Request Proposals: Turn Your RFP Losses into Wins
Request Proposals: Posted by John Kenney on Sun, Jun 03, 2012
Request Proposals: An essential component of any world-class sales process is an effective strategy to manage responses to Requests for Proposals – a sinkhole that can consume selling time in the pursuit of deals that simply cannot be won. Most sales organizations recognize that it is a mistake to view all RFPs in the same light. If your sales team has been fortunate and proactive enough to ‘influence’ the RFP, the likelihood of winning is nearly guaranteed. But if your team did not influence the specifications, is your only choice simply “No Bid?”
Two Kinds of Sellers
- Driver: The seller is in the “driver’s seat” because the sales team has succeeded in influencing the specifications; this is often the incumbent.
- Passenger: The seller is “just along for the ride” when a competitor is the incumbent or has influenced the specifications.
In our practice, we have witnessed a unique characteristic of world-class sales organizations: they not only distinguish between the two types of RFPs, but they also employ a proactive approach for each. If the sales team is in the Driver’s seat they will follow the RFP instructions and provide the required information. However, if the sales team is a Passenger they will respond in a very different way with different objectives. This doesn’t change the short term results, but over the long haul, the results for Passengers are far more positive.
The Purpose of an RFP
At the outset, it is important to understand the true purpose of a Request For Proposals. Buyers would like to think that it is a structured way to gather information, evaluate responses and select a vendor’s solution. However, the RFP is not intended to select a winner; the purpose is to de-select the losers. If the seller has not influenced the specs, the outcome is a foregone conclusion. Devoting the effort to respond to an unwinnable RFP is a waste of resources that could be deployed on other opportunities. But there is an alternative for the Passenger other than simply declining to respond.
A Different Goal
Obviously, the goal of a Driver is to win the award. The goal of a Passenger must be different. It is to gain awareness and to alter the buyer’s attitudes for a future opportunity.
For the Passenger vendor, the chance of winning the RFP award is slim. But this is not all bad news because the RFP response is actually a very valuable selling opportunity, even though it is not a closing opportunity. Unlike an unsolicited proposal which soon is buried beneath a mound of desk detritus, the response to the RFP is guaranteed to receive some dedicated attention from the buyer’s decision team. This is a unique opportunity to provide a response that piques interest and is a forum for defining differences from the competition (who are all conveniently responding with mechanical conformity and compliance.) Here’s how it is done.
Gaining While Losing
The 4 basic steps to respond when you are a Passenger:
1. Ask Questions: Every RFP offers the opportunity to ask questions. The Driver doesn’t ask any questions because the specs are wired for them. The other Passengers recognize the futility and they don’t ask anything either. Seize this opportunity to be different and focus energy on the question-and-answer period to make inquiries that are:
- Gap Exposing
2. Just Say Yes: The answer to every requirement is “Yes.” Remember that the RFP process is intended to de-select, not to issue an award. Final negotiations and the specific implementation details happen later. The Passenger vendors all lose here and never advance to the finals. Be creative in crafting positive responses.
3. Price in Ranges: RFPs usually require detailed pricing. This is often framed from the perspective of the Driver vendor so is time-consuming and another basis for de-selection for the Passenger vendors.
- Unless specified, avoid line item pricing
- Provide multiple priced options, especially when not requested by the RFP
- Brand these options so they are tied to business value
- Provide multiple configuration “alternatives” — each with its own pricing and storyline
Since the pricing will not conform to the RFP specifications it will be noticed. Take the opportunity to present an offer that captures the buyer’s imagination.
4. Summarize for the Executive: For the typical voluminous RFP, the decision committee does not have time to read every page. So each RFP submission is often reviewed in detail by one ‘screener’ who grades the submission for compliance (and, of course, de-selection.) The Executive Summary page is the exception. Everyone on the decision team will read this page as a token effort to equitably consider every offer. Spend time on this one page – make it clear why your offer and your organization are different.
Take Action on Your Next RFP:
I encourage you to try this strategy – you really have nothing to lose. At a minimum you will save some valuable selling time. And you will improve your chances in the future. The steps outlined above are described in more detail in our free RFP Response Strategy guidance that you can download by clicking here. Let me know about your experiences with RFPs by writing a comment in the box below.
A sales process will only deliver world-class results if the sales force devotes time and energy to winnable opportunities. Losing quickly is important. Enable your sales team to also lose effectively while setting the stage for future wins with a sales process that includes an effective RFP Response Strategy.
To Discuss how these Solutions will add value for you, your organization and/or your clients, Affinity/Resale Opportunities, and/or Collaborative Efforts, Please Contact:
Tom McDonald, [email protected]; 608-788-5144; Skype: tsmw5752