Auctions V: Avoiding Reverse Auctions

This is the final instalment in our series. Thank you for sticking me through all this. I hope it's been worth it. Last time we discussed some ways or making the best out of the worst if you really need to participate in reverse auctions, notably in formal or sort-of-formal procurements, at least for the time being. Now I would like to take a look at what can be done to escape the reverse-auction misery. My translator friends claim I'm better at analysing the negatives than coming up with positives, but let's surprise them. Just please be prepared that there is no quick fix, no move of a wand kind of thing. It will take a lot of hard work, both mental effort and footwork, possibly some talent and some random factors commonly referred to as luck (luck doesn't exist).

Let's start simple. There's a short entry at Investopedia which will tell us exactly what we need to do:

It is important to note that reverse auction does not work for every good or service. Goods and services that can be provided by only a few sellers cannot be acquired by reverse auction. In other words, reverse auction works only when there are many sellers who offer similar goods and services.

Now, I wish to take issue with one thing: as long as there are still a few sellers (i.e. more than one), even rare goods can still be acquired by reverse auction as long as the buyer acts agressively and the sellers allow it to work. In other words, if the sellers — say, of some rare good or service that only 5 people in the world can provide and thousands need — allow a single buyer to round them all up in the buyer's conference room or online procurement system, that buyer can still have a reverse auction. And reap the benefits.

No matter than in the outside world there may be even thousands of eager buyers whereas the world's entire supply is completely represented in that small room. The buyer wins by just making things happen. The industrious buyer defies the laws of economy by redefining reality, by announcing new conditions to the buyers and their lack of defiance, or by taking a gamble and throwing bait and actually succeeding. And it costs the buyer nothing to try! There will not even be shame if the attempt doesn't work out.

On the other hand, a seller does not really need to be one-of-a-kind in order to get a stream of offers coming (just who would still be in business if that were true?). Just like industrious, proactive buyers certainly aren't one-of-a-kind in what they can offer. In fact, most of what they can offer are numbers, i.e. the price they can pay (per-unit or total). In translation, obviously jobs aren't actually unique, either. The demand is huge. It's just that a lot of companies who have those jobs to hand out are determined to sell them dearly.

So, in order to escape reverse auctions your offer must be unique. But definitely not absolutely one-of-a-kind. You can afford to be less unique when your potential buyers (i.e. potential clients) are not artificially unique — for example by just acting as if they were unique and you letting them, or by actually being unique in your pool of potential clients (because you don't get much exposure and your reach is limited).

Your potential clients shouldn't be more unique than they ought to be. Treating them individually and offering them personal or personalised service — and especially giving their texts all the individual attention they deserve — is not the same as caving in to unreasonable demands or accepting unreasonable demands and agreeing to be put in a position in which you can actually afford not to be put. And it's not just about money. For example, if they are rude (which is a noticeable trend in our 'industry'), you can always take a pay cut and work for someone who can't pay as much but is at least polite. Just because they ask, suggest, propose or 'require' doesn't mean you automatically need to do it. As long as you've made no promises yet.

However, obviously, the more choices you are, the more selective you can afford to be. And, the number of choices you have will depend on how many potential clients actually know about your existence and the services you offer. We'll return to this in a moment.

There is also a progressive scale. This is not a game of absolutes. Becoming a little more unique will net you a little better offers, being somewhat unique will get you somewhat better offers, and — obviously — being totally unique will get you totally better offers. So it's not all or nothing, the return grows with effort. Thus, small steps will also pay, although without making a dramatic difference in a short time-frame.

Here are some areas in which you can become more unique (i.e. differentiate yourself):

• substantive personal qualifications (degrees, certificates, experience etc.), which put your translations on a higher level than the buyer can normally hope to find
• soft skills and your other personal assets, which affects how good a fit you are
• types and definitions of the services you offer, and the way you perform them, including any added services, convenient (or not) service plans and such like
• client service (e.g. fast response, courtesy, personal approach, pampering, subservience), which is either about connecting with your clients or pleasing them
• just being where nobody else is (for example an industry conference or business chamber)
• missions, ideas, stories a.k.a. the why

The ways of becoming unique typically involve research and writing, whether on your own or with professional assistance.

There are basically two things you can do here:

• adjust your business model (decide how you do things)
• design, manage and publicise your brand (manage your image)

In a simplistic illustration, your work is the substance, your business model is the form, and your branding is the packaging. Let's take chocolate as an example. It's chocolate all right, as in the substance — some cocoa powder, milk, whatever they put in the mix, perhaps some nuts and raisins or some other stuffing to make it nicer and more attractive (and in many cases also unique). It needs to be sold in bars of various shapes or as pralines or sweets (candies) of some kind. Finally, you need to wap it in some nice paper or foil or put it in a pretty box.

If you don't, it will be difficult to sell even if it's really good chocolate. Achieving good prices would be even more difficult. Chances are the excellent chocolate would still end up being sold in bulk, i.e. stock quantities, perhaps for cooking, instead of e.g. serving as a unique gift to make a child happy on its birthday.

So, you need substance or there's going to be nothing to sell (only advertising agencies can sell ads). You need the form, too, or you won't be able to get the substance to be where you want it to be (as opposed to all over the place). And you need the packaging if you aren't selling it bulk, in stock quantities. And bulk sale or stock sale is not just about the volume, it's a type of sale rather.

Moreover, if you sell the chocolate in a transparent wrap — which is not actually a bad idea — then the chocolate itself takes over the role of the wrap and provides the visual attraction. And transparent wrap is still wrap anyway. The chocolate surface does not touch the shelf surface, or the chocolate would catch germs and the shelf would get stains and germs.

In short, you need to get some presence (exposure). You need to offer value to be paid, but you need exposure to even have a chance.

Develop and flesh out your offer. Identify your strengths, use them, communicate them. Do it in the right language — at least language which your client will understand but normally the language the client actually speaks in the client's own business should be better. Identify your weaknesses and either fix them or work around them and rely on your strengths instead. Identify opportunities and try to chase them, see if it works. In many cases it doesn't hurt much if it doesn't (gotta get over the fear of disappointment and rejection).

Just be there. Say something about yourself. Something which is relevant and something which is also understood. Better still (with time, perhaps), something which will translate into what your client gets from you, rather than what you need to sell. Perhaps it might be worth spelling out what the client gets from you as opposed to some other people, machine translation, or unprofessional inhouse effort — just don't concentrate too much on aggressive comparisons and negatives, as that will put you right back in the reverse-auction model.

You can probably even write a dedicated and explicit Why me page, nailing and detailing your unique propositions but remember you're writing it to get out of the reverse aution world, not to hop right back in. For example, some time earlier in this post I mentioned subservience, which is not rare in the translation world. Don't do it, it will only reinforce the buyer control and entitlement. At this point you're actually unique if you don't. Those who do profess their total subservience to the client possibly don't even benefit from it any more because of how commonplace that style has become. You need to be indispensable and very significant to your client, not expendable and insignificant. (As much as calling yourself the business partner of a Fortune 500 company would be a bit over the top.)

Think about what makes you unique. Low prices don't, not even lower than everybody else's — for now. Meeting project deadlines doesn't really. Using CAT tools (cutting edge technology, yeah, right) doesn't either. Handling secretarial work or running office and administrative errands for your client certainly does not — it's more like the wrong kind of added value, whereby translators become personal office assistants, a task for which they are overqualified. Plus, don't overemphasise added value or your core value will be overlooked and disregarded. You need first of all to make a strong case for the core value you provide to your client. Added value is added value, not mandatory or essential or indispensable or core value. Mention the added stuff anyway because it would a bit silly not to benefit from all the advantages of your offer, but don't do that in ways which undermine your professional status.

Still, as it's more about the client than it is about you (unfortunately), you'll need to show the client that you understand the client's needs, and that you care. There's a marketing saying that before you sell the solution you need to sell the problem. There's a grain of truth in that, but it might be better to talk about opportunities than about problems. Or perhaps both problems and opportunities.

This may end up requiring you to do more selling than you fell comfortable with, but it really is not the same as the client-centred or even client-centric mumbo jumbo which makes translation clients feel like the own agencies and translators body and soul, which then rubs off on rogue agencies which go over to the dark side. Remember: You own me, and I am your slave. I live to do your bidding and be your whipping boy, and I'm enthusiastic about it is not unique. It is commonplace. It's all over the place, in fact. You're actually unique if you don't think and communicate that way, although it may seem harder to compete (except your goal is not to outcompete everybody else but to make competition irrelevant).

First step is just doing it. Or even actually wanting to do it.

This first step is probably really the most difficult one to make. It is always difficult to just start doing things, unless perhaps you are the sort of go-getter born to just be doing things. Such people, however, are a minority, and most of us are not Alexanders or Caesars or even the general we saw on the TV. Fact: most soldiers are not commanders ;).

If you want to make the first step toward adjusting your business model and developing a more efficient way of handling your online image — and the beginning always comes down to just wanting to do something — then perhaps see these two presentations first. They are free to watch, and take about 2 hours each:

• Doing business with translation clients, by Marta Stelmaszak
• Translation branding & identity, by Valeria Aliperta

(Both @ Traduemprende, 24 May 2013.)

Books were written to facilitate freelance stats and introduce translators to some useful basics of business and marketing knowledge. They may contain a lot of basic stuff that any practising freelance translator already knows, so look at the list of contents first, but they generally come with useful tips:

• The Entrepreneurial Linguist. The Business-School Approach to Freelance Translation, by Judy A. Jenner and Dagmar V. Jenner
• The Prosperous Translator. Advice from Fire Ant and Worker Bee, by Chris Durban
• How to Succeed as a Freelance Translator, and Thoughts on Translation, by Corinne McKay
• Marta Stelmaszak is working on Business Checklist Book for Translators

Especially if you're new to freelance translation, take a day off and read. Perhaps read more than one book and compare those parts where different authors offer different points of view, to see why they the way they do and get a clearer perspective for yourself.

All of the people I mentioned above have blogs where they share useful insights, such as Corinne McKay's blog from which the material for Thoughts on Translation came, Marta Stelmaszak's numbered lessons or even a couple of useful tips periodically published on Latitudes. Proz.com's own blog keeps a list of other translation blogs, about twenty in all. A lot of them deal with business and marketing matters rather than chit chat and translation riddles or forecasts about the future of translation.

It should be worth looking at industry-specific business and marketing blogs relating to your clients' industries, or the field-specific marketing of other professions, especially those which are similar to our own. For example legal marketing has become a strong discipline by now, largely because of the tough competition in the world of legal services but also stringent rules on advertising, which are intended to keep it ethical and keep their status high. In short, they are another profession for the services of which demand is practically endless but few people actually want to pay the sort of prices which really make the professionals happy. Which is just like the current situation in our own 'industry' with its raging price compression.

Thus, for example you can look at the Lawyerist's marketing tab, Tom Kane's Legal Marketing Blog to name just two that come to my mind easily. However, as I said before, it's a good idea to look at business and marketing blogs relating to the subject-matter you translate, be it health care, finance, engineering, design, whatever it is in your specific case.

If you'd feel more comfortable having some expert assistance instead of researching and doing things totally on your own, then Marta Stelmaszak @ WantWords teaches Business School for Translators, and Nicole Y. Adams @ NYA Communications offers Translator Consulting Packages. Other popular authors and bloggers also may be available for consultation. Websites for Translators can take care of your website, logo and business card. Just to name a few of the more popular ones.

Recap

Be unique. To be unique, you need to be. So have a presence and exposure, preferably somewhere where competition is more limited. Try to make competition irrelevant rather than outcompeting the other guys (or it'll end up in an auction). Treat your clients uniquely and appreciate the ways in which they and especially their needs are unique, but don't allow them to act like they're more unique than they are and dictate terms to you monopolist-style if you have other potential clients to choose from. Try to avoid competing in ways which make you just like the other people, rather attempt to find or create niches. Think about getting professional business and marketing assistance — you've seen what happens when our clients translate on their own.

Good luck! (And yeah, luck doesn't exist.)

Auctions IV: How to Survive Better

In parts 1-3 of this series we established that a setting based on reverse-auction mechanics — where the buyer essentially controls the setting, all the more so if an RFP is involved — is not optimal for you as a freelance professional. It harms your interest by not just simply reducing your profit but rather making sure that profit is basically only for the buyer to make. Reverse auctions and especially RFP-driven procedures subject you to tedious bureaucratic marathons with no certainty of the outcome. They give all power to the buyer and have some serious potential to commoditise your work and encourage buyers to act in self-centred or irresponsible ways (waste your time, most notably).

But we also noted that it isn't really possible to avoid an auction mechanic in a real-life market where competition exists. If your competitors are not currently sitting at the negotiation table during your conversation with your potential client, then they are certainly just behind the corner or at least in some more distant background. Their offers affect how much you can expect to charge or even what you need to do and how if you want to find clients.

We have nailed down primary problems with reverse auctions (including RFP's):

• buyer controlled environment (and we could finish here)
• driving prices into ground, up to the point even winners may stand to lose
• huge loss of time and little in the way of compensation even if you win
• mental exhaustion and negative emotions
• no opportunity to shine, be unique, profit from exceeding the requirements
• difficulty winning when you aren't the lowest bidder
• uncertainty even when you are
• promotion of irresponsible behaviours and ignorance

Now let's look for some basic solutions:

• First and forement – you can say no! This may sound a little silly on my part, but just because you've received an RFP doesn't mean you must submit a proposal.
• See how much the deal really pays if you win, and what the return of your investment be (including the costs of preparing the RFP and maintaining your participation throughout the entire procedure). Don't compete just for the hope and satisfaction of winning. Pick your battles, fight for meaningful targets. You have a war to win, not battles to chase.
• Assess your costs of participation and your chance of winning before you commit. Don't overcommit, e.g. don't spend too much time analysing where a rough estimate will do. Overanalysing is a huge part of what's wrong with the RFP-driven regime in the first place. You may want to put together a stable list of criteria and clues if you end up doing this often.
• Know more or less how much you can possibly earn if you commit your time and other resources to something else than answering RFPs. If the alternative is better, forget the RFP. Resist the lure of chasing and winning them.
• Before you even have an RFP on your table decide what chance of winning you're comfortable with, and what your comfort zones and bottomlines beforehand, too. You can use the Proz.com rates calculator to get a rough idea. Make sure you know that and why you can't go below to avoid indecision when you are tempted.
• Just like in gambling, don't get hooked. Know when to quit, and quit when you know it's time.
• Keep track of the time and other resources you spend answering RFP's. Adjust your estimates and your future decisions accordingly.
• Be efficient. Automatise what you can, use cheat sheets, scripts, templates etc. Don't use over– or underqualified staff. Don't lose track of time perfecting irrelevant details. Ask a veteran for some tips.
• If you already need to provide any diplomas, certificates, referrals and such like, you may as well pick up all the leftovers in order to maximise your impact while at it.
• Search online (e.g. the Proz.com BlueBoard) and talk to people to learn whatever information is legal for you to get and relevant (just don't overdo it time-wise). Important details include any history of non-paying or otherwise being difficult.
• Give your response a unique touch, just learn how to do it in a time-efficient way. Even canned responses when done right can be thoughtful and considerate and engaging and invoke good emotions in people.
• Practice saying no. Preferably in a courteous, creative and engaging way, preferably an offer to do something else which has value for both you and your potential client, e.g. a paid-for but high-quality case evaluation. For example read Jonathan Wold's article at Smashing Magazine (Stop Writing Project Proposals, 17 February 2012), Alice Hendricks's at Jackson River (Why I Hate Your RFP), and you can probably find some more. Or just decline courteously but confidently, they may still contact you anyway, regarding the same or some other contract.
• Read the whole RFPs carefully before you start preparing the response, as you don't want to invest time before discovering that you aren't eligible, after all. Stay vigilant and mindful and then double check your response before sending, run it through a second pair of eyes. You don't want to lose or be eliminated on a technicality after investing your time and effort, asking other people to send you documents if you're fielding a team, and so on.
• Watch the buyer's act. See if the buyer is a reasonable sort. See what you can expect.

Injecting the opportunity to shine

It may be an uphill battle but also a rewarding and intellectually fulfilling task. Be resourceful and maximise the usefulness of whatever channels and space you still have left within the tight constraints of RFP response. Concise, clear and engaging writing would be ideal.

It won't always be possible to shake off buyer control, but in more informal settings (e.g. RFP-like rather than strict RFP) a well-landed tactical blow can change the rules of the engagement.

Make use of what NLP wizards call reframing, i.e. force the buyer to think outside the box, look at other perspectives, expose the dangers of the buyer's presumed safe position. Think of ways of putting the ball in the buyer's court or providing incentive to reach out to you more.

Don't be too subservient, it's hard to project professional confidence or authority from one's knees.

Don't overcommit your writing time, but it won't hurt if you can still stress the unique, individual character of your services.

Explaining why you won't play the game – a fight for a better future.

If a sufficient number of people refused to play the game and said why, somebody would change the change or some of its rules and others would eventually begin to follow the lead. It's actually in buyers' needs to attract reliable sellers, and some of the people who devise the hoops are still nice people who just simply can't see things too clearly from your perspective, but they possibly would if they could. So give them a chance.

If you decline to participate or especially withdraw after already submitting a response, make sure you state the reason why, in polite and constructive terms. Be very professional, courteous and perhaps uplifting but not flattering, brief but not short, concise and up to point, confident but humble. If you do it this way, your message will have more chance of influencing the buyer (or a sensible professional advisor the buyer may have).

Use language familiar to the buyer to explain why some things don't make business sense from your perspective (e.g. why you would be taking a loss because the costs of preparing a response would exceed the profit margin on a small job).

And remember what we discussed above about making a no more of an opportunity to try something different, better. If not, at least encourage the buyer to get back in touch with you some other time, e.g. when there's no tender or when the budget is more in line with your rates.

This has a much higher chance of working out in informal inquiries and recruitments than it does in formal RFP-driven procurements.

Don't burn your bridges, don't close your doors.

Regimes change, as do the people who call the shots. Those who don't, but like you, find work in different companies, talk to you about their new bosses or friends, or they are the boss who calls the shots now. So don't alienate people, especially those who aren't responsible for the RFP misery (e.g. it wasn't their idea or they had their hand forced).

Perhaps even actually write your proposals and other communication with such next times and collateral referrals and other surprises in mind, just like you always carry business cards (or should). As a minimum, you will have made some people know you exist (including your competitor, who may be larger than you are and themselves looking for a reliable subcontractor). Before, they didn't.

Mental exhaustion

As a freelance professional you need to take this factor in consideration. Don't push yourself too hard, or you will slip, errors will come in, you will lose reputation and incur liability. Try to alleviate the RFP misery by changing something in your approach, making sure you take breaks and don't forget your basic needs while jumping through the hoops. Definitely consider this also — and especially — when you declare any sort of guaranteed capacity. Speaking of which:

Guaranteed capacity, other deadlines and guarantees, other parameters

You'd better have it clear in writing whether the capacity you are declaring is your theoretical daily minimum, average or maximum or some sort of turnover you are effectively booking for the RFP'er — or for the company responding to the RFP if you're that company's subcontractor. Rigid unpaid bookings that you can't cancel are a very serious matter and you should really know what you're doing before you sign such a thing (though I can't personally don't think it's a good idea anyway).

Check any and all other guarantees you're expected to make. Any representations, statements and declarations requiring your signature. Any other parameters requested on you. Remember that RFP-driven procurements are not friendly settings to you, they often deal in bulk quantities, and the conditions are stiffer than in normal translation work. So inspect everything carefully.

Check all the contracts and commitments carefully anyway

Check the contracts, commitments and understandings and anything else you do or will need to sign in connection with the procedure. Contracts are too long a subject to discuss here — bad contracts in the translation 'industry' are a bottomless sack. If the contract is unfair, demeaning, puts you in a really awkward position or heaps risks on you — stay on the safe side. If you don't understand, then certainly don't sign.

Rose Newell and I talked about contracts a little in late January, you may be interested in taking a look (Zombie contracts: Translator's beware, Lingocode, 31 January 2014).

As a subcontractor for someone else, clarify your position and require clear communication

… Make sure that the company above you relays to you all of its client's requirements and all of the relevant communication, that it can and will ask relevant questions and pass answers to you. Clarify your position — e.g. whether the company will expect you to 'inherit' its obligations to its client or just simply hand in your job like normal. Watch out for poor quality sources or highly technical and complicated sources with tight deadlines. Remember that a job originating with an RFP has probably been optimised to turn in as much value as possible for as little pay as possible (value to price ratio for the client), which means that your financial return for the time invested is probably going to be passable at best.

Don't mistake rigidity and lack of willingness to talk to you for legal requirements

Don't mistake an our way or the highway approach for a strict procurement regime. Don't presume that some sort of unchangeable law is responsible when an agency or direct client can't do this or that or invokes our policy, declines to negotiate the contract, imposes unreasonable requirements and piles formalities on you and just won't budge. That's not the same a government spender who is legally locked up in a very strict formal procurement regime. If they don't want to talk about your relationship and work out somewhat agreeable terms, then they probably aren't the kind of people you'd like to work for if you can avoid it.

Know your position and assess how much buyers effectively need to compete for you

Like I said in Part 1, on the example of Proz.com job posting FAQ, people who run informal auctions and auction-like recruitments need to face the following dilemma:

maximising their benefit vs making their job still attractive

This is because those sellers — in our case: translators — who can afford to choose probably will. Almost everybody can afford to choose jobs within some margin. If you sometimes have more inquiries than you could handle, then you probably can afford to choose — which is to say even if you can't just go ahead and raise your rates you can at least choose which inquiries to give priority. Likely the ones chose are the most profitable or the most interesting or those from people you owe some favours.

Do your maths and hold job posters and inquirers to what standards and requirements you can afford to hold them to. Recalculate any exotic rates and deadlines into something more manageable, then compare with other offers (don't exempt them from the comparison). Include the time consumed by any special requests or requirements, such as a lot of material to read before you start translating or your participation in any quality assurance procedures, explanations and reports and cheklists and so on. If the client requests an outright financial discount, just recalculate how profitable the job is now, comparing the effective rate and not the nominal rate it was before the discount.

Bottomline: While you can't really run an auction to select the highest bidder to offer your services to, you can still compare alternative options and choose the best, without subjecting your potential clients to a bidding process.

Last year on Proz.com I wrote an article suggesting that job posters need to compete for translators too (Competing... for the translator?, 30 August 2013) and a follow up illustrating some possible job selection criteria (Competing for the translator. Follow-up: How I choose jobs, 11 September 2013).

The silver lining

While somewhat depressing to participate in, formal procurements from governments and public spenders, especially if the procedure is public and taking credit would not violate the NDA, can lead to some serious references and documented experience. Those, in turn, can be used to raise your profile and make your position stronger. Plus, while the pay may be poor, at least the flow is likely to be steady, which is not bad for any translator who faces some difficulties finding enough work. Which doesn't normally make the hoops and the bad pay worth it, but there may be some rare exceptions. Private procurements (e.g. from corporations) are likely to involve better pay and be more flexible, otherwise it's similar.

Afterward of IV, foreword of V

In the last instalment, I'll try to give you an upportunity to look at doing something better than just surviving, with a mind to avoid the RFP game totally and restrict the impact auction mechanics have on you.

Auctions III: The Black Hole of RFPs

This is Part 3 of our series about auctions. This one is probably viable as a stand-alone article, but you'll benefit more if you read the previous parts first (I: Auction or Reverse Auction. Introduction to Auctions; II: Reverse-Auction Setting Is not Optimal for You). The most important thing to find there is that reverse auctions are not designed with your benefit or a mutual benefit in mind. They are designed solely with the buyer's profit in mind, and profit pursued even in self-destructive ways.

If you represent a translation agency please do not presume I'm some sort of a fierce freelance warrior on a crusade against you and yours. On the contrary, if you work at a small or medium agency, you'll likely benefit from this text than most freelance translators will.

Let's start off with some quotations to set the scene, and it won't be pretty:

By doing RFP work, you’re running on a hamster wheel instead of building value.[John Warrilow, Death by RFP: 7 Reasons Not To Respond, Inc. 2013; for more hamster wheel see J. Warrilow, RIP to RFPs: Why You Should Stop Chasing Bids for Business, 26 August 2010]

Recently a member of the LawMarketing Listserv asked how her firm could get more RFPs for legal work from corporations. My reaction was, "why would you want to go to Hell?"[Larry Bodine, Why go to RFP Hell?, 24 December 2005]

Law and business bloggers are sometimes witty people and imaginative writers, but they don't use that type of language every day! If I wanted to quote all of their memorable juicy lines (especially Bodine's), I'd need to copy their entire articles over. There's apparently enough disappointment out there that people no longer make an attempt to hide it. Tom Kane stays remarkably temperate and patient but still notes, in an article titled Avoid Client RFPs, that:

You shouldn’t have to compete in this manner, if you are doing your attorney-client overall job properly. [Legal Marketing Blog.com, 2 November 2012]

So it's basically client acquisition failure if a lawyer needs to rely on answering RFP's. Let's take another quote, from Larry Bodine's article, describing a large bid for legal services held by a global corporation. Do note that legal services and the various brands of translation and interpreting or similar services are among the closest-resembling professional fields.

Everyone was so nervous that they didn't touch anything on the food table.

And that's it, you may ask? Now, he's talking about a ball room full of lawyers from 103 firms feeling soft in their knees! You wouldn't think those firms sent rookie associates there, right? Something of that calibre requires people with serious job titles and names that ring a bell. To leave no doubt, we're talking here about a number at least in the low hundreds of experienced, powerful legal eagles and sharks being made so nervous they can't get the food down, a couple dozen of them probably legal stars. If they acted together, there'd be a full batallion of them there. Possibly a company of partners.

At any rate, Bodine's rounding-out thought is that:

an RFP is an invitation to put your head into a noose and go through the client's procurement system. (We usually talk about hoops and jumping through hoops among translators.)

RFP regime promotes useless bureaucracy and spoils your potential clients. People's personalities vary and there are also some who simply can't help spawning those long tracts of bureaucratic requirements if your don't keep their full optimisation tendencies under control. Bureaucracy rarely optimises anything, anyway, and the reality is that it resembles writing a letter to Santa. Given, however, the advantage strength and leverage typically enjoyed by an RFP'er, few people will have what it takes to cry out that the emperor is naked. Or, in some cases, even an unwitting emperor is sometimes compelled by legislation handed down by someone else, someone who just might have been playing armchair general.

Speaking of clothes, anyway, at Versa Studio's, they call it laundry list, noting that:

Respondents must laboriously address each item, even when it's inappropriate for the client, for their response to be complete. [5 reasons why RFPs are a bad idea]

If you have any serious experience with the recruitment and procurement procedures of the translation 'industry', then you must have noticed, by now, how out-of-place some of those things are, sometimes displaying a markedly clear lack of understanding of what translation is about. And sometimes even a lack of understanding of business considerations.

For the record, I didn't go to business school, but I went to law school and I can tell you that one just can't make magic happen by handing down a decree and expecting that life will conform. May I recommend the story of Cnut the Great trying to command the waves back in 11th century.

Due to the increasing power to dream and decreasing need too keep it real:

RFP customers no longer need to have any particular industry knowledge or business smarts or even to exercise their common sense. A lack of knowledge about the details of a specific industry is not a problem in a company which only rarely has to procure any goods or services relating to that industry. Missing business skills are more of a problem, though sometimes businesses can function relatively well without them. However, it's quite onerous when ideas that just don't work get formalised and become the letter of the rules you're going to live by.

Smart people — and smart organisations — know their limitations and ask for assistance from consultants and other specialists when they need it. Those had better not exclusively be procurement consultants, though.

Even in a successful and thus presumably business-smart company (or how else would they be getting results?), the procurement apparatus may be totally disconnected from the recipients or users of your translations, such as project teams, client-care specialists and marketing departments. The failure of imagination to see problems occasioned by this disconnection is astonishing in the light of how far some companies' imagination can stretch when inventing hoops for you to jump.

(For the record, the hoops may be designed by lawyers who are so obsessed with protecting and enforcing their clients' interests that they fail to realise that it takes two to tango and the client's terms still need to be agreeable to a fellow human being for this to work.)

What is worse is that the commoditised procurement model has the potential to make even professional, industry-specific companies take after consumers and behave accordingly. In which connection:

RFP customers no longer need to be responsible or friendly or respect your time. Many RFP'ers will cancel the whole thing some time into it, impose additional requirements without prior warning, even sometimes cut the budget down, or perhaps — after receiving your translation — ask a myriad questions and complain about some perceived non-conformities. Since they no longer really need to have a strong idea of what they are talking about.

In an environment controlled by an undisciplined buyer who combines the privileges of a sophisticated customer with those of a consumer you stand to waste a lot of your time, and possibly your sanity.

Plus, especially when the recruitment or procurement is not a strictly regulated RFP-driven procedure, the client can merely be price-shopping or conducting general vendor research to begin with.

Make no mistake, RFP's are a huge waste of time and resources (Avi Dan from Forbes explains why, from a marketing client's perspective, Why The RFP Is A Waste Of Time, 19 February 2014), and the costs of that Byzantine bureaucracy are paid from the same budget where your pay comes from, which is another cause — apart from the effect of competitive bidding — why that pay is so low.

To be clear, RFP clients are acting in their own interest, not yours, and they won't feel a need to use it judiciously or sparingly, since, according to their understanding, the whole system focuses on them. And they got that part right. In their mind, you are participating because you chose to, and volenti non fit iniuria — a consenting party is not being wronged. If you didn't want to be part of their RFP procedure, then you wouldn't be — right?

Your own benefit from participating in the RFP-driven procedure is supposed to be the chance — to be assessed by you yourself and consequently either braved or not — of winning their contract and earning its price, of which the profitability to you is something else up to you to decide on your own. Your concerns and the welfare of your business are not the buyer's concern.

Take a look at Jonathan Wold's story at Smashing Magazine (Stop Writing Project Proposals, 17 February 2012). Now take a look at the lovely comic at Bart Aalberts's (Pitches can be Bitches). While RFP'ing actually can in some cases lead to relationships, and some procurements for long-term services seem to have some such thing in mind (e.g. 20-year warranty obligations by necessity impose some sort of relationship, however stiff and formalistic it can be), RFP'ing is basically the essence of 1) an arm's length setting — where both parties theoretically work for their respective maximum benefit, except the bidder is not quite in position to — and 2) which is totally buyer-centric by design and by definition.

Even informal RFP-like settings concentrate on meeting the buyer's buying needs, not your selling needs. In other words, it's about what the buyer wants to get, not what you offer or want to offer or can offer, or anything else to do with you. And, for the record, yes, needs are not the same as wants. Strict RFP'ing does gimp the buyer by restricting incoming information about what the buyer could benefit from doing differently. Logically, people who need experts are not normally capable of making the optimal decision on how those experts should do their jobs. Does a GP leave a cardiologist or an orthopaedic doctor detailed instructions what to do? Nope, a GP decides that hey, by the look of things we need a cardiologist or an orthopaedic doctor to help treat the patient further.

RFP takes your brand away and nullifies your unique experience and vision (and anything else unique), reducing your purpose and value to just meeting the decreed specification, and meeting as cheaply as possible much if not most of the time. Again, like Warrilaw says, in the RFP-driven model you don't get to promote your personal vision or your company's vision, at best you get to participate in executing the buyer's vision, if the buyer has any particular vision at all. Alternatively, you may end up chasing the RFP drafter's fuzzy ideas like a child in the fog.

In any case, your role is execution, and not the kind of execution that makes you an executive. Your client is the legislature and the executive, your role is more like the bailiff's, or reduced to compliance and carrying out. Except for those cases when the RFP'er sets you to do the footwork of fleshing out the details — which is actually somewhat smart for the buyer to do whenever it can be reasonably expected that your relevant knowledge exceeds that of the buyer's.

Consider also that you are working with a client who prefers to feed that huge costly and inefficient monster apparatus rather than coming up with a smarter thing to spend money on. Or the client would that the client could, but the client can't take the liberty to be smart because of being tied up in some sort of regulation or contract, almost certainly one that originated with an RFP. Can you really expect rational decisions in that kind of setting?

The translation agency's RFP misery (translators also please keep reading, lawyers also want to)

Now, if you, my Dear Reader, are a project manager or an agency owner or employee, or if you simply talk to them a lot, chances that are you are already acutely aware of what it takes to win a procurement bid in the translation 'industry'. Namely, the rates which agencies — other than yours, I hope — quote if they seriously want to pull off the win. For example €0.015 per source word complete with proofing, redaction and native speaker review. Which is about a half of what an affordable translator with some standing charges in that same market. Legally, such a bidder should be thrown out of any public procurement proceeding!

An incentive to bid low may be even easier to find where failure to find translators for any concrete job requirement submitted by the buyer results in no particular penalties. If they won't be penalised for failing to guarantee translators for the job, then what stops them from quoting prices very few translators — or possibly none — would accept? At worst they just won't get the job.

An example scenario could look like this: Several winners are selected. They are allowed access to an electronic platform where they can bid. The lowest bidder will win. The non-winners don't get the job, so they don't get the money for it, but that's it. Even if the buyer sustains damage, causation may be tricky to prove and attribution tricky to establish.

The link between low bids by agencies and low pay for translators is inevitable. This is because the most important cost driver is (to simplify things a bit) labour, i.e. the translator's pay. Once agency bids in client tenders get to the point where they are lower than what translators are normally paid — and the agency still needs to cover overhead at least, even if it's not making any major markup on that particular deal (e.g. because the business purpose of it is only to earn referrals from the client and meet the experience requirement in more lucrative tenders) — then it simply must cut into the translator's pay.

To put it as directly as we need if we want this 'industry' to get any better — translators cannot indefinitely continue to bear the burder of too risky bids, or business development strategies based on not making much income because of e.g. working for referrals only (selling at cost in order to earn testimonials, meet experience requirements etc.). There needs to be a different way, a different business model.

Moreover, however bad an agency and its staff may feel about RFP's — and I think there's a strong chance that it's quite bad — translators feel even worse. I don't presume to guess what your background is as agency staff are a varied community and not just one sort of people, but there's a good chance your translators' background includes less business, management and administration than yours. Consequently, they will likely have even less heart, or stomach, for procurement hoops than you do.

In fact, they already complain about hoops all the time on message boards, in Facebook groups and other outlets. Many have already resolved to ignore any jobs involving an RFP.

Almost one last thing: Just to be sure, good translators will eventually change careers or focus more on acquiring their own direct clients instead, or at a minimum restrict themselves only to the highest-paying agencies. Paul Sulzberger discusses this in more detail in his interview with Luigi Muzii (Are bad translators driving out the good, 24 September 2012). If you have unfriendly work and working conditions, then you'll be stuck with bad translators eventually. Perhaps not now, not tomorrow, but eventually. But chances are your existing portfolio of translators is not quite exciting.

Finally, do you know (e.g. by keeping a record — and if you aren't keeping one, you should give it a try!), how much time the procurement hoops consume cost you and your employees? How often do you win? Even if you win, is the pay worth it? What is the return on that investment?

What could the alternative be, if you gave up on chasing tenders that award huge volumes of work in one swoop but were instead free to deal more at ease with inquiries and requests coming from your non-RFP potential clients?

Perhaps read Survey says – RFPs increasing, but process improvements needed by Ryan Bowers @ RFP Attorney, 31 October 2012. Our 'industries' are very similar to each other, and a lot of their experience is transferable. The survey itself is available online, free of charge, at LexisNexis, and is a short and handy PDF file. You may also want to know that a somewhat dated but still not ancient survey showed that

72 percent of Fortune 500 companies admitted they had sent out RFPs even though they had already selected the vendor they were going to use (Ann All interview with Tom Searcy, ITBusinessEdge, 15 October 2009).

The translator's RFP misery (still useful for agencies and clients to know)

Agencies can't use magic to pay translators more than they are paid themselves by their clients, or give longer deadlines than the client gave to the agency. Sometimes agencies take a short-term loss for the sake of a long-term gain or to avoid a looming loss, but they can't do that too often or they will go bankrupt.

While huge Mega Language Vendors and Multi-Language Vendors rake in millions, with huge bonuses for management (possibly the same guys who require more and more concessions from translators), most agencies aren't that happy. And agencies are paid little because of the competition model they're set in, i.e. buyer-dominated procurement.

The problem will exacerbate on each additional tier of procurement, especially any one which was not expected at the stage of the original tender. Deadlines will become shorter and cheques thinner as both time and money are divided among more and more intermediaries between the client and the translator.

Next comes the problem that if translators keep being making this sort of price-driven competition possible, allowing the problem to deteriorate in small steps (in frequency or size of impact or both) they will sound less credible when they do finally try to make a stand, and agencies will have much less incentive to do something about the current model and the current structure of this 'industry'.

Additionally, if you participate in the same tender together with a number of agencies, those agencies will effectively be competing for the privilege of offering your services at the lowest price possible. You'd actually be better off bidding on your own if you were eligible. And you won't be eligible to bid on your own if you sign non-competition clauses and if your non-disclosure agreements prevent you from proving your previous experience in handling similar work.

Furthermore, participating in the RFP game in tandem with agencies is risky for you on a different ground: uncertainty whether you will actually be chosen for the job if the agency wins. Not always the translators whose CVs and diplomas (copied or scanned and sent by e-mail or even physical mail) win the tender for the agency actually are chosen for the job. Sometimes the job goes to cheaper translators instead. There are sometimes loopholes which prevent that sort of thing from being inconsistent with the terms of the contract.

Finally, Remember that agencies don't exist to bring you profit. They aren't there to jump through all the hoops, take all the risks and leave the pay intact for you. And why should they? If you want someone else to work for you in some sort of dedicated way (e.g. find you profitable jobs), you should expect to need to keep that person or company in your payroll. So even then, there'd be not intact pay, anyway. It's actually both unrealistic and unfair when translators think agencies are or should be charities for translators' benefit. Agencies won't normally be playing the RFP game with a specific resolve to ensure good pay for you. Rather, it will be a question of can they expect you to work within the resulting budget or not.

You also need to realise that — by now — some agencies have adapted to the new reality and become commodity resellers. Things won't be getting better from there. Just like good translators get squeezed out of the market, good agencies will be driven out of business in a world where clients care mostly about the price or expect quality but also have unrealistic ideas of the price of getting it. Or they don't care because they just need to push it on someone else or push it out.

Added misery in a multiple-vendor chain (whether translators or small agencies)

One of the consequences of the financial and time constraints of long procurement chains is that QA is likely to be impacted by the savings. Proofreaders, editors and reviewers are becoming rarer and rarer. Even where there are still some on the payroll, the rush they face and the tiredness are going to take their toll, leading to more slips (failure to detect problems and avert risks) and the unnecessary flagging of things which aren't errors (loss of time, conflicts), possibly largely due to the fact that a reviser (or some other QA'er) spends 10 seconds making a guess on something the translator spent 30 minutes researching carefully, worse still if the reviser isn't as qualified as the translator.

And the small budget may indeed result in underqualified QA professionals being hired, or semi- or non-professionals used, or even nobody at all. Absence of QA exposes the translator or the agency down the chain to greater risks than normal, especially where they expected the higher-ups would handle the QA, and especially where what the bottom of the chain is doing is not exactly what the top of the chain originally had in mind.

On the other hand, while one or two underqualified QA people are still better than none, even though dealing with their flags and queries may prove taxing, a large number of underqualified people in the QA chain increases the potential for questions arising from ignorance. Ignorance either of the language or field translated, or of the job requirements agreed up or down the chain. This can lead to huge loss of time, and time is how a professional makes money.

Plus, a QA chain with multiple redundant steps leaves more room for subjective disputes and multiple reversals and reversals-of-reversals, e.g. when QA'er 4 agreed with QA'er 2, who agreed with the translator, while QA'ers 3 and 1 were of a different opinion.

Things get worse where the various links on the QA chain are actually competitors, hoping to get translation rates next time.

RFP misery comes from the idea that if a business executive decrees high requirements and a low price life will obey

… Which is too smart to be true in real life, as we discussed in the beginning. The truth is that contractors will cut corners when they think they are forced into that position. Even ethical people will cut corners when they really have no other choice, as in it's either that or die (e.g. get a foreclosure on their house, lose the office, lay off their employees, go bankrupt etc. or literally die of a heart condition after putting in 100-hour weeks on a constant basis).

As a minimum translators — and possibly agency staff also — will need to work at a faster rate or work for longer hours, or both, resulting in hasty translations, uninspired writing, more errors and QA issues. Which will, in turn, seem to justify whatever low opinion the disconnected people higher up the chain may have of translators and their work.

Worse still if deadlines are cut even shorter by the time it takes an agency to find someone who 1) meets all of the mandatory requirements, 2) will still accept the low rates and submit to the onerous procedures imposed by the procurement system. In such a situation the translator — even if somehow not unqualified — will be working in suboptimal conditions, even perhaps contrary to the end client's original intent and contrary to the client's wishes if the client actually received full information about the process and the consequences of its shortcomings.

Moreover, knowledge of human nature dictates that nobody likes to set to work by having his rates driven into the ground, being effectively told on the onset that profit is not for him to make on his own work but for someone else. Especially if that someone else is a for-profit corporation. Personally, if I had to drop my rates like that, I'd seek out a hospital or school or an armed service or even a government agency but not a for-profit enterprise. And if a for-profit enterprise, then at least a struggling one and not one which publicly takes pride in the profits it makes when it's not complaining to me about how tough the market is.

'Okay, you can set to work, but it's important that you only make a minimal profit, just enough to survive. And you need to give your everything, nothing less will do,' — this is basically the message sent when prosperous and powerful companies leverage their position to get the lowest prices possible. That message can't really work.

Finally, agencies will hire cheaper and possibly underqualified translators, dispense with proofreading and editing, take liability risks, take other desperate steps. How else can they charge the low rates it takes to win a (local) government bid? The RFP regime already makes it really hard in the best situations to pay decent rates to translators and finance the QA at the same time. And cover the overhead. And make even on the costs of bidding.

RFP'ing are a lot like online dating

People somehow manage to fall in love, date, get engaged and married, if they have enough exposure to the opposite sex in natural settings in real life. They don't actually fuss so much over details or keep moving on so dispassionately spending 10 seconds on a profile like a recruiter on a CV.

By contrast, in online dating, wading through dozens and hundreds of preselected profiles with no pre-existing interest or particular feelings encourages them to dissect and calculate, and they just can't connect, and things don't work — unless by some chance they do (e.g. because someone proposed meeting up offline at the right moment, not too early and not too late). So one's never really satisfied. There are very fields to fill on but precious few distinguishing factors, forget a compelling incentive to pick any one of the 200 pretty faces ahead of the others. Even if the seeker's focus is somehow drawn to a single specific person at a time, then there can always be someone better, now or in the future, at least theoretically. Chances are the beauty contest will never end, no wonder if the judge doesn't know where to start and the participants typically neither. It's difficult to establish relationships in such circumstances. Sound familiar?

Barring some responsible uses of it, RFP'ing is going to be a neverending race to the financial bottom, and sometimes financial bottom and QA peak, at the same time. That's not so bad in products or services that can be automatised, but in professional services it benefits nobody.

I don't want to blast RFP's totally, not even in professional services such as translation. Perhaps there are non-harmful uses. As far as translation goes, I can't really think of any other than patriotic service providers empathising with their government's need for thrift or some semi-charitable applications.

Recap

Now let's take another look at the comic at Bart Aalbert's again. So how about we just eat an apple instead, next time an RFP comes?

RFP-driven procurements are going to be harmful to you, unless, somehow, you thrive in the setting. They cut into your profits, set you up for losses, tie you up in a bad job and commoditise your profession. They make you dance to the buyer's tune, which may put you at odds with the standards of your profession or in some cases legal or regulatory obligations. This also promotes irresponsible or otherwise unwelcome attitudes in your potential clients.

Auctions II: Reverse-Auction Setting is not Optimal for You

A couple of days ago, on 2 April, we began to discuss auctions. Please read the first instalment if you haven't yet! It offers a useful introduction which will make this easier. We established that, unlike in one-to-one negotiation setting, auction settings include multiple buyers or multiple sellers. We concluded that participating in an auction — or auction-like — setting was not optimal because it made you and your competitors undercut each other. Now we'll discuss the why in more detail, and also the how.

Setting the ground for competitive procurement, which benefits the buyer

After repurposing two bullets from Wikipedia's article on requests for proposals, an auction:

• informs suppliers that an organization is looking to procure and encourages them to make their best effort

• alerts suppliers that the selection process is competitive

Sound familiar? You've probably heard the adjectives: best and competitive often enough. In fact, they have become de rigueur throughout the translation 'industry'. It also:

• allows for wide distribution and response (this means that there will be quite a lot of competitors, not just two or three)

In summary, a potentially large mass of people is alerted that there is a need to compete, and encouraged to make their best effort. Best for the buyer, just to be sure.

Interlude — contests — a different kind of competition, but not totally different (though nicer)

In the translation 'industry', the competition sometimes comes down to a contest and rates are fixed or close it. This is not unlike civil service examinations, which have a long tradition going back e.g. to the mandarin examination in imperial China, or even DipTrans or sworn translator exams in which you gain credentials rather than direct work, and the pass threshold is based on how good you are in the abstract rather than relative to other people. Enrolment in professional associations is also similar.

Civil service examinations and similar state exams actually take competition further — sometimes you're graded against other people and only the top n% wins.

And then there are also contests. The whole point of them is that not everybody can win.

Contests resemble auctions, but we'll become paranoid if we exaggerate the similarity. In some cases what looks like an auction is more like a contest (which means not as bad). The difference is that contests have the potential to be elevating on a personal level rather than commoditising the procurement and taking the personality away.

The best effort — breakdown

Best effort is not limited to just best rates. There are also 'non-price factors' (or 'drivers'), but they are not necessarily as nice as non-price competition is in theory. Notably, non-price factors can still be very quantifiable (measurable), even quantitative in nature, and even outright numbers.

The best example of a numerical non-price factor is the role of deadline in some inquiries directed to multiple translators or agencies. If you recall, quotation forms often have a deadline field, where you're supposed to enter a deadline on your own. (Just to be sure, a deadline is not the same as a completion date, the vibe is different.)

Other distinctly quantitative non-price factors include:

• years of experience, e.g. 4 or 12 (raw number)
• number of words or pages in the field, e.g. 5000 or 250,000 (raw number or numerical range)
• how many words or pages you can produce in a day cycle (range again)
• sheer number of testimonials (translator directories often calculate this number and make it visible, even prominent)
• number of credentials, memberships, publications, courses attended etc. (obviously sized up rather than actually counted, barring some really surreal procedure)
  

Sometimes these factors reflect necessities of the job or position — for example credentials, productivity, experience level can sometimes be reasonably necessary for the task — but they're often just a criterion to narrow down the large pool of people who will respond to job announcements.

Some less obvious and more debatable examples include:

• degrees, in some countries, e.g. B.A. < M.A. < Ph.D.
• software versions
• multiple different CAT tools or office suites or other types of software or equipment
  

For each of these you could make a qualitative case, but the numbers game (or ladders) may prove too hard to resist. So even when it's not price competition, it's still based on numbers, or just as good. The blend of price and non-price factors can produce a different equation each time, meaning that a different weight is given to the price, so it's not only just about driving the rates as low as possible. But there's still an equation with a lot of basically numerical variables in it.

This said, not all quantitatively or even numerically driven recruitment equations necessarily hurt you. Or necessarily more than simply living in a market does.

Some people just like the transparency of such models. Others thrive on numbers. Yet others are strong on the numerical variables, such as well they have a ton of everything (experience, credentials, testimonials, types of software etc.), but in the latter case I wonder what they're doing competing on someone else's terms rather than trying to dictate their own.

Bottom line, in an auction-like setting you're basically competing on numbers or very similar types of variables, with a good chance that such a mode of comparison will not make you feel appreciated as a human being. There is a danger that your work may be commoditised, that something you put your soul in will be traded like coal by the wagonload.

Inversion of roles: Vendors/suppliers competing means the buyer reaps the premium, not you

This has probably become all but obvious by now, but let's nail it down: When you and several others in your class are competing, the bargain is the buyer's.

You and the other potential sellers don't just undercut one another a little. On the contrary, all of you are cut right down to your bottom lines unless all of you hold the line, which is unlikely to happen. This is free market at work, you can't force people to keep their prices up if they want to land the deal.

In other words, the buyer does not need to haggle, you are doing it for him

The buyer can sit back and watch the sellers do the haggling for him, among themselves.

When the buyer additional imposes a unique bidding rule, i.e. one chance to bid per participant, the sellers may even jump straight to their best effort.

The above saves the buyer the time, the exercise, and the need to develop any real haggling skills.

Another benefit — haggling with shadows (or with yourself)

By introducing the competitive model, the buyer can still reap almost the entire benefit of the bargain as long as you don't know that you're the only potential seller to respond or the only one who is a viable option.

It's almost as simple as telling you to be competitive and getting a discount. Again, with no haggling time consumed and no haggling skill required.

Yet another benefit — preselection

The buyer can even get the sellers to compete way before any concrete job materialises. Sometimes it is not even certain that any work will actually be there or how much of it.

The competitive atmosphere can get the sellers to fight tooth and nail over something that doesn't even exist. And we're getting close to:

Emotions working for the buyer's benefit — drive to win, distraction, loss aversion, Investor Syndrome

People like to win, nobody likes to lose, and those who have already invested much want to protect their investment, so they will keep investing a little more, even take small losses, to avoid losing the big deal they are after. Would you rather finally accept a lousy rate or lose the hours you've already put in analysing the task, assessing the workload, developing a tentative schedule, preparing a quotation for the buyer?

Perhaps more importantly, the whole thing with competing, competition and being competitive works as a distraction. It turns attention away from what a bargain the buyer is making here, and focuses it rather on finding ways to undercut your colleagues who might want or need the same job.

Plus, with some reputational cost exceptions, simply declaring someone the winner costs the buyer nothing.

Thus, all sellers end up competing for the chance to offer the buyer a discount. Every buyer, actually. There are many translation jobs, not only many translators, but since the procurement (recruitment) setting for each job is competitive, everyone ends up undercutting everyone for all jobs. The pay will end up lousy for all jobs rather than the workload being divided among people working for decent rates.

Between facts and emotions, vendor/supplier is less than seller

Participating in a reverse auction makes you no longer really a traditional seller any more. Thus, you are not that accomplished elderly gentleman proudly standing behind the counter of his own shop, often built with his own hands, whom you know from westerns.

On the contrary, you rather become the working bee carting its produce to the castle to await the lord's pleasure, either on the bee's own motion or having been summoned and unable to refuse. Unable if not because the lord has a jail and a headsman, then because some types or volumes of goods need a lord's capacity for demand and a lord's purse.

A more depressing analogy could be drawn with a troupe of dancers swinging to the left or the right in response to the motions of the lord's waving hand. This is what it looks like when buyers totally get their way and can be lining up their potential sellers just the way they want.

Selling you the job

Just as one says that the roles of the buyer and seller are inverted in a reverse auction, one could also say that in a reverse auction the buyer is selling you the job.

Selling it like a diamond

The job is sold to you as if it were rare goods, but it's more like with diamonds: it comes down to hype and controlling the supply. Diamonds are not rare at all, nor are they the most valuable gems are at all. The tradition of spending the worth of, say, a man's two salaries on a diamond for his betrothed, was allegedly inspired by a diamond-selling company, obviously not in a fit of altruism.

Effectively, you are purchasing a job in a setting in which the person or company with the job controls the setting. That setting is a treacherous ground, and it plays with your head. Translation jobs are commonplace, as are translation clients and translation intermediaries and resellers. This is not a negative comment, just a fact. On the other hand, auctions are made to look like you're being offered a unique opportunity not to be found elsewhere etc.

... Sometimes showing you the bling but still asking for — or requiring — a signing-up discount! 

Like you should be so happy to work for them and their profitable company that you'll gladly take a cut in your own profit to allow them to make even more of those lovely quarterly figures.

Make no mistake, we're talking about the buyer's profit as business, not about saving humanity

If you care so that everybody or at least many people and companies can afford your translations, then your prices are affordable, not competitive. In an ideal world, your lower translation rates would lead to lower consumer prices. People would pay less for home utensils, entertainment, education, holidays perhaps.

But that relationship is not so direct, and between you and the consumers ending up using your translation or something being affect by it there are often entire chains of business companies whose mission is to maximise the profit for the shareholders. And for maximising the profit for shareholders the executives will rake in a nice incentive bonus.

On translation-related message boards we talk about two things: large translation companies asking for lower and lower rates, and the same companies boasting their high profit margins. Let's connect the two facts. We are not saving any damsels in distress here. There are people in the world who really need pro bono services of the same kind as those provided by you.

The bidder's costs: winner takes all, no return for non-winners

Whether the auction is regular or reverse, participants other than the winner are usually not paid for the costs they incurred in participating. In your case as a freelance professional, this includes your time. Time which you could spend working.

Unless you either win or at least receive some valuable feedback which helps you win next time or go compete elsewhere with more success (or stop competing in auctions), you get nothing if you don't win.

Actually, the winner doesn't get any refund, either

The buyer expects to compensate the winner for the goods or services bought, not for the cost of selling! In a buyer's mind, the cost of selling doesn't deserve to be compensated, just like — where working by the hour — you don't bill the client for the time spent writing the invoices or especially convincing the client to hire you.

The buyer expects to compensate you for the goods or services at fair market value or below, often much below. The pay does not include any allowance to reimburse you for the cost of participating in the auction.

In the buyer's mind, not even simply getting the job is supposed to constitute the consideration (commercial equivalent) of your investment of time and sometimes even money in the auction process. The mere chance of getting the job is supposed to be the consideration.

And just to be sure — the auction process has already made sure that your profit is as low as possible. Probably lower than in non-auction jobs that don't require jumping through so many time-consuming hoops.

In fact, you are indirectly reimbursing the buyer for the buyer's cost of running the show

The buyer will typically want to recover the costs of organising and processing the auction. While the the money will — of course — not be coming out of your pocket, and you certainly don't have any claim on the buyer's money which you haven't earned yet, the fact that the buyer has engaged in a costly auction process means that there will be less money in the budget for your pay.

The taste of victory in vigorous competition may be bitter overall

Like we noted above, since you are competing and the price is something very obvious to compete on, in a highly competitive setting your pay is often not going to be satisfactory, possibly even way outside your normal comfort zone, if you really get carried by adrenaline.

Initially, you will be energised by the excitement of actually winning, but after some time the reality will eventually set in, and you can very much end up being the battered winner doing an onerous job at poor rates.

And the winner doesn't even always win

In the absence of a specific promise — or pressing need — to award the job to whomever proves the most attractive or least unattractive seller, the buyer can always call it off if the offers aren't good (i.e. low) enough.

Notably, this will happen when you compete for a job which already has a closed budget. For example because it is being outsourced by someone who has already had to quote a low price just to get it. Auctions follow auctions sometimes.

Since the buyer controls it, you're up for buyer-designed goods and services and terms and conditions and everything else

A reverse auction could simply see multiple sellers of very similar goods competing for the buyer's order, such as when someone passes from one cab to the next in a line, loudly asking how much for the ride. However, reverse auctions are frequently connected with buyer-designed goods or services. This means products or services which fit a particular need or purpose.

In the translation 'industry', it is about translation, but the buyer may want to design the way you're going to provide it, and especially the business and legal terms on which you provide it. It would be misleading to call that bespoke or tailored translation. Bespoke is when a tailor cuts the material for your exact dimensions, rather than an approximate range, so that it lies well on you. This may also involve a custom design, true, but designing the way in which the tailor is to organise his work, answer phones and be held liable (and hold you harmless etc.) is something else.

In short, if you get your jobs in auction-like settings, you're likely to end up with buyer-designed terms and conditions of providing your professional services.

You don't get paid for exceeding the expectations

Buyer design specifications sometimes leave you with less opportunity to shine and negotiate a premium simply because whatever unique assets and propositions you have to offer were not taken into account when designing the specification. The specification was likely designed with the average participant in mind, and the buyer's own idea of the goods or services in mind, often a fuzzy one, with the buyer often being clueless about the nature of the services procured. This is another cause which makes you earn less than you otherwise could, or be respected less than you should, or have to process requests which should never have been made.

Buyer design with footwork done by you

Sometimes instead of complete buyer design — which would mean some work to do for the buyer — you may be tasked with filling in descriptions of how you're going to meet this or that condition, or even doing data entry footwork such as filling the buyer's questionnaire with data from your CV, which the buyer also requested.

Wasting time and money for the buyer's convenience

You may be asked to prepare a lot of paperwork up front which the buyer will only need from the winner. Setting the sellers to compete against each other and shoulder all the costs, sort of like puppies will fight for crumbs, can have a demoralising effect on buyers who are basically getting their way in everything.

This is not uncommon in the translation 'industry' with all the questionnaires and forms you need to fill in without even knowing if you will ever actually get even a single job from that particular source. Questions and forms which more often than not repeat things which are in your CV or in the e-mail exchange, and infrequently ill-design or outright clueless.

Caveats and silver linings

• To some people competitive and best are just words, uttered or written without deeper thought.
• People from some countries are influenced by the crude style of their legal regulations and quality standards which makes no distinction between literary works and construction works.
• Not everybody is laid back or can afford to be. Some companies still engage in very formal and carefully recorded communication. Some have no choice, e.g. owing to the nature and source of their financing.
• Buyer specifications often save a lot of time and stress by answering before you discover the need to ask. Plus, you can't have the best of both worlds, you can only find some balance between clients who don't know what they want and clients who know it too well.
• Asking you for a competitive rate in a one-to-one setting is not necessarily an attempt to get you to compete against shadows. Possibly, the buyer cares about the price but also wants to avoid the costs and hassle of an auction, thinking you may appreciate avoiding them too (along with the uncertainty of the outcome). And he has a point there.
• It's hard to steer totally clear of commoditisation. Many translators themselves offer their work to clients using commoditised language, as if they were selling some merchandise. Possibly you do as well, for example if you refer to yourself as Translations instead of Translator. There is a slight degree of commoditisation of your work in things like that.
• Always see the difference between contests and auction, healthy competition and unhealthy competition. Be realistic about the unhealthy elements — you can't totally avoid them, and you're probably introducing some on your own in the way you write or talk to your potential clients.
  

Recap

Reverse auctions are for the benefit of the buyer, not you. The auction mechanic with its competition language uses psychology against you, notably distraction, loss aversion, desire to win. It makes sure the benefit of the bargain goes over to the buyer, often saving the buyer the need to engage in the haggling, which the bidders will do for him. Competitiveness can be used as a magical word to make even a single buyer drop his prices without going through the real process of competition. Even if you win, it may be a Pyrrhic victory, resulting in you working below your bottomline, or even taking a loss.

What's next?

In Part 3, we'll focus on RFP's, i.e. offering your services in tenders, or why you don't want to (in case you don't already know). In Part 4. 3 we'll talk about how to control the damage, turn the mechanics to your advantage or leave them behind.

Auctions I: Auction or Reverse Auction. Introduction to Auctions

Please note that this can be a little intense, so perhaps make yourself a nice cup of tea or some other herbal infusion and relax, or — depending what works better for you — get a coffee to help concentration. To cheer you up, these are no layman ramblings. They are ramblings of someone who has studied law for more than a decade and taught procurement law and translation. You can find some useful knowledge here which will help you understand how getting jobs works (or does not work) in the translation 'industry'. It will also provide the basis for our discussion of tenders some time later this week.

Let's go through the basics first.

A contract is a transaction, not the paper it is printed on or words that were said. And a transaction is a contract if it involves an exchange of benefits. Legally, a contract is made by offer and acceptance. In the default setup one buyer approaches one seller, or the other way round, but in any case their one-on-one session of offering, counteroffering and accepting finally leads to contract formation. Now the transaction has been concluded, it only needs to be carried out.

While there is still technically an offer and acceptance, in auctions things are different. The difference is that there is no one-on-one process, there is many-on-one or one-on-many. This means there are either multiple potential buyers or multiple potential sellers. Where there are multiple potential buyers and multiple potential sellers, it's simply the market (although it can be streamlined and catalysed, for example by trade events and networking).

The market part is what makes the one-on-one offer and acceptance basically a textbook construct. Existing in the market makes both buyers and sellers aware of what other offers are there or can easily be obtained. This knowledge influences the buying and selling decisions they make. Both are basically comparing their options.

Example: Even if the process looks like this:
'How much?'
'Five bucks an ounce.'
'Deal, gimme two!'
... There is still the knowledge of some other guy who charges less but takes a longer walk to get to or has worse goods. Or better goods but higher prices. Or everybody's offer is substantially the same, so the less time you spend in deliberation mode the better off you are.

On the other hand, in almost every auction there is still a broader market in the background. Unless we are dealing with a monopolist, there is no pure one-to-many or many-to-one situation. There's at least a weak echo of many-to-many.

Example: Look at the job posting FAQ section on Proz.com — and tell me honestly after at least reading the questions in bold that job posters don't also find themselves in a form of auction, in which they need to compete for the bidders' attention. Yes, in real life auctioneers compete for bidders. Bids won't materialise out of thin air.

Thus there is no pure auction or non-auction process. I want you to get used to a more liberal meaning of 'auction', not just an explicit formalised process but more of a model, a mechanic. In this sense even elections are a form of auction. This should help you identify auction mechanisms in various business situations you find yourself in.

More to the point — barring exotics such as the Walrasian auction where multiple potential buyers and multiple potential sellers bid in the same auction, which is basically the market on steroids and which may help you understand double-edged scenarios like the Proz.com job system — there are two fundamental types of auction:

1. regular auction and
2. reverse auction.

Latin auctio simply means bidding, which corresponds to comparing. Bidding is usually progressive, in which participants progress their bids until all of them but one quit (they get real-time feedback as to how much others are offering), but also sometimes unique, in which each participant can only place one bid (and there's no readily available information on how much others are or may be offering). The price is not the only factor which may be the subject of bidding (e.g. you can bid on deadlines).


Bottom line: In a regular auction buyers place the bids, in a reverse auction sellers do.


This means that in a regular auction the buyers have to compete, while in a reverse one is the sellers who do. Ring a bell?

In Wiki's words:

A reverse auction is a type of auction in which the roles of buyer and seller are reversed. In an ordinary auction (also known as a forward auction), buyers compete to obtain a good or service by offering increasingly higher prices. In a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers undercut each other.

So which type of auction do you want to be in?