Observations on Bidding for Telco Business
Working with suppliers and buyers of Telco platforms and services (and in a virtualised environment, the platform is increasingly delivered as a service), we have seen a trend for Telco RFPs to be vague on what their business needs are in the RFPs or ITTs. Although this can be a criticism of RFPs or ITTs in general, it does seem to us to be a more pronounced problem in the telco sector.
As a result, when we have been asked to review past bids and responses to explore why they were not successful, we see that suppliers have often fallen into the trap of trying to cover as much breadth in their service offer as possible in an attempt to maximise value - but failing to differentiate themselves from their competitors or to show insights relevant to the buyer that would make their solution compelling. The common bid response in the Telco sector is therefore more akin to a shotgun blast rather than to a rifle shot that precisely hits the target and wins.
In major Telco contracts, we have also observed buyers using the RFP like proxy market research – “let’s see how many things on our wish-list we can get”. In one extreme instance, a client, buying a platform for a new service, included a slew of “requirements” only relevant to an existing platform that ideally needed replacement. Effectively, the RFP was being used to see if they could get a “buy one, get one free” deal.
Sellers, clearly keen to win business and often adopting a “refuse to lose” strategy, respond in kind. They are “fully compatible” with the maximum number of features and, as my colleague Bob Wiesner highlighted in his blog, this approach doesn’t add value and rarely secures the win.
Instead, sellers should pause, review the situation and ask if they really understand what the client wants. We frequently hear that “businesses won’t talk to us once RFPs are out” or even that “everything we need is already in the RFP”.
Sellers should never pass up on an opportunity to ask for more information
Ideally prior to the RFP being issued or even after it has come out. At worse, you’ll be told “no” but our experience is that in many instances you will get extra information. In most cases the insights gained from that extra information will be extremely valuable and can make the difference between a win and a loss.
Asking questions always helps build a clearer understanding of the buyer’s strategic business objectives
Which are never about a new platform or having a more responsive outsourced management supplier. Business strategies are built on much bigger concerns, like increasing revenue, lowering costs or expanding market share. To uncover business key drivers and personal motivators through questioning takes probing skills and techniques that not everybody has, but all can learn.
Uncovering these key drivers, by delving deeper into the buyer’s thinking, enables sellers to move their responses from being merely compliant, or at best informative, to a point where they become persuasive and buyers start to think of the proposal as the right choice.
Following this approach, I’ve seen bids for national telecoms licences successfully re-crafted after the bidder recognised that the strategic objective was to re-establish a position of national leadership in mobile services and infrastructure – a key point, not explicit in the RFP simply because no-one wanted to publicise the view that national leadership had been lost in the first place!
Similarly, a platform vendor was able to achieve a major shift in customer opinion by affirmatively answering the simple question : “Can the sales force stand in front of existing customers and tell them this new platform is better than the one they’re very happy with now?”.
We see first-hand how clients following our approach to strategic bids can secure improved win rates, year-on-year and achieve this while increasing margins and profitability. As a start to supporting your own efforts to increase win rates, we’d be happy to give a no-cost point of view on a recent bid response, and then work with your organisation to explore possible ways of making your future bids significantly more compelling for buyers
- John Fletcher, Associate, Europe