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.
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.
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.
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.
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.
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)
Total cost of ownership
Operational costs over time
Hidden fees or charges
Switching costs
Implementation or onboarding time
Training time for staff
Project transition timelines
Implementation or onboarding time
Training time for staff
Project transition timelines
To make your tender stand out across Australian local, state, and federal procurement, follow these value-driven tips:
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.