I wrote in an earlier blog that, whereas a formal tender will follow certain protocols, an informal tender will not. I touched on the point that this means that the buyer is not obliged to follow any particular course of action, allowing them much more flexibility. However, because there is much more flexibility, there is much less certainty about the course of events for the seller . As well as a lack of defined parameters there may be much less certainty about buying criteria.
This blog explores how there is also a potentially huge advantage for the seller. Sellers who are aware of these aspects can use them in their favour. Not only is the buyer not obliged to follow certain protocols, the seller isn’t either. They may, for example, take the opportunity to develop a relationship with the buyer, something that is definitely unlikely to be part of the formal tender process.
Developing a Relationship with the Buyer
The buyer may well be open to dialogue. In fact they may welcome it. After all, they are looking for anything that may help them get a better deal. They will know that, if they explore the requirements and possible solutions with a knowledgeable supplier, it may result in a better deal than they initially envisaged. In cases such as this it is important for the seller to establish their credentials early on in the process.
Offering Alternative Proposals
In a formal tender compliance with the tender requirements is paramount. Non-compliant tenders are often rejected immediately. With an informal tender this is not the case. By establishing a dialogue with the buyer it may well be possible to develop a specification for the solution that is more advantageous, and of greater value.
Pre-empt Competitors’ Submissions
By developing an advantageous solution this may effectively de-value your competitors’ submissions. If the solution is unique to you it may even result in the buyer suspending the tender process and awarding the contract to you.
Negotiating
By developing a relationship with the buyer you will be in a much better position to negotiate. By negotiating a better deal you not only achieve greater value for you, but also greater value for the buyer – increasing your chance of success.
So, in summary, if the process is informal, make sure that your use this to your advantage – and get to know the buyer!