbents, cancel the process, or take work in house.

If you have misgivings about the genuineness of a tender opportunity or something about it doesn’t quite feel ‘right’ check out JMA’s blog on RFP red flags when evaluating tender opportunities.

5. Evaluating tender opportunities – evaluate the prospective ‘client’ – is it a client you REALLY want?

Another way to think it through and is to consider evaluating tender opportunities as though you have ‘won’ by assessing the prospective client against the following factors:

• are they a good strategic fit for my business?
• are they highly likely to be a profitable relationship?
• is this a client going somewhere  –  that is, on the ascendancy?
• does this client help me and my team to use and develop skills which will be appealing to other desirable clients?
• is this a client which I can grow through further services?
• is this client a good commercial proposition?
• are they likely to pay well, on time, and absorb only reasonable amounts of resource for the fee return?
• does this client have the potential to introduce me to new opportunities and refer work?
• will the team like working for this client?
• can we do a really good job for them, and get good outcomes for them, and become truly valuable to them?

When evaluating tender opportunities against this list if you can say ‘yes’ to most of these, then this is a client you want to win and then keep working with.

More than a couple of ‘no’s’ and it is probably a client you don’t want to pursue through a tender opportunity and your time and energies are better spent elsewhere.

Bonus lens 6: Evaluating tender opportunities – ultra quick test

If you win, are you likely to produce a highly satisfied client?

If it’s a no, or doubtful or going to be a real stretch to service this client, it may be better to decline to bid this time and wait for another better-fit tender tender opportunity.

If you need help evaluating tender opportunities through different lenses please get in touch, JMA can help whether it’s for a specific bid or to improve your organisation’s overall bid or no bid qualification process.