One of our global clients recently shared with us that this year nearly 60% of enterprise-level sales opportunities they are engaged in include a Request for Proposal (RFP) as part of their buying process. This is up from less than 30% just one year ago. They are not alone. The use of RFPs and the practice of buying via “tender” is a rapidly-growing trend that those of us who sell large complex business solutions can’t afford to ignore.A very common question we hear in our sales training workshops is “What should we do about RFPs?” It’s a tough question to answer in a few sentences because there are so many variables involved. There are two predominant schools of thought on the subject: One that suggests we simply DON’T respond to RFPs (i.e., build your business with accounts where you don’t have to play the “RFP Game”) while the other recognizes that in some sales environments, such as government and institutional sales, you MUST respond if you want to be considered. So the only good answer to the question of “What should we do about RFPs?” is: It depends.My business partners and I have just completed a brand new workshop program called Winning Competitive Contracts in Response to RFPs™. In this course we try to address what we believe are the the most important aspects of increasing your success rate in winning RFP-based sales opportunities, which include:
- Playing the “RFP Game” to Win – We should consider both the value and the risks of responding to RFPs as well as evaluate the actual cost (in terms of resources needed and opportunity costs) versus the potential benefits. We need to really understand the various factors that determine our success in winning RFP-driven opportunities, such as your relationship(s) with the client, our understanding of their business challenges and their goals, how well our solution fits, the commitment of their executives to ultimately take action and buy, etc. Don’t just “play” the RFP game. Get in it to win it! Or, get out!
- Understanding the RFP Process – While a Request for Proposal can often be a huge document with hundreds of questions to respond to, we should keep in mind that the RFP itself is only a piece of the client’s overall decision-making process. The RFP is typically used to answer the question “Who should we buy from?” But some of the larger questions your customer is simultaneously wrestling with are: Do we need to buy anything in the first place? Can we build what we need ourselves? Does this investment tie back to our business plans and strategies? Will this help us reach our goals? We should seek to understand what we call the “context” of the RFP so we can better determine if this is something we can win.
- Selecting which RFPs to Respond To – Half the battle is picking the right battles. Many of the RFP “losses” our clients experience are actually “non-opportunities.” In many cases the client decides to do nothing. Or after going through an elaborate selection process their business conditions change and they put the project off until next year (which usually turns into forever). What if, by using a consistent set of criteria to qualify each RFP you receive, you could avoid wasting time on “bad” RFPs? Imagine the amount of time and money you could invest on other more viable opportunities!
- Defining Your RFP Response Strategy – Too many times we observe companies using the “Ready. Fire! Aim.” approach to RFP responses. Before you answer the first RFP question, determine what your strategy will be to differentiate yourself from the other companies that will likely respond. Do you intend to position yourself as the “best in class” solution? Are you the technology leader? Do you offer better customer service after the sale? Are you going to try to compete on price alone? Get your sales strategy right, first! Let your strategy drive your response. But even more importantly, let it drive your actions before, during, and after you submit your response.
- Preparing For Your RFP Response – Because an RFP response can be a lot of extra work ON TOP of your day job of selling, the business of writing a response is frequently left to the 11th hour. This is a huge problem! Not only do you get a less-than-your-best response, you might end up wasting more time. Whenever possible, develop your response plan well in advance of its due date. Assemble a team that can help you with research, data collection, copy writing, proof reading, etc. Treat it like a project that is worthy of proper management. Not only will this reduce your own stress level, but it can dramatically improve the quality of your response. Your client will definitely be able to tell the difference!
- The Structure of Your RFP Response – Sometimes your client will dictate the format and structure of your response. But whenever possible, you take control of as much as you can. A well organized structure for figures, exhibits, and samples is crucial. Also, don’t assume that your client will sit down and read the entire response in one sitting. In fact, RFP responses are often broken apart for review and assessment. Include strong executive summaries for each chapter or section of your response so reviewers can quickly find the two or three most important points you are making within each section of your response.
- The RFP Response Process – As with any complex endeavor we do over and over again, responding to RFPs can be made much easier and you can produce far better results by establishing a standard process. We recommend making a very detailed check list of all the things you need to do before you even start your response, such as the clarifying questions you need to ask to make sure your even want to respond. Create a step-by-step process with responsibilities and milestones. Manage the RFP response like a real project. It is!
- Persuasive Proposal Writing – When responding to an RFP, sometimes the document has to do your selling for you. We like to emphasize that “a piece of paper never sold anything!” BUT, that piece of paper might be the only thing that can get you in the door so that YOU can make the sale and close the deal. It better be compelling. It has to be easy to read and easy to “skim.” It MUST be mistake and typo free. And it better make the case that you deserve the client’s business. It should incorporate the client’s language and acronyms. Not ours. Most of all, we need to keep our response focused on the client’s desired outcomes and results. Not how great we are!
- Effective Proposal Presentations – Whenever possible we should seek to present our RFP response in person. There might be exceptions due to geography. The client might vehemently forbid it. But the goal should always be to deliver your proposal in person to as many of the people involved in the evaluation process as possible. You need to be able to clarify things that get lost in the written language. You want to read and respond to body language. You’d like to be able to ask a few questions of your own.You might have to negotiate for the right to present your proposal in person. Don’t just assume your client won’t agree. Sell them on why they should take the time and perhaps even make an exception to meet with you in person. Most of all, you need to be able to “close” . . . or at least try to. You may not be able to get signed contract on the spot, but you can, at a minimun, close on their commitment to take the next step in the process with you. Even the best written proposals CAN’T close themselves. You need to be there to ask, “Are you ready to move forward?”
- Pricing Strategies for RFP-Driven Proposals – Depending on the scope of the RFP and the number and nature of your competitors, you’ll need to select a pricing strategy that works for you and your company. Don’t just try to be the cheapest! That strategy is not a strategic advantage at all because any other vendor can eliminate that advantage by simply dropping their price. Set yourself apart by being the best! You need to offer the best product, the best service, the best support, or the lowest risk solution. The lowest cost provider doesn’t always win. So, there has to be a reason to select you besides the fact that you are the lowest cost. Win on your merits at a FAIR price . . . one that you can be proud of and be profitable with.
- Closing an RFP-Laden Opportunity – The most forgotten aspect of winning business by RFP response is a strong strategy and plan for closing. This plan should be formulated before you even begin the process of responding. It should, in fact, be part of the criteria we use to select which RFPs to respond to. We need some access to key people in the buying process. We need to understand their motive and urgency for buying. We need to understand their process for evaluation as well as their selection criteria. Most of all, we need to understand who and what will be involved in the overall decision process so we can develop some relationships and hopefully an internal champion (or two). Without that knowledge and those relationships, we really can’t form a closing strategy at all. The best we can hope for is that someone internally likes our proposal and decides to try to close the deal for us.
- Leveraging RFP Win/Loss Analysis – You win some. You lose some. It’s a fact of life in our profession. But we should use each experience, good or bad, to learn something in order to get better. When you win, find out why you won. When you lose, find out why you lost. Sometimes it’s helpful to engage a different person on your team, perhaps one of your marketing people, to call and ask a series of questions designed to point out exactly what when right or what went wrong. Clients are often more forthcoming with a “third person” asking these questions than with the sales representative they have been working with for weeks or even months.
The practice of responding to RFPs is a complex and arduous challenge. It’s going to take work to get good at it. But more and more companies are employing requests for proposal as part of their buying process for large or long-term investments. Learning to consistently win business by RFP is something that many of us MUST decide to get better at . . . ideally, before our competitors do!