Flipping the script - how imagining failure leads to winning incumbent bids
By Kaitlin Wiffler, Senior Tender Specialist (Brisbane)
You have worked with this client for years. You know their business inside out.
So why do incumbents often lose tenders?
In a market where competitors are prepared to offer pricing in a race to the bottom, defending an incumbency can be the most difficult position to win. While familiarity with the client provides greater insight into their unique needs, it can also breed complacency. Client stakeholders may carry pre-existing perceptions of your performance, and internal teams may assume that “the client knows we can deliver”. This mindset can cost your team winning the bid.
The incumbency challenge
As an incumbent you face unique challenges compared to the other bidders.
You have known weaknesses: The client has firsthand experience of your delivery and knows when your team has failed to deliver or has gaps in its capability
Your offer must be realistic: As an incumbent the client already has a pre-existing understanding of your capability and track record. Promising new innovations or discount models will leave your client questioning – “why didn’t you offer us this already?”
Pricing pressure: An incumbent price build takes into consideration realistic underlying costs, likely rostering patterns based on current workload and expected EBA conditions and increases. Your competitors do not have this pre-existing understanding of the day-to-day intricacies of the contract, and may submit a lower offer as their pricing is not impacted by the same assumptions as that of a incumbent.
Internal complacency: Operations teams may become complacent due to positive feedback received from on-site client stakeholders. Award decisions are not made on-site, but are made at an executive and procurement level, where commercial and financial offers are just as important as strong relationships.
Many incumbents lose bids because they fail to:
Differentiate themselves from their competitors
Anticipate evolving client needs
Align their pricing and commercial terms, and
Deliver compliant and compelling offers with clear messaging.
So how can your bid team identify potential gaps and avoid complacency?
A proactive approach to test your win strategy and understand your client’s needs - before submission - is running a pre mortem
After developing your win strategy internally, gather your bid team together to look back at the tender from another lens. Conduct a pre mortem exercise to challenge your strategy to ensure it addresses the clients issues, provides benefits, includes features and delivers proof of how your offer is the most compelling.
What is a Pre Mortem?
A pre mortem is a risk management exercise where the bid team images that the tender submission has already failed and then works backward to identify possible issues. This proactive strategy allows the bid team to uncover potential weaknesses early in the bid process, challenging the strategy to ensure it delivers tangible benefits that solve the client’s issues.
Pre mortems allow bid teams to:
Identify blind spots early and create solutions to mitigate issues, and
Stress test the win strategy against the clients drivers and likely competitor offers.
How you can run a pre mortem with your bid team:
Assemble your bid team: Include your Bid Manager, management stakeholders, business development, subject matter experts, estimating, commercial, operations and compliance
Assume failure: Set the scene- its 3-6 months from now and your company has been notified you lost the bid
Collect responses independently: Each team members should prepare an independent list of why they believe the tender lost. It’s important this is done independently to reduce bias and influence amongst team members. Likely reasons may include price, commercial terms, stakeholder trust, gaps in your solution and differentiators from your competitors
Share and consolidate responses: Ask all team members to share their reasons with the bid team collectively. Solutions can also be collated by the Bid Manager and presented anonymously.
Categorise risks and identify mitigations: Group the identified risks into categories such as, commercial, financial, technical, delivery, compliance, stakeholder and value proposition to develop solutions for inclusion in your final bid. The bid team should collectively discuss risks to identify potential solutions to mitigate them
Assign owners and due dates: Identify which members of the bid team are best suited to prepare solutions to mitigate potential issues. Assign content deadlines to ensure these solutions are ready for review during your bid review process, and
Track and close-out: The Bid Manager should log actions and progress in the Tender Management Plan, ensuring these solutions and proof points are identifiable during the bid review process.
Winning from an incumbent position is not about relying on your track record of existing performance with your client, it’s about challenging your assumptions and stress testing your strategy. A pre mortem turns hindsight into foresight, it helps your team to identify issues early, better communicate differentiators and delivers a solution that satisfies your client’s needs. In a competitive market, it’s a strategic measure that can be the difference between winning and losing.
Enjoy this blog? Check out our other blogs, 5 Smart Questions to Ask SMEs at Tender Kick-Off or 10 Ways To Lose a Tender.
Need some help? The Tender Plus team offers tender writing, editing and consulting services Australia wide to help take your tenders to the next level. Get in touch to learn more about how we can assist you to pursue and win competitive business.