Procurement by Tender – The Real Reasons Why Businesses Fail at their First Attempt

procurement by tender

Most businesses fail with their first attempt at a formal tender. They needn’t, but they do. This prompts some to give up: ‘I tried it once, didn’t get anywhere, it’s a waste of time.’

This is a shame. Formal tenders are the route to larger contracts, repeat business, and the opportunity to earn more revenue while having fewer clients to manage.

One reason that businesses give up is that they fail to grasp the reasons for their failure. They console themselves with the notion that the result was a foregone conclusion, or that the winning bidder came in with a ‘giveaway’ price. This is rarely the reality.

Here are two of the main reasons that first attempt tenders fail:

1. Failure to grasp the complexity

There’s a common assumption that tendering is like submitting normal proposals – only a bit more detailed. The complexity and the effort required is actually an order of magnitude greater and must be planned for. The process is detailed and every step is important.

Businesses fail to plan the tender preparation properly or to get the expert help they need. They then find that they are lacking key details when it’s too late to do anything about it.

2. Too much marketing blurb

Faced with the demands of a substantial tender document it’s tempting to look for a shortcut. Businesses fall back on existing and standard marketing copy rather than make a concerted effort to answer each question carefully and precisely. This will only frustrate the client.

You may still fail – but you can learn from the experience

Even if you do all the right planning you may still fail at your first attempt. Don’t get despondent – learn from the experience. What is your current sales conversion rate? Is it reasonable to expect it to be any higher with formal tendering? Put another way, you can’t expect to win them all.

The critical point is how you deal with that failure and use it as a learning opportunity.

Ask for a debrief. This is a good way to build your relationship with the client. It shows that you are keen to understand what they are really looking for from their suppliers.

Be honest with yourself and your team. Learn what you need to do differently next time.

Many businesses that are experts at tendering and enjoy an excellent success rate started with a failure. The difference is that they decided to learn from the experience, they got some expert help, and they persevered.

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