As business development professionals and sales professionals, we’re keenly aware that securing tenders is not the same thing as winning them.
There’s nothing as frustrating in my line of work than working hard to secure a highly targeted tender for a client, only to see it slip away through poor management in the pricing and tender follow-up stages. It’s not just a missed opportunity: it makes it harder to secure more tenders from those contacts.
Yesterday I had a fascinating hour with a client and senior commercial director from a very successful major UK civils and construction group. It was just a convivial couple of drinks, but also a powerful education on how to manage tenders and turn even bad news into future prospects.
Two particular factors stood out to me over the course of our conversation - the importance of handling risk, and the benefits of following up very closely at senior level.
On the risk side, the strong advice was that literally every job had to be properly risk-assessed in detail – as well as being fully quantified and costed. If the risk is excessive, regardless of the BDM’s feelings, you walked away, even late in the process.
You should never just accept a contract because you’re too busy to look into it in detail. There’s a risk that the other side may be offering a contract heavily weighted against you, and in the other parties’ favour. Every contract of any real size should be checked by a contracts lawyer before you sign it.
Secondly, the involvement of senior management is critical when following up a tender. When you submit a price, it should be followed up closely by either the BDM or a director - or both - to the point of a win or a loss. That alone will impress the other side that a) you’re professional. b) you really want this type of work and c) you’re worth building a relationship with for future win-wins.
Even if you finally lose that tender, don’t walk away just yet. There is a critical next step that many neglect. A director of your company who knows the tender ought to ask for a meeting with the contractor or developer’s QS and/or senior commercial managers. Ask for an hour to go through the lost tender closely, in order to understand where you were high and what was the price level the other side wanted.
This is a real opportunity to show that you value the job, that you want to understand their requirements, and that you’re committed to working with them in future. By getting to the granular detail of this tender, even though you didn’t get it, you demonstrate that you’ll be capable of delivering a win-win contract for them next time. You might also mention some sweeteners that would make their life easier on future projects. (For example, you could offer two-weekly valuations and payments, in exchange for a small discount. This can make a big difference to cash-flow if you’re cost-heavy on materials, etc.)
Take the initiative and propose new ways of working that benefit both parties in terms of cash, programming and smooth management.
Just do it, and you’ll be turning even a lost tender into a respectful business relationship that will deliver future work.
