I received a phone call just before Christmas from a prospect in the software development business. They specialize in events management software and have won several contracts around the UK. The call was on foot of an opportunity that they’d been alerted to; Tourism Australia was looking for Event Management Software…how serendipitous!
Our prospect was elated with the opportunity – a three-year contract in Australia – this would really put them on the map! All they needed our help to do was make sure they submitted a compliant proposal – one that ticked all the right boxes and soon they’d be jetting off to sunny Sydney.
When I was growing up there was a TV advert that went “If you had the only car in the world, you could drive as you liked – but you haven’t so you can’t”. So it is with government contracting – if you are the only business submitting a proposal then you can pretty much name your price. Unfortunately, for most contracts, you will find yourself competing against three or more businesses, all of whom reckon they have the best chance of success. But who does have the best chance of success? That’ll be the business with the best competitive intelligence.
Gathering Competitive Intelligence
Competitive Intelligence refers to the buyer, opportunity and competitor information that when analyzed through the lens of your business capability to deliver indicates your likelihood of winning the contract.
We told our prospect to hold off on the sun-lotion and instead establish their likelihood of success as follows:
We know that the keywords match, but what else do we know about the opportunity?
Is there a budget? Without know what the budget for the contract is, we have no way of putting a price that’s anything other than a guess.
Does the buyer actually know what they want; are the tender/contract requirements reasonable? If it’s not clear what they are looking for, then it’s going to be difficult for you to propose a solution meets their needs.
Is there an incumbent provider? If there is and they have a great relationship with them, is there any likelihood that they’re actually going to award this contract to someone new?
Who else might compete for this? Are there other businesses better located or with better solutions or simply cheaper than we are? Is there any reason why they would choose us over anybody else.
Does the buyer have a good track record when it comes to awarding contracts? Not all buyers operated to the highest standards. You don’t want to get stuck with one who’s going to be challenging to work with, regardless of how amazing it would be to have their logo on your website!
All else being equal, how confident are you that your proposal will ultimately be the winner. Does your proposal meet all of the requirements that the buyer has set out? Do you represent a ‘risky’ purchase for them? In this case, there were no more than two months between contract award and ‘go-live’ – is that a timeline you can work within?
Applying Competitive Intelligence
As a rule of thumb, building a winning proposal costs 5% of the contract value. The winner of this contract worth $450,000, will spend in the region of $22,500. When I mentioned this to our prospect, I could almost hear them deselect the business travel option on their flight booking! It’s a lot of money – probably worth it if you’re confident of success, but what if you’re not sure. This is where the application of competitive intelligence comes in.
To make sense of the data gathered we typically use the tools built into our platform, but you’ll find plenty of ‘Bid/No-Bid templates on the web. A Bid/No-Bid tool lets you score each piece of competitive intelligence individually and then compile a report. The winnability of the opportunity is inferred by comparing the result against previously won (and lost) opportunities.
Intelligence into Insight
The competitive intelligence gathered has a major role to play once you decide to compile a proposal. Use the intelligence to generate customer and market insights that set you apart from your competition. Dig deep into the research to understand what are the real challenges and opportunities for the buyer? Hint: They didn’t write them into the tender! And then, take the time to come up with insightful answers that show you really understand them and that choosing you is their best opportunity to be successful.
If you can demonstrate that you know the answers to their questions, and how you will provide solutions in a structured and straightforward way, your chances of success will be greatly increased.
TenderScout runs monthly workshops to help SMEs demystify the tender process. We cover how to use intelligence in these events. Contact us at email@example.com if you would like to be invited to one of our workshops.