A good friend of mine who works in IT said the other day, “if you’re hearing about a new tender through formal channels, you’ve already lost.”
There’s truth in that. A lot of us have been in scenarios where a contact or friend says, “Look we have to put it out for tender, but we really want to work with you guys.”
While all business-to-business (B2B) industries differ in their sales process, they share commonalities in how suppliers can quickly over-invest in potential new deals, tenders, and prospects that they were only invited to pitch for to make up the numbers. You can’t run a competitive pitch with only one competitor.
Our clients in the construction industry have to respond to tenders all the time, putting together long-winded RFP (request for proposal) submissions only to be trumped by a competitor with a friend on the inside who knew the client’s budget.
Creative pitches in advertising are still a big thing. Government or a big organisation put out an RFP and invite three or four creative agencies to put together a statement of capabilities, plus some “big ideas” about where they would take the campaign. After initial meetings, they go away and work late nights and weekends with most of the agency staff, neglecting valuable existing clients (who are paying the bills). They then meet again for a big pitch presentation where top agency heads channel their best “Don Draper” and try to inspire, excite and motivate the potential clients in the room that their firm is best. The presentation concludes, the agency team filters out grappling with a potent combination of excitement and exhaustion, and everyone hopes that they get the winning call.
Despite it being a widely recognised practice, I really think the above is a silly way to do business. I say that as someone who has been inside that system as an employee and who has been guilty of falling back into that trap as a business owner.
As a senior-level employee at my previous agency, I worked on and pitched for a huge national account. We were the incumbent agency and had worked with them for a few years prior. However, after hiring a few new key managers, they decided to take their entire marketing account out for tender. Alarm bells sounded. It was a great opportunity which could have set up our agency up for staggering growth. We knew their business, understood their customers and believed we were the best fit.
Despite having what we considered to be a good relationship, we wanted to prove it. The client had hundreds of stores across Australia, so to show them how much we cared about the opportunity and how willing we were to “go the extra mile” (1130 miles in fact), I flew down to Melbourne and drove three hours to that famous hub, Wongthaggi, to interview franchisees.
We worked late nights, public holidays and weekends, putting together a comprehensive pitch with two outstanding creative directions, one of which is very close to the brand strategy they’re running with today.
Safe to say it was all in vain. Their decision was made before asking us to pitch in the first place. The new key decision-makers had friends from a Sydney-based agency who probably had a “tap on the shoulder” prior to pitching.
I have no resentment over the experience; it was a hell of a challenge and opportunity.
It’s a real shame that Wongthaggi is east and not west of Melbourne, so that I could have at least driven one of Australia’s most famous scenic routes in the Great Ocean road on my way to missing out on a huge client.
History is doomed to repeat itself…
I made a similar mistake a few years back when I stupidly sunk close to $5,000 in labour and expenses bringing to life an idea in an attempt to wow a new prospect in a competitive pitch against three other firms. Ultimately we were trumped by a freelance designer they’d worked with before who just helped them execute an idea they’d pinched from a similar but American-based company. My fault! I should have learned from my experiences.
So what do I do differently?
- Get in the same room with the key decision makers and stress the importance of working together, not in silos to solve creative challenges.
- Charge upfront for any work created. No ideas should be given for free. When you have a great product or service, and confidence in how you deliver it, you should never have to discount it or give it out for free. There are great businesses willing to pay real money for expert advice and consulting and these businesses don’t expect you to give your time, energy and ideas for nothing. There needs to be a fair value exchange.
- Replace shiny presentations with crucial conversations. Uncover their real business challenges or objectives and discuss how we’re experts in addressing them, which is an idea inspired by one of my favourite business podcasts – 2Bobs, by David C. Baker and Blair Enns.
If you’re thinking, “I’m not in advertising and would never consider pitching for free, so how is this relevant?”
In response to that, how much time goes into your sales proposals? How many pages do you include before the one page that really matters, that one page that every client skips ahead to, to that one line (often bolded and underlined) that really matters? My advice would be to start with that page and section, make it simple and explain the value it or those numbers deliver back to the client. Since switching to one-page proposals at the end of last-year, I haven’t seen any drop in our conversions, nor have I had clients ask for more information. Our history, other clients we work with and testimonials are all information that exists on our website!
I understand that the pitching or tender process is an important process in a lot of industries, I just believe that it’s risky for businesses to over-invest in the pitching process without fair remuneration or access to the same level of information as the people they’re pitching against.
If you’re interested in learning about disrupting the pitch process, I highly recommend the two podcast episodes below as well as Blair Enns’ book – The Win Without Pitching Manifesto.