9 ways to ‘stack the deck’ to win that vital tender

9 ways to ‘stack the deck’ to win that vital tender

Jul 25, 2018 | Marketing, Operations, Sales, Uncategorized

 

The better prepared the tender, the better the chance of winning.

Hard to disagree with that statement, but then what makes for a better prepared tender?

While price has a role to play, it is only the deciding factor when all else is equal. Your task as a tenderer is to ensure that all else is not equal, and that your tender represents the best value to the enterprise wanting something  done. Then  you have stacked the deck!

A friend of mine is a senior engineer in a very large building contractor, one of those who is changing the skyline of Sydney on an almost daily basis.

The stress is killing him.

There is the constant need to keep the work flow of projects moving, identifying, preparing and winning tenders, then there is the stress that really kicks in as the construction side of the business tries to extract profit out of a ‘successful’ tender.

Talking to him I was reminded of Albert Einstein’s quote that ‘If I had an hour to fix a life defining problem, I would spend the first fifty minutes defining the problem, the rest is just maths’

When preparing a tender, the filling of the form is the maths. You have to get it right, all questions answered with quality copywriting, no spelling or punctuation errors, professional layout, but still just maths.

The key to winning is not in the maths, that is just table stakes, it is in the manner in which the vision of the contractor is reflected in the documents, the manner in which the tender you submit reflects value in the eyes of the judges. Each judge in the process will have a different definition of ‘Value’. The accountants will focus on cost, the engineers on the durability, regulatory and engineering integrity, the architects in the manner in which the construction reflects the aesthetic and functional innovations contained in their design, and the stakeholders in the return on investment, which is a function of both price to build and price that the construction can generate from buyers and users.

When you spend an extra $1 on the build that generates an extra $2 on the market value, the extra investment is a great one.

So what makes for a winning tender, that is also commercially successful as the job is completed?

Seems to me that the best measure is the degree to which the tenderer comes back and offers some sort of inside running for the next big project because of your performance in the last one or two

Tendering against someone who has that sort of inside running is usually a waste of time and money.

In the case of public infrastructure tenders, where price is a more important factor, you also have to manage the added complication of the nature of the bureaucratic processes and the politics of  the day.

Just ask Acciona, the Spanish firm who contracted to build the Sydney light rail project, which has become another infrastructure debacle. They seem to have taken the arguably inadequate tender docs literally, failed to do their own due diligence, quoted a price and time line, then found themselves in a billion dollar slanging match with the government.

When was the last time you saw a really complicated project RFQ that reflected all the complications that evolved during the construction?

So, how to stack the deck in your favour?

Perhaps a better way of putting it is to answer the question: ‘How can I quote the highest reasonable price, and still win the tender?

Know more about the project than the principal.

Understand what is really being requested. Most tender documents are dry tick the box type things that have nothing of the ‘humanity’ to which most projects are setting out to make a contribution. Focus on the humanity, and vision, not just the yes/no questions.

Understand the ‘vision’ of the principal.

Better yet, shape the vision, so that you can shape the guidelines of the tender docs to best suit your distinctive capabilities

Have relationships with all the ‘functional Buyers’ in the process.

It is always the case that there are a variety of roles played inside a tender process. Engineering, regulatory affairs, financial, architectural, and project management all will have a differing perspective of the end result, and the best route to get there. There is also always someone with the final call, a right of veto. Understanding the nuances of these functional variations, and accommodating them in the manner in which you approach both the documentation and the informal conversations that occur is vital.

Anticipate and leverage ‘Buyers’ personal inclinations.

The ‘buyers’ in the process, in addition to the functional bias, will have personal and emotional views about the best tender. Some will be for you, some against you, some ambivalent, and sometimes there is one prepared to ‘coach’ you on the side when you are a their preferred candidate. Being sensitive to these views, and leveraging them is often of critical importance.

Identify information holes.

No RFQ is ever complete, so identifying the ‘information holes’ not only gives you added credibility, it also gives you the opportunity to get a jump on competitors

Articulate any obvious shortcomings you may have.

Rarely would a tenderer be an absolutely perfect fit for a job, there will always be compromises that can be used as objections by those who may have an alternative favoured candidate. The best way to deal with objections is to raise them yourself, and deal with them. Once dismissed in this way, they generally cease to be valid objections.

Be proud of price.

Remember the old cliché ‘Nobody ever got fired for buying IBM’? It still applies. Human beings are always concerned with their own best interests, which correlates strongly to making as few mistakes as possible. Most are wary of the cheapest price, there is always a catch, either in the fine print, exclusions, or poorer quality, so there is always room to justify a reasonable price that delivers value but not at the rock bottom.

Tenders are competitions.

As in any competitive situation, the more you know about your competition, the better able you are to address their strengths and capitalise on their relative weaknesses. A tender process is not all about you, and your response, it is also about your response relative to the others in the race.

Attention to detail.

It is so obvious that it should not be in this list, but nevertheless, is often overlooked. Spelling and grammatical mistakes abound, as do simple editing errors, inadequately or unanswered questions, and an absence of simple but elegant and memorable graphic design. Make sure you do not repeat these mistakes of your competitors.

 

When you lose, as is inevitable from time to time, make sure you invest the time and effort in understanding why you lost, learn the lessons so the next time you are a step ahead.

Photo: industry.nsw.gov.au

 

 

Is data killing marketing creativity?

Is data killing marketing creativity?

Jul 18, 2018 | Branding, Marketing

The credibility of marketing in the boardroom fails the test to be quantitative, simply because it is about the future, about predicting  human behaviour and designing experiences and communications that they will relate to.

We hope.

Businesses are run on data, ‘what is the ROI’ may be the most common question around the board table. When the answer is ‘I do  not know’ or a set of fluffy clichés about customer experience, the accountants, lawyers and engineers who run the joint go to sleep.

Therefore marketers have embraced the availability of digital tools like a drowning man grabbing a floater, any floater will do, and now we are drowning in data.

Problem is the foundations of  the data are shaky, but because it passed the data sniff test, it gets a nod.

The result is boring, risk averse, creatively dead, communication and  marketing programs.

This is great for those few who remain undaunted by the data, who build on a creative platform, using data as one of a number of tools to hone the impact, simply because the competition is so bland.

Where something is unknown , rather than speculating, imagining, and creating, we deliver a dump truck of irrelevant data to fill the hole in the hope that no one asks the key question about its validity. ‘Because it is numbers, it must be right’ seems to be the default position.

The best marketers  today use data, they leverage data, they do not love it, do not allow it to drive the output, just to inform it. They remain creative.

So, my answer to the question posed in the headline is “mostly yes”. However, for those who have figured out how to use data to inform their creativity rather than to drive it, the good times are here. It is much easier to stand out in the sea of mediocrity that now exists for those very few who can harness and direct the power of data rather than being consumed by it.

Cartoon credit: my thanks, again, to Tom Fishburne www.marketoonist.com

 

What is the future of FMCG brand loyalty?

What is the future of FMCG brand loyalty?

Jul 16, 2018 | Branding, Marketing, retail

 

A few things have happened in the last few weeks that made me ask that question.

  • Coles MD John Durkan articulated a clear strategy for house brands, to build them at the expense of proprietary brands. I cannot help wondering if his successor will follow through.
  • I received a package from Amazon full of books, ordered in front of the new GST regime that came in on June 1, and it was covered with ads for Amazon Prime, which is now arguably the most successful loyalty program on the planet. At the time I was surprised, but then a day or two later, I realised they had launched in Australia.
  • Another small supplier to FMCG, a formerly successful business in a country town that had been around for 25 years, with a small but seemingly loyal consumer base, quietly packed it in. In the scheme of things a relatively insignificant event, unless you happen to be one of the people who have worked there for ages, and now find yourself unemployed and unlikely to be re-employed in your home town.

There is  no doubt the trend towards house brands across all categories of consumer spending will continue as retail supply chains become more transparent and global. Consumers are in a position to make judgements on the value they receive based on information from a variety of sources, not just on a label. Combined with the increasing necessity to pro-actively manage their spending, why would they not go for a cheaper item that delivered similar characteristics to a proprietary brand?

The driver of the change is digital. It is revolutionising the way consumers shop, by delivering them information that disrupts existing brand equity relationships. Consumers are now way less tied emotionally to brands, simply because they no longer have to be in order to feel confident about themselves and the quality they will get.

The ‘brand trust’ needed in the past has been replaced by access to information.

Retailers from FMCG to all forms of specialty retail see this. They are setting out to replace the consumer preference for product brands with a preference for their retail brand. Pretty much a strategic no-brainer when you think about it, but hard to deploy, simply because consumers do like some choice, and they recognise the retailers self interest in housebrands.

Mr Durkan points out that in some categories, the Coles house brands have a 50% market share, and seems to wrongly equate that number to consumer preference. In fresh produce, this number would be more like 95%, (I do not have numbers, this is a guess based on what I see) simply because Coles, (and Woolies) have not allowed proprietary produce brands onto their shelves, with very few exceptions, almost from the beginning.

This is not  driven by consumers, this is driven by  the strategy to capture the proprietary margin. If you are a shareholder, particularly of Woolies over the last decade, it has been a good outcome, but for a shopper, not so good. When was the last time you bought a plum in Coles that did not taste suspiciously like a cricket ball?

In FMCG retail, the driver of the change has not been digital, that is just an enabler, the real driver is Aldi, whose growth has hit the gorillas hard, and they have yet to find an answer. Aldi is a retailer, just like Coles and Woolies, but with a limited range, all housebrands, with a very few selected exceptions  like Vegemite and a few Arnott’s lines. This is not digital, it is a different business model, and neither of the gorillas has met Aldi on their own ground.

It is easy to be smart with hindsight, but here goes.

Woolworths responded to Harris Farm, and the move towards ‘specialty and fresh’ with Thomas Dux, initially very successfully, then screwed the pooch by not keeping it separate. Had they persisted, they could have built a very profitable and sustainable business, on a different platform to Woolworths.

The same opportunity offered itself in discount retail. It was not as if there were no precedents! I am old enough to remember ‘Jack the Slasher’ stores that stirred the pot  probably  35 years ago, Franklins, Jewel, and others. Discounters do work, they do attract customers. Aldi has just done it better than its forebears by eliminating transaction costs, and keeping overheads at a minimum.

The problem Coles and Woolies have is one of identity.

They are used to being all things to all people, and cannot conceive of a situation where consumers reject the idea. By eliminating proprietary brands, they are also eliminating one of the paths to differentiation and some level of intimacy with their customers, which will turn out to be a  bad mistake.

My view is that it is much harder now to develop a brand that builds and retains consumer loyalty than it has ever been, but then greater rewards will go to those who succeed. Those that do succeed will do so outside the ever decreasing  reach of the current retail gorillas, who will become increasingly challenged by both technology and new channels to the consumer.

 

7 Books every marketer should read.

7 Books every marketer should read.

Jul 13, 2018 | Change, Marketing

 

I am a voracious reader, have been all my life, all sorts of stuff from fiction, biographies, and books of ideas, to technical journals that challenge me to come to an even basic understanding. Perhaps it is because I am a bit of a dreamer, but also intensely curious, and reading feeds both.

As a management contractor and consultant, reading also gives me the foundation upon which to build the activities I recommend, sometimes implement, and write about incessantly on this blog.

However, there are a very few books that I go back to again and again, some that I read, remember, and refer to from time to time, some that get read and put aside as interesting, and many that do not get finished, as the message is simply not of the interest I assumed from the name, cover blurb and often the endorsements.

When asked which are the ‘go to’ books on the areas in which I practice, strategy, marketing, sales, and business improvement, it is a very small list. These few have added to both the width and depth of my thinking on my area of professional expertise. They are the standouts among a library of terrific books.

‘Influence: The psychology of persuasion’ by Robert Cialdini.

I first read this book probably 25 years ago, and have used the insights it offered ever since as a foundation for all my thinking related to marketing and selling. My current dog eared and scribbled on copy, probably the third or fourth I have had (I tend to lend them, but books are not boomerangs) is again on loan to someone I was trying to help.

 

‘Spin Selling’ by Neil Rackham’

Spin Selling is another oldie but goodie I first read over 20 years ago. There have been thousands of books written on all aspects of the sales process,  and while I have not read anything like all of them, none of those I have read goes even close to laying out the sales process as well as this one. Even in this digital age, nothing like the time when it was written, the principals remain, because they are about human behavior, not just creating a transaction.

 

‘The Goal’ by Eliyahu Goldratt.

The Goal is an unusual book, a text book written as a novel. I first came across it a very long time ago trying to get my head around making operational improvements in a ‘broken’ factory. The lessons in the book have subsequently become entrenched in the writings around the TPS, Lean and 6 Sigma improvement movements around the world.

It is not a marketing book, it is one that describes the improvement challenges in the manufacturing environment we see evolving in front of us, and the means by which those challenges can be met. As such, it is applicable to marketing, which should be as welcoming of continuous improvement as any other process. Besides, it is a good read!

Goldratt is a mathematician, and philosopher who first proposed the mathematical equations that now make up game theory, not a marketer. This makes, again, the point that great marketing always has a quantitative base, if you look hard enough to find it. .

 

‘Team of Teams’ Gen. Stanley McChrystal

I love this book, as it describes the manner in which General McChrystal turned the command and control culture of the US army on its head in the face of fierce opposition in Iraq that did not follow the ‘rules of war’ by which the US army had evolved. It was unthinkable that an apparently disorganised and leaderless bunch of terrorists (or freedom fighters, depending on your perspective) could, and did , render the overwhelming might of the US military redundant. This book provides a blueprint for every organisation to follow as it sets about reconfiguring its activities to meet the challenges of a fragmenting and information rich world.

A very useful addition is a follow up called “One Mission’ written by Chris Fussell, who was McChrystal’s offsider in Iraq, and collaborator in the writing of Team of Teams. It describes how the team of teams methodology has been translated into the world of business.

 

‘Playing to win’ by A.G. Lafley and Roger Martin.

This book builds on the work of Michael Porter, who wrote the seminal book on competitive strategy way back in 1980. There have been libraries written about strategy, how to develop, deploy, manage, and account for it, and some are very good, well known books of great value. None however come close to this book first published in 2013, for a practical and useable model by which to manage the complex strategic processes necessary for success. For me, this model goes hand in hand with Business Model Generation (below) which looks more specifically at designing a business model that will best deliver a strategy.  Both require iteration and deep analysis of your business, its objectives and competitive environment.

 

‘Business Model Generation’ by Alexander Osterwalder.

There has been a slew of offshoots from this book, which presented for the first time the idea of a  ‘Business Model Canvas’. This idea evolved from the work and writing of many scholars and practitioners, especially those involved in the ‘Lean Startup’ movement that evolved into the book of that name written by  Eric Ries.  The Business Model Canvas is  now a tool I use in virtually every strategy assignment as a means to visualise in a simple way all the key components of an effective business model. It is not just for startups, but for every business that is seeking to critically analyse their current and evolving business models, and that should be everyone.

 

‘Pre-Suasion’ by Robert Cialdini.

I bought this book on the basis of ‘Influence’ but quietly wondered what more Dr. Cialdini could possibly say that would add to the depth of his first masterpiece. It is a very recent book, published in late 2016, which I have just finished for the first of what will be many readings. The amazing thing is that so many of the ideas when written down make so much common sense, but I had never really considered them, most being just so ordinary as to escape notice.  This is potentially the most important marketing book of the last 20 years. As marketers struggle with the homogenisation of markets, and increasing challenges of building a brand in the face of customer and media fragmentation, the ideas in this book may make the vital difference between success and failure.

The challenge in compiling such a list is what you leave out. Amongst the piles of dross, there are some gems that deserve your attention. Simon Sineks ‘Start with Why’ upon which his seminal TED talk is based, Stephen Pinkers ‘How the mind Works’, Daniel Kahnemans ‘Thinking fast and Slow, and Ray Dalios ‘Principals’ are just a few.

I still prefer to read a physical book, or journal, in hand. I find it hard to write thoughts as they occur on a screen, and the physical connection is for me, an important element. My view is that so long as you remain curious, and feed the curiosity, you will uncover a few books which for you represent the list you recommend to others. This is just mine.

 

Happy reading!

Header: courtesy Jay Cross via Flikr

 

The ethical underpinning of strategy & marketing is being eroded.

The ethical underpinning of strategy & marketing is being eroded.

Jul 11, 2018 | Change, Governance, Leadership, Marketing

 

Marketing is about adding value, finding innovative ways to solve problems.  Sometimes marketers set out to ‘solve’ problems that around the BBQ would be termed a ‘1st world’ problem.

‘Which dog manicurist’ rates in my mind as such a problem, the subject of a conversation I was unfortunately involved in at a local dog park a few weeks ago.

However, sometimes extremes are pushed.

An extreme example perhaps, but the fiasco surrounding breastfeeding at the recent World Health Organisation meeting in Geneva convened in the belief that there was a consensus informed by science to be ratified, shines a light on the ethical challenges we face.

For some, mostly our wives and mothers,  it is a highly emotional question, to breastfeed or not, substituting formula for the real thing. It seems that the 1st world is returning to breastfeeding as the developing world turns to formula, believing it is a sign of maturity, sophistication, something to which they aspire.

To me the answer to breastfeed or not is blindingly obvious.

We evolved as mammals, breastmilk evolved with us, and is therefore uniquely suited to the nurture and development of a baby. The high jacking of breastfeeding by those flogging formula for profit is to my mind an unethical, indeed immoral act of marketing strategy.

Formula is terrific for those who for one reason or another, cannot feed. Back in the day the baby would have either died, or been passed on to  someone who could, a ‘wet-nurse’ for nourishment.

The sight of the WHO being managed by those with an agenda favouring formula for profit over the natural product appals me.

Where has our moral compass been hidden?

Locally, the marketing for profit before ethics brigade have taken over in the financial services industry, insurance, urban development, and a host of other sectors, and we are all the poorer for it.

Bit by bit the fabric of our communities is being ripped apart, the evolutionary power of Dunbar’s number thrown against the wall of technology as the power to communicate and collaborate erodes what made us human in the first place.

Somewhere, somehow we have to find the tipping point, and start to recognise that all that is new is not necessarily good.

 

 

The ‘Benjamin Button’ effect of digital

The ‘Benjamin Button’ effect of digital

Jul 9, 2018 | Change, Marketing, Strategy

 

In the film, Benjamin Button does not age, as those around him do, but he does accumulate the memories and knowledge around him as time passes.

Pretty cool, unless the love of your life is stuck in the present, whatever that is.

For years we have recognised the ‘Button Effect’  emerging with brands in the digital age, brands that leverage both sides of the human equation, the so called network effect.

The more it gets used, the more valuable it becomes.

Accountants and accounting standards are confused by this, as all assets depreciate with use.

Not any more!.

Digital products get more valuable with use.

That is why the monsters in the space, Google, Amazon, Apple and Facebook combined have the market capitalisation of all but the top few countries in the world at  around $2.5 trillion dollars US.

Staggering stuff.

What makes them so powerful, a position that has been reached in less than 20 years, replacing 100 years of industrial development around the world?

A very few factors seem common to them, and those coming up behind them, particularly the Chinese marketers, Tencent and Alibaba, along with Uber, Netflix, Spotify, and others.

  • They leverage the network effect, becoming the Benjamin Buttons of marketing , becoming more valuable with use
  • They are global, and their products cross cultural boundaries
  • They are in the lead at developing and deploying cutting edge technology, AI, AR, machine learning, whatever you choose to call it, these companies are leading the pack by leveraging behavioural data they collect with use of their platforms.
  • They seem to be inhabited and driven by ‘kids’ younger than my children. ‘Digital natives’ I guess would be the cliché, but none of the drivers of this revolution would be at the top of a 20th century industrial company, they would not have the experience to navigate the hierarchical structures that ran them.

You do not have to be a new age potentially global behemoth to leverage the network  effects available to you. Small businesses everywhere are becoming the Benjamin Buttons of their local markets, but the rules of engagement have changed. What worked for my generation is no longer enough, leveraging the network effects is now an essential ingredient of continuous renewal.

Credit: header photo from the film .