The public procurement market isn’t exactly saturated with suppliers, but it is pretty crowded and competition is tough. Suppliers must have something that makes them stand out and differentiates them from their competitors. This unique value proposition must align with each government entity’s priorities – and here’s the kicker; those priorities are all different.
There are similar themes: functionality, brand, pricing, and customer service.
Suppliers must know which theme their potential purchaser prioritises. They must understand how the theme is wound into the tender requirements and align their business offering to cover both.
It sounds like a lot of work, and it is. But, in a market where services, products, and works are similar, a lot of work that wins contracts is better than losing out to competitors.
We’re going to look at how suppliers can differentiate themselves and optimise their unique value proposition to provide the value that buyers actually need.
Let’s start with:
Your Differentiation Strategy
Your differentiation strategy is a strategic choice that will put you head and shoulders above your competition. It starts with five types of differentiators that dictate everything that follows.
1) Product differentiation and unique value proposition
Product differentiation is about what makes your product/service truly unique. Think about product design, core features, quality, performance, and benefits.
Think deeply because this affects how you’ll position yourself in the market. For example, do you want to provide the most value for money, would you rather focus on your customer service, is it important for you to be a thought leader?
2) Brand differentiation
What is the first thing that comes to mind when customers think about your brand? Your commitment to social sustainability? The quirky advertising?
If it’s sustainability, embed it in everything. Make yourself the leading go-to company in your niche because if a decision comes down to the wire, your environmental and social value could be a competitive advantage that wins you the contract.
3) Price differentiation
Most companies focus on cost-only differentiators, but price differentiation also includes your payment options (weekly, monthly), discounts and incentives, and social conscience. What do we mean by social conscience?
- 10% of every purchase over £75 goes to the RSPCA.
- A tree is planted after every 75th purchase.
- For every package sold, a student at a disadvantaged school gets textbooks and stationery for a year.
4) Service differentiation
This is about customer relationships, for example, telephonic support, live chats on social media, and follow-up emails after online purchases. These could be ‘Thank you’ emails or ‘Rate our service’ or ‘20% off your next purchase’ emails.
Remember, your employees represent your company when they interact with customers or potential customers. They must have training in customer relations so they don’t cause offence.
5) Channel differentiation
These are distribution channels and delivery services. For instance, you only sell products online, you don’t have any bricks-and-mortar stores. You have an express delivery option but for an extra cost.
As you can see, you don’t need a significant differentiation. It can be simple, like your social conscience. The trick is to supersize it.
Your Brand Awareness Strategy
According to Youngme Moon, a Harvard professor and author of the book, Different, three types of (semi-risky) branding strategies stand out from the norm.
1) Reverse brands
Reverse brands don’t add bells and whistles to their products or services, but they do what they do very well. IKEA is a great example because nothing about the brand is flashy. It’s plain and simple; furniture that looks expensive but is affordable. And you have to put it together yourself.
This stripped-back service has made IKEA the biggest global furniture retailer.
2) Breakaway brands
Breakaway brands look at existing products and then step outside the box. Pop Tarts, for example. People love their sweet sweet cereal but don’t always have time to sit down and eat a bowl in the morning.
Pop a Pop Tart in the toaster and you can have your sugary sweetness on the way out the door. Cereal bars are also a good example of a reimagined bowl of cereal. Tasty, nutritious, and convenient.
3) Hostile brands
They sound ominous, but they aren’t really. They have a “what are you going to do about it” attitude which consumers actually love. Think about gas-guzzling SUVs vs. electric cars. Their selling point is that they aren’t the other guy. And, it suits their target markets perfectly.
Key Elements Of A Winning Public Sector Bid
There’s more to winning a bid than a differentiation strategy and writing a good proposal. Let’s look at some of those elements:
Research the buyer
The public sector is very picky when it comes to suppliers. They must be, there’s a lot at stake. Specifically, there’s a lot of money at stake and they must account for all of it. Suppliers must fully understand what they need and how it aligns with their objectives and values.
When you know that, you have a good foundation for a proposal carefully tailored to their requirements – and then a bit of extra value to seal the deal.
Bid/No-bid
Your research will also help you make a critical decision; will you bid on the contract? Make the decision early. You don’t want to dedicate time and resources to the proposal and then realise halfway through that it’s not the prize you thought it would be.
Consider:
- Does the contract play to your strengths?
- Do you have the capability to pull it off?
- Do you have the capacity and tools for the job?
- Identify the risks. Can your business withstand any of the risks if they come to pass?
Quality
You know you have high-quality products/services, but the buyer doesn’t and isn’t likely to take your word for it. Case studies are great practical examples of your work, but they rely on at least a little faith (they can be fudged or are not quite 100% accurate).
Certifications are fantastic because they show you meet quality assurance standards. ISO standards are particularly good. ISO is the International Organisation of Standardisation and it covers – everything.
ISO 9001 is the standard for quality management systems. It’s a good place to start.
Compliance requirements
We said government buyers have to be picky. Well, several rules, regulations, legislation, terms, and conditions help weed out suppliers that are perhaps taking a chance. Compliance can be voluntary or mandatory. However, it’s a good idea to be compliant, even if they are voluntary.
It’s an extra tick in the box and can make you stand out against other suppliers who have taken the voluntary bit seriously.
Compliance examples
The first one is a biggie. There’s nothing voluntary about it. The Procurement Act 2023 lays down the law for public procurement. Compliance here won’t make you stand out from the crowd, but non-compliance certainly will. It can also get you debarred, so make very sure that you understand it completely and adhere to the aspects relevant to you.
Sustainability is another biggie. All public sector bodies have sustainability targets for the UK’s commitment to Net Zero. The government has promised to hit Net Zero (zero carbon emissions) nationwide by 2050. Suppliers must do their bit by incorporating sustainability into their proposals. This is in addition to social value requirements.
Social value is divided into social, economic, and environmental categories. Suppliers must include an initiative that falls into one or more categories. They can be quite simple, like an apprenticeship programme to address unemployment. Or, they can be quite large, like rebuilding and modernising the public library. The initiative must be proportionate to the contract. You don’t have to redo the library if the contract is for cleaning materials at one of the local schools.
eSourcing Tools
eSourcing is the best way to publish procurement notices and send proposals in response. It’s so efficient that over 75% of businesses use eSourcing in their procurement processes.
eSourcing tools simplify procurement for all stakeholders, saving everyone time and money, and matching buyers and suppliers that are the best fit.
eSourcing platforms allow buyers to manage the tendering process on a central hub. All tender alerts, documents, interactions, notices, and templates are managed under buyers’ and suppliers’ profiles.
Some platforms, Delta eSourcing for one, offer several additional tools and services. For example, contract management for buyers and response management for suppliers. Analytics provides essential information on performance, future trends, patterns in demand, market conditions, risk management, etc.
Automation features help streamline the procurement process for both sides. Overall, eSourcing platforms are quick, efficient, and effective – and they can help ensure compliance with regulations.
Work Towards Long-Term Relationships With Buyers
Public procurement is never really about one contract. It’s about creating mutually beneficial, long-term buyer relationships.
We have established that the public sector is a competitive marketplace and you need to leverage any advantage you can get if you want to stand out. Good, reliable relationships with buyers are a serious advantage.
For example, getting to know a contracting authority through past proposals and networking events enables you to really understand them. You know their pain points and priorities and can tailor proposals to within an inch of their lives.
You also have a good network that is a valuable resource whenever you need news or information about the industry in general or when you have a specific question. It’s a great way to get word-of-mouth recommendations.
The thing to remember is that good relationships don’t form overnight. Some relationships might take years, but nurturing them throughout that time can bear beautiful fruit.
Find out more about what buyers look for in suppliers, how to get properly accredited, what certifications you should invest in, and what the Procurement Act 2023 means for you. Contact Delta eSourcing or register on our platform and you’ll have a Response Manager and Profile Manager available to guide you through the public procurement process.
