Many Australian businesses mistakenly believe that the lowest price always wins in tendering. But just like buying a house or a vehicle, government buyers and private organisations don’t always go for the cheapest—they choose the offer that delivers the most value.
Many Australian businesses mistakenly believe that the lowest price always wins in tendering. But just like buying a house or a vehicle, government buyers and private organisations don’t always go for the cheapest, they choose the offer that delivers the most value. In Australia’s competitive procurement landscape, winning tenders is less about being the cheapest and more about communicating clear, measurable value.
If your tender response looks like everyone else’s, price becomes your only differentiator. This guide explores how to present your financial, strategic, and personal value so your bid stands out, without undercutting your worth.
Why Price Isn’t Everything in Tendering
There is a view that you need to be the cheapest to win a tender. My response to that opinion is always the same. “When did you last buy a house? Did you buy the cheapest house you were shown?” Every person I’ve posed that question to so far has said “no." My next question: “did you spend more than you planned?” The answer usually comes back as, “yes.”
We stretch our budget, find a bit more money to buy that house that is just out of our reach because we recognise the extra value in that property. It’s easy to see because we are looking at a tangible object: bricks, tiles, kitchens, etc. Our mind assesses what we see compared to the other houses we’ve looked at and mentally calculates the extra value for the small increase in price. The extra value is personal: for some, it’s the chef’s kitchen. For others, it’s a better location.
The same applies in business procurement. Buyers don’t just want the cheapest, they want the best value. But unlike buying a house, where you can physically see the features, the value in a tender response is intangible, and most suppliers struggle to communicate it. It’s these suppliers whose offer ends up looking like everyone else's, meaning all they have left to compete on is price.
How do you present your value?
- A fair return or equivalent in goods, services, or money for something
- Relative worth, utility, or importance: precise significance
- Something intrinsically desirable
Value decisions
1. Financial
- Will your offer help us avoid costs?
- Will your offer help us increase revenue?
- Will your offer help us increase profitability?
Financial benefits should be articulated in monetary terms and be as precise as possible. For example, we anticipate you will save 30% or $54,000 in the first six months.
2. Strategic
- Will your offer increase our service quality?
- Will your offer shorten our product delivery?
- Will your offer provide us access to more markets?
- Will your offer enhance our business in some way?
Strategic benefits are less measurable but no less important. They should resonate with the buyer, which underlines the importance of knowing your prospect, and the questions you should ask them before submitting an offer in writing. For example, our product allows you to monitor your competition’s online activity in a way that’s never been possible.
3. Personal
- Do I like you and will I enjoy working with you?
- Does your offer excite me in some way?
- Will it make my life easier in some way?
- Does it align with my vision for the company?
- Does it offer me a way to gain more recognition or power within the company?
Personal benefits are subconsciously assessed and are specific to each individual. Therefore, it helps enormously if you understand the buyer and who will be on the evaluation panel. Then you can tap into their agendas and make your document “speak” to them.
The Value Equation in Tendering
To win tenders in Australia, you must think beyond the value you provide. You must also consider how the buyer perceives the costs of switching to your solution. So the value equation becomes:
Perceived Value = Total Benefits – Total Costs (real or perceived)
How do you measure costs?
1. Financial Costs
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Total cost of ownership
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Operational costs over time
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Hidden fees or charges
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Switching costs
2. Time Costs
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Implementation or onboarding time
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Training time for staff
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Project transition timelines
3. Personal Costs
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Implementation or onboarding time
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Training time for staff
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Project transition timelines
Tips to Present Value in Your Tender Response
To make your tender stand out across Australian local, state, and federal procurement, follow these value-driven tips:
- Use real metrics (e.g., "20% faster", "$100K savings")
- Tailor your message to each buyer’s objectives
- Address pain points specific to their industry or region
- Reinforce long-term gains, not just short-term costs
- De-risk the transition with testimonials or phased delivery plans
Final Thoughts
The more clearly you can present your value in a conversation, proposal and/or tender, the more likely you are to be able to name your price because your price becomes less important than the gains you represent. If you can’t compete on value, then you are forced to resort to competing on price.
If you are new to tenders or need to brush up on your tendering knowledge, be sure to download our Introduction to Tendering eBook. The eBook highlights details on how to respond to tenders and more.
