Try a little tenderness

• Josh Mehlman
• 19 August 2008
• Page 1 of 2 : single page

Photo credit: Anthony Geernaert

Hunt around on the web for Arthur Thompson and you’ll first come across Arthur Thompson the Scottish gangster, who used to nail people to the floor for defaulting on loan repayments. There’s Arthur A Thompson, author of a few dozen books on business strategy and Arthur Thompson who co-wrote The Brownie Guide Handbook. Another Arthur Thompson played 22 AFL games for Carlton between 1899 and 1901, kicking two goals.

Google’s clever search engine-y tech will also dig up scientist and author J Arthur Thomson (without a P), who is attributed the quote “the most powerful factors in the world are clear ideas in the minds of energetic men of good will”. Which brings us to how the Arthur Thompson in this story turned one clear idea into a successful business helping small companies crack big government contracts.

In Australia, any local, state or federal government contract over $100,000 must be put out to public tender and published in a newspaper or other ‘gazetted publication’. Each year, governments put out more than 40,000 tenders with a total value estimated at $80 billion.

The tender process is an essential component of open government which, in theory, stops those in power using taxpayer dollars to enrich their mates or cousins.

“It’s a system that’s been in place for a couple of hundred years now,” says Thompson. “It’s an open and transparent process that is very hard to replicate.”

Winning a government contract can be a substantial leg-up for a small business.

“To a big business, $100,000 for a three-year contract to clean a childcare centre, for example, might not sound like a lot of money,” Thompson explains. “But for someone starting up a small cleaning business, it’s fantastic.”

However, responding to a tender takes time and resources. The sooner a small business can find out about an upcoming tender, the more time it has to prepare. Which is where Thompson’s big idea came from.

Starting out

In 1983, Thompson was buying and selling second-hand word processing systems. He heard a local council in Melbourne was selling off a batch of word processors. The council advised him to watch the newspapers for a tender. After scouring the Melbourne papers for weeks, Thompson called the council. The tender, it turned out, had been advertised in the Ballarat Courier. Irritated, he looked around for a service which monitored all the newspapers for government tenders.

“I couldn’t find anybody who did it, so out of sheer frustration I thought I’d give it a try,” Thompson says. “So I decided to set up TenderSearch to offer that service.”

Thompson started TenderSearch with a friend who stayed with the company until his death in 2001. The company now has 25 staff and turns over millions of dollars a year. Roughly 80% of its customers are small businesses.

“It was a big leap of faith,” Thompson says. “Tender notification was new and tended to be fairly well accepted but of course it had its own challenges.”

One of the fledgling company’s early discoveries was that government tenders could be advertised in any of 600 newspapers across Australia. The agency putting out to tender could pick the cheapest newspaper to advertise in or the one most likely to be read by the advertiser’s cousin.

The progress of technology

When the business started in 1984, Thompson and his business partner manually transcribed tenders from newspapers and collated them into weekly bulletins, divided up by industries and locations – all tenders for cleaning services or all tenders in South Australia. Recognising customers needed more time to respond, Thompson upped the frequency to twice weekly.

“If we had a hundred subscribers, we’d print out a hundred copies of the bulletin, then we’d have to fold, stamp and post them,” he says. “When the fax machine arrived, it was a blessing because it meant we could transmit information instantly. And we welcomed email with open arms because we became much more instant.”

By the mid-1990s TenderSearch had embraced email wholeheartedly, even though most of its customers still relied on fax.

“We had [an application] written for us that would transmit the information on tender contracts to our clients via email,” Thompson explains. “As Australia embraced the technology, more and more information was made available online, so it became easier for us to identify opportunities. It’s still an onerous task. We have to comb through some 1400 government and semi-government websites, and 700 newspapers every day.”

Treating customers tenderly

TenderSearch also invested in technology to help build customer profiles and match incoming tenders to customers’ preferences, so they receive the most up-to-date and relevant information. Thompson firmly believes that however intelligent these systems are, they can never entirely replace human intelligence and a personal touch.

“A lot of people look for tenders based on keywords, but that approach is terribly unsuccessful in a lot of areas,” he says. “If you’re in the security industry, your obvious keyword will be ‘security’. However, a lot of tender documents require security deposits or security screening of staff. You might get a thousand tenders in your inbox for construction where they require a security deposit. Totally irrelevant stuff that doesn’t mean anything to you.

“We read each tender, interpret it and classify it. If it’s a little bit ambiguous, we phone and find out exactly what they’re looking for. That can’t be done by technology.

“Today is the technology age … but I think people also miss a bit of human interaction. That’s why we’re here on the phone when you ring. You don’t get a voice recorder; you get a person who can help you.”

Teaching tenderness

The glowing testimonials on TenderSearch’s website demonstrate the success of this approach in keeping customers happy. And Thompson is without question a smooth operator. When Nett asked about the customers whose comments didn’t make the website, he explained, “Usually people are unhappy with the process of tendering, not necessarily the service we provide. They may subscribe with us for a year and may not have won a tender. They think ‘well, I should have by now’. But winning government business is a medium to long-term process.”

Marketing textbooks and business gurus strongly advise new businesses to encourage customer feedback, even if it’s negative. Resolving complaints and listening to constructive criticism can give you more loyal customers and a stronger business.