Sunday, February 13, 2011

The Science of the RFP

Seems like every sales organization is down on the RFP, otherwise known as a formal Request For Proposal.  These are usually solicited by government/educational institutions, but are not uncommon in the large enterprise space.  The "frown" on RFP's is usually due to the fact that when the rules are formally established before they accept bids, some sales organizations feel as if their power (and therefore, their likelihood to win) are diminished.  Some companies feel that there is too much competition and regulation surrounding RFP's that it's "not worth the effort."  Probably the biggest reason that many companies pass on the RFP process is that history has indicated that they don't usually win.

Let's look at RFP's from another perspective.  While there are more stipulations and regulations for most RFP's, this can also present an advantage to those willing to do some research.  Given the fact that most RFP's are public, an enormous amount of data is just sitting out there, ready to be captured and analyzed.  I've seen several salespeople that have an analytical streak, review the science behind the RFP or solicitation.  Information abounds when it comes to statistical analysis.  Items like:  who usually bids, what did these winning RFP's look like, how does the buyer evaluate and score RFP responses, what are the common positive and negative trends, which buyers adhere to the rules strictly versus a more casual approach, etc.  The list goes on and on.  There's a good argument for bidding on an RFP, even if you know you'll lose.  What if you found a trend that companies that bid on an RFP twice and lost, usually win the second or third time.  Might be good long-term strategy.

Another key factor here is that with today's online environment, much of this information can be found online, making your job easier when it comes to collecting data.  When you think about it, you'd probably do this type of due diligence even if you weren't in an RFP situation.  Great salespeople gather as much information as they can about an opportunity, to appropriately qualify an opportunity.  Why not take the same effort in a competitive bidding environment?

Remember, organizations buy for a variety of reasons and it's not always the lowest price.  This statement has been shown over and over again in the public buying environment.  RFP's are still a sale and there are potential relationships and strategies that can be applied here.  Even quick chats with purchasing agents, buyers and influencers can make that small bit of difference to position your formal response documents.  Just as a note, I'm not suggesting that you can always influence RFP's, nor am I stating that price isn't the primary factor (many times, it is).  I'm simply presenting the fact that RFP's must be more carefully analyzed than the average proposal.

Lastly, while it is generally common knowledge, it's important that all salespeople try to get IN FRONT of any public solicitation.  RFP's are created out of whole cloth.  If you look back in time, there are many months (and sometimes, years) of hard work that goes into writing and budgeting for a solicitation.  It is your job to engage early and often, create a relationship and carefully position yourself for the best outcome.  Good luck!

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