Request For Proposals are document vehicles through which private and public organizations procure goods and services. The process to use an RFP, or its variants namely Request For Quotation (RFQ) and Request For Information (RFI), are occasionally mandated by organizational policy and more often simply used to ensure the issuer receives the best and most appropriate goods and services from bidders at the most favourable terms. More completely, a RFx ensures there is clear communication between the two, or more, parties.
Naturally, the system is not fully efficient or fool proof. Additionally, resources are expended on the creation, consumption and reaction phases of a RFx. This is true to such an extent that organizations have dedicated units to creating and to answering these documents. Moreover, the process is developed to such an extent that there are consultants who write these things for organizations, sell pre-written and pre-compiled ones or websites that centralize the repository for such documentation.
Suppliers, however, do not typically like these documents. In sales circles there is little confidence that these procurement vehicles lead to business. Anecdotally, the success rate is low.
- For one, there is nothing stopping organizations from not moving forward. There is no obligation by companies to do anything.
- Secondly, the very fact that many organizations are bound to issuing a RFx may mean that, while a supplier has already been unofficially nominated, the buyer still has to go through the motions.
- The most obvious reason, and the third, is that in a game to stack vendors the winning provider may have little profitability or joy to proceed. Indeed, there are several books out there on how to avoid, ignore or respond to an RFP (if one must).
No surprise then that many vendors have stopped responding to these documents. The manpower to entertain these documents and the payoff is considered unjustified.
However, there is a time when you and your organization decide to play the odds and respond to an RFx despite the three points above.
Here are tips to increase your chances of winning the business:
- First and foremost be truthful in your response. It is important to describe your capabilities and qualification accurately and systematically. This not only mitigates future problems – one of which could be legal –but also allows you and the organization to focus on what you do best. The law of comparative advantages certainly applies here – not to mention your eternal soul should you believe in that sort of thing.
- As mentioned, sales organizations typically insist on having input into the document and its creation or having a level of prior relationship before engaging. Lead an honest internal discussion on your chances, your cost (time and money) to participate in the process and estimated profit you may derive. Regular sales factors like likelihood a solution will be adopted and a set deadline for a sale being present also apply. Is there potential additional business? Do you have the scope to offer an elastic response, which gives you and the buyer several cost, material and scope options thus increasing the odds that one of your solutions will be adopted? Speaking of which, should you be the winner your offered price will not be the accepted price. Expect to face price negotiations. Have you bracketed if needed?
- Think about the problem you are solving for the customer. This is a different proposition than answering the document point by point. As experts in the field, it is necessary to express your solutions and bring your know-how to bear in addition to solely addressing the questions posed. This includes understanding your audience. Is the end ‘customer’ technical? Is the end customer the manufacturing manager? Is there a financial audience that will review your proposal? Are you speaking their language?
- Do not be shy about selling. The sales process did not start or end with the receipt of a RFP or delivery to the customer of a RFI. In fact, sellers are often asked to present on their proposals and answer follow-up questions. It is a must that you explain what you can do, better and above and beyond the competition and how your experience and subject-matter expertise can contribute in addition to what is obvious and written in the document. Remember that your number one competitor is not your competitor, but the standard do-nothing laziness. This does not mean you have license to ignore your closest industry competitor. It is necessary to contrast yourself and to do so explicitly. Do you have differentiators that you should state even if you are not being asked explicitly to do so?
- Most obviously, understand the rules. There are typically pre-deadline Q&A sessions, conference calls or information sessions. You may be surprised to know how many times organizations are disqualified due to procedural errors, mismatched expectations or prohibited stipulated criteria (see ‘elasticity’ in point II). Spending some time on this factor saves time, regret and even schadenfreude later on.
On the flip side, should you decide you do not wish to proceed explain it to document issuer within the parameters of your organizational context, offer your free additional consulting and do express your wish that you work together in the future instead.
*Things That Need To Go Away: Organizations picking a supplier and subsequently issuing a RFP.
