Top 5 Things Your Bidders Want You To Know

As a strategic sourcing software company, it is typically assumed that the buying community is our customer. However, in the last fifteen years, we at Scanmarket have come to believe that all the stakeholders in a negotiation need to be taken care of in order to assure a successful outcome. You can’t make a competitive market if no one’s willing to participate.

Monday, November 16, 2015
BY: Glenn Danielsen, Director of Sales

We have the privilege of interacting with bidders/suppliers every day. Whether it is managing events, conducting market surveys, or conducting trainings, we get to speak with suppliers in every industry and geography through our QuickCall support platform. Through these conversations, we hear frequently that:

  • They want to participate in your events
  • They want to compete fairly
  • They would prefer to cooperate than be adversarial
  • They understand you’re looking for savings
  • Above all, they want your business

One of the key tenets of negotiation theory is “know your counterpart”. To that end, when designing and conducting your event keep in mind these five things that your bidders want you to know:

  1. Let me know about the competition so that I can highlight my strengths
  2. Give me a very specific target to shoot at to get a better bid
  3. Tell me how you will make your decision so I can focus my efforts
  4. If you want creative solutions or just a quote, just let me know
  5. Be honest with me if you want me to be honest with you

 

1. Let me know about the competition so that I can highlight my strengths

Frequently, buyers want to believe that they are the only ones who understand the market. This is almost always wrong, especially if the category is an indirect one that is infrequently sourced and has limited category expertise within the buyer’s organization. Remember, your sellers are in this category all day, every day. They already know who the likely competitors are and the relative advantages of each.

Sharing information about the market can build goodwill even though you’re probably providing mostly information that the bidders already know. Depending on your negotiation strategy, you may choose to conduct an open conference call with the bidders to, for example, discuss specifications or your company goals. You can also use the many system feedback settings to communicate to bidders where they stand in the negotiation and how many other bidders are participating. This will not suit every situation, so weigh your options carefully and enlist an expert when needed.

 

2. Give me a very specific target to shoot at to get a better bid

The vast majority of our interactions with suppliers during the bidding process concern specifications. Suppliers are in the process of building their bids and are trying to win your business. In doing so, they want to make sure they are providing what you need at a margin that works for them.

To do so, they need to understand exactly what it is you want and need. While it requires more preparation effort before the event, it will definitely be in your long-term interest to build very detailed and clear specifications. Without a clear target, bidders need to build in “fudge room” to account for unforeseen requirements. Fudge room means inflated bids from suppliers and lower savings for you. Better specifications will also make your evaluation process simpler.

 

3. Tell me how you will make your decision so I can focus my efforts

There is a very fine line between disclosing too much and too little when it comes to communicating your decision criteria. Determining how much of your decision criteria to disclose is one of the most important choices you need to make in any significant-sized bid.


Do’s:

  • Acknowledge when you will be using non-price evaluation factors and what those factors will be
  • Provide the same information to all participants
  • Solicit alternative proposals when appropriate


Don’ts: 

  • Provide specific factor calculations for things like incumbency or quality
  • Communicate a specific savings target
  • Accept alternative proposals when you’re looking for a specific quote on a specific specification


4. If you want creative solutions or just a quote, just let me know

Not all categories or bids are created equal. There are times when you are trying to solve a complex business problem and times when you’re just looking to fulfill a need. Suppliers are usually happy to provide creative, complex proposals because it will give them an opportunity to deliver a differentiated bid that highlights their strengths relative to other bidders.

However, suppliers are busy people too and they don’t want to spend time developing a creative solution if you’re just looking for a quote. Be upfront with your bidders on what exactly you’re looking for. They will reward you by making your life easier when it comes to evaluation.


5. Be honest with me, if you want me to be honest with you

Make no mistake, at the end of the day this is still a negotiation. Suppliers want to know that you are conducting an open and fair competition. Frequently, suppliers are under the impression that a sourcing event is just a “fishing expedition” and the buyer has no intention of switching suppliers.

You set the rules, so it is incumbent upon you to ensure a level playing field. For eRFX or eAuction events, never invite a bidder with whom you’re not willing to do business under the right circumstances. If you conduct too many events where you’re not willing to switch, suppliers will stop participating.

By understanding what your bidders want and need, you will build better, more successful events that will generate value for you and keep bidders coming back.


For more information on these approaches or to learn more about how Scanmarket can help you achieve your business objectives, please visit us at www.scanmarket.com.

Scanmarket

Easy. Proven. Results.