WHY INCUMBENTS LOSE TENDERS
All things being equal (and given e.g. the incumbent’s previous performance, prior relationship with the customer, and knowledge of the customer environment, procedures and preferences etc), you would think that incumbents would have the advantage in tendering for ongoing contracts – and there is a saying around the tendering industry that non-incumbents need to undercut the incumbent by x% to stand a chance of shifting the customer from the current supplier).
However, incumbents can often be their own worst enemy and lose the re-tender through any one or more of a number of mistakes. Most often, those mistakes stem from over-confidence (“the tender is ours to lose”) or complacency and reliance on present performance on the contract, and an assumption that there is no need to present compelling reasons why they should re-win the contract.
Common mistakes include:
A forthcoming article will show how to avoid or overcome these mistakes and put in a compelling tender. If you have a tender coming up in the meantime, we can help.