The traditional RFP at its best only results in half a loaf when awarded. It inherently sets both organizations up to fail.
A Brief Look Backwards
The Request for Proposal (RFP) process serves as a structured approach in organizational purchasing endeavors with an aim toward fairness. In this process, the professional procurement manager assumes the role of an intermediary, facilitating the interaction between the organization and potential suppliers.
The underlying principle of the RFP process is to "level the playing field" and mitigate the risk of human bias or favoritism when acquiring products or services. Through this method, organizations seek to ensure that all vendors have an equal opportunity to compete for business.
In practice, the procurement team employs a scorecard to evaluate numerous factors presented in each submission. These factors typically encompass aspects such as pricing, quality, reliability, and compliance with specifications. By employing a systematic evaluation process, organizations aim to make informed decisions about which supplier best meets their technical requirements.
While the intentions behind the RFP process are noble, its effectiveness can vary depending on several factors. Challenges such as subjective interpretation of evaluation criteria, inadequate communication between stakeholders, and limitations in assessing intangible aspects like cultural fit or innovation potential may hinder its success.
Despite its limitations, the RFP process remains a widely adopted approach in procurement due to its ability to provide structure and accountability. However, I believe that organizations should refine their procurement practices to ensure collaborative engagement, compatibility, and cultural alignment with their strategic objectives.
The Missing Compatibility Factor
As a professional seller for many years, I am not a fan of the RFP. Especially not for complex service offerings that create long-term contracts, as opposed to more transactional sales. Still RFP’s have become quite dominant across many markets, and therefore unavoidable.
My issue is with the impersonal nature of an RFP, which removes any way to determine compatibility between organizations. Compatibility is essential to building a long lasting, mutually satisfying partnership. Another missing link is exploring if individual cultures are in sync. Absent these two elements deems the newly hired company as an “outsider.” This hardly seems a smart way to serve either organization.
An RFP process is time-consuming and costly, for both the solicitor and the responder. According to the key takeaways report from Gartner’s CEB Sales and Marketing Summit, only 17 percent of a buyer’s time is spent meeting with potential suppliers. The report also reveals that in B2B purchasing, 67 percent of a buyer’s time is spent on internal discussion and research. This supports the point that compatibility is less of a focus. The seller should not look at the “bidders conference” as an opportunity to build a relationship or explore compatibility. This group Q&A setting not a place where this occurs.
Takeaway: The reality is B2B is conducted between people. The strength of the relationships is fundamental to long-term success.
To Bid or Not to Bid
As a seasoned professional seller with extensive experience, I have reservations about the RFP process when applied to complex service offerings with long-term implications. While RFPs have become prevalent across various markets, their impersonal nature detracts from the essential elements of compatibility and cultural alignment necessary for fostering enduring partnerships.
Moreover, the time-consuming and costly nature of the RFP process poses challenges for both solicitors and responders. Research from Gartner's CEB Sales and Marketing Summit highlights that a sizable portion of a buyer's time in B2B purchasing is spent on internal discussions and research, with only a fraction devoted to meeting potential suppliers. This imbalance suggests that compatibility considerations may not receive the attention they deserve within the RFP process.
Furthermore, the pressure to provide the lowest price in competitive bidding scenarios often leads to a race to the bottom, where vendors may compromise on quality or scope to secure the contract. This "shaving" of services can undermine the success of the project and strain the relationship between the parties involved. In such cases, no one truly wins, and the organization may find itself compelled to repeat the RFP process, further exacerbating time and resource constraints.
When I became a sales leader myself, I developed an RFP Qualifying Tool that caused us to evaluate every bid on certain measures. One criterion was whether the RFP allowed for connectivity to the C-Suite and key-decision makers. If it did not, this was a “demerit” against the ultimate decision to participate in the bid, or not.
Takeaway: The nature of the "arms-length" RFP detracts from the essential elements of compatibility and cultural alignment, necessary for fostering enduring partnerships.
The Collaborative Solution
A few years ago, I coined the term Collaborative Solutioning to describe my approach in selling. It is foundationally in sync with "Servant Leadership" a style I adopted over the years when leading others. Conceptually, this style is about investing yourself in serving others.
Collaborative Solutioning revolves around two crucial elements:
1. Building Trust: Prospects must trust that I am genuinely committed to mutual success, rather than solely focused on making a sale. Establishing authenticity and asking meaningful questions are foundational to Collaborative Solutioning. It requires a deep understanding of their situation and challenges to effectively collaborate.
2. Providing Value: I strive to be a valued resource and professional in the eyes of prospects and clients. This entails sharing relevant insights and maintaining up-to-date knowledge of business developments in the markets I serve. By being their eyes and ears amidst the whirlwind of everyday business pressures, I aim to be an indispensable information provider.
Now, you might be wondering how this relates to "arm's length" RFPs. Allow me to clarify. To succeed in this approach, make it a priority to establish yourself as a known entity within my targeted organizations and to be top-of-mind before an RFP is even released. This proactive approach is especially beneficial when I embody the two elements mentioned earlier. By achieving this goal, I position myself far better than if I were to respond to the RFP completely cold, giving me a competitive edge over my counterparts. Would you agree?
What You Do To Improve your RFP Win Rate
When dealing with the impersonal nature of RFPs, there are several strategies you can employ to position yourself for success:
Relationships: Pursue creating relationships with targeted prospects outside of the RFP period.
Qualify: Have a tool that assists in determining fit and the odds of winning. Be selective in where you play.
Personalization: Avoid using cut-and-paste templates that are not fully customized to the prospect. Take the time to personalize your writing wherever possible to demonstrate genuine interest and understanding.
Provide Evidence: Back up any performance claims you make with statistics or concrete evidence. This helps build credibility and trust with the RFP review team.
Conciseness and Clarity: RFP review teams often consist of multiple members, and achieving consensus can be challenging. Given today's short attention spans, aim to be clear and concise in your responses. Avoid using overly salesy language and focus on delivering value-driven content.
As a sales leader, it is crucial to prioritize quality over quantity when it comes to opportunities in the pipeline. This takes courage. Rather than simply aiming for more opportunities, ensure that your team is pursuing better opportunities that have a higher likelihood of success. Implementing an RFP Qualifier can help assess the viability and potential “win-ability” of new business opportunities prior to adding to the pipeline.
A sample RFP Qualifying Tool is available on my website www.leverage-experience.com.
Conclusion
The RFP process is here to stay. Hopefully the process will improve. While intended to create a fair bidding environment, often overlooks the critical role of human interaction in fostering compatibility between organizations.
Takeaway: Removing meaningful human interactions from the equation is akin to eliminating dating from a courtship—it undermines the foundation of a successful partnership.
It is essential to carefully qualify every invitation to bid. Consider whether there is an opportunity for meaningful engagement or if it is merely a price-check exercise. Do not hesitate to decline opportunities that are a price-check, and do not align with your Ideal Client Profile. After all, not all business is good business, and maintaining integrity in your partnerships is paramount to your reputation.
ABOUT THE AUTHOR
Ed Snowden, Consultant
Leverage Experience, LLC
Ed brings over four decades of invaluable experience gained from working with two Fortune 500 companies. Throughout his career, he has been involved in various facets of business, including sales, account management, client retention, and leadership roles spanning from entry level to officer positions. Ed is renowned for his exceptional skills in building strong customer relationships, mentoring others, and exemplifying a servant leader style.
Today, Ed leverages his extensive expertise to provide consulting services to companies of all sizes, ranging from large corporations to small businesses. To learn more about Ed and the valuable services he offers, visit his website. Feel free to schedule a discovery call with Ed.
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