The number of RFPs you receive indicates the strength of your brand and the success of sales, marketing and social selling activities. But what’s the point of responding to an RFP if the process only gives you an outside chance of winning?
First, let’s take a look at why the RFP process doesn’t work based on an example from our own business.
The enthusiastic consultant and his opportunity
My colleague is very enthusiastic and committed to generating new business. This was potentially a very big deal for him, to implement a Sales Transformation across a large state-owned defence supplier with 10 divisions. And very importantly, he thought he had a Coach within the customer organisation.
When asked directly if his proposal would be given full and fair consideration the Coach assured him it would. The instructions from Procurement were that at least 9 competitive offers had to be submitted. That’s why his Coach did everything he could to keep us in the running.
With the encouragement of the “Coach” we went ahead. The RFP was 120 pages long and it took 4 of us 3 weekends to complete – about 150 hours work. We submitted it and waited. And waited. Eventually we heard we had not been successful so my colleague contacted his Coach for feedback. He discovered that the assignment had gone to a rival who, it turned out, was already working with one of the companies in the group. When Procurement who was running the process looked through the proposals they felt they were not qualified to judge the solutions so they passed them on to a group of managers. The same managers who were already working with the company who won.
How this illustrates the flaws in the RFP process
Let’s run through what is wrong with RFPs and the consequences for Buyers and Sellers.
- It costs too much and takes too long. There is an army of Sales Professionals and Procurement Professionals out there and by definition – if 5 vendors submit proposals and only one wins 80% of the time has been wasted. Many subject matter experts have been diverted from revenue generating activity and that also costs money. The customer may not pay directly for the wasted time but they pay indirectly because all vendors have to maintain the overhead of pitch teams.
- RFPs don’t necessarily deliver the best solution. Most RFP processes allow very little face-to-face time with the key stakeholders. Answers to questions are distributed to everyone and it is very difficult to build trust and overcome existing preferences in a 1-1.5 hour proposal pitch.
- The RFP process excludes strong alternative suppliers. In the example I described above we should have qualified the opportunity better and not wasted our time responding to the RFP. All the other serious contenders saw the incumbent had an advantage and declined to respond, so the buyer didn’t see many real alternatives.
A new way to run an RFP
At this point you might be forgiven for saying something like ‘Yes, we know RFP processes don’t work but we have to jump through the hoops to win the business.’ But you can help to improve the process. Here’s an extract from a smart RFP document:
“The scope of your content offer is limited to 4 MS Word pages or 6 content PPT slides maximum. We expect a rough overall project approach, the key success factors and a detailed agenda for a 5-hour co-creation workshop. In this co-creation workshop each shortlisted vendor will come together with relevant stakeholders and we expect your proposed delivery team to facilitate this workshop. At the end of the workshop the main deliverables should be elaborated and subsequently offered”.
The vendors get to meet key people in the Buying Centre and the buyers get a feel for how it will be to work with the vendors. The vendors still have to go away and write a proposal but it is one more likely to deliver the right solution and fewer vendors wasting time on lengthy proposals that have no chance of winning.
What should you do now to deal with RFP situations?
We can’t fix this overnight and not every vendor or purchaser wants to. Procurement people may think that a leaner system will mean fewer jobs. But most people want a system that gives buyers the best solution quicker and costs less.
This is what you can do now.
- Qualify every opportunity and don’t waste your time on RFPs that you are unlikely to win.
- If you see an RFP that clearly won’t deliver the best solution challenge it. Suggest a better option. You may find procurement people are so desperate to keep enough vendors in the process that they will be receptive.
- Suggest test drives. If you can talk to the buyer you can suggest things like a small project as a way to let the buyer experience the potential of the alternative solutions and the quality of the teams delivering it rather than just reading through documents.
- Don’t just do what the customer asks you to do. This is the best way to end second or third but not first. My benchmark for a good sales process in response to an RFP is that it includes 5 things you have never tried before.
We may not be able to change the RFP process overnight but customers who can procure better solutions more quickly and cheaply will have a competitive advantage. And that is what everyone is looking for.