The RFP from a whale prospect lands in your in-box. What do you do next?
Most salespeople get excited, tell their boss that all their hard work cosying up to this company’s middle management and procurement team has paid off. They’d spend a day or two reading through the tome that reminds them of War and Peace, written by an 8-year old lawyer. Then they’d get the team together to plan who was going to do what. Much resource would be thrown at meeting the unreasonable deadline set by the “prospect” … but not much actual thought.
They wouldn’t ask some fundamentally important questions; questions to which answers are imperative to decide what we do next, because NOT ALL RFPs ARE LEGITIMATE! In fact, most aren’t. Most are an attempt to get free consulting from vendors too scared, excited, lazy or stupid to check if the RFP is even real.
Consider these questions…
- How did we make the list for receiving this RFP?
- How many RFPs were sent?
- What do we know about the prospect’s history surrounding RFPs?
- Do they have a preferred supplier list (PSL) and are we on it?
- If not, do they always give the business to someone on the PSL?
- If we decide to participate, what happens next?
- What role, if any, will their incumbent supplier play?
- Will the low bid be the one that wins?
- What results is the prospect company hoping to achieve by implementing the contents of the RFP?
- Why aren’t they doing it in-house?
- Is the timescale realistic?
- Do we understand what caused them to go to market with this RFP? DO we understand the different drivers and centres of dissatisfaction?
- Do we have a sponsor, coach or advocate in the prospect company to whom we can submit a rough draft, have it critiqued to make sure we have identified their priorities and covered all the issues they consider most important?
- Are they high enough in the company to be able to provide us with the answers we need or just the ones they are willing to give any vendor?
- Should we involved our senior management?
- Have we identified to whom the prospect’s decision-making committee already has allegiances by suing our personal networks, trawling through LinkedIn and the internet to see what connections they have to our competitors and the incumbent?
- What is the likely cost of sale to participate in this bid, win or lose?
- Is this even legitimate?
- Can we win it?
- Are there any conditions that we do not qualify against that will preclude us from winning this e.g not ISO9000 compliant, no sector experience and sector experience is a must have, we don’t have 3-years accounts, they want to use their T&Cs not ours, our non-negotiable payment terms are unacceptable to them?
- Do we want to win it?
- What opportunity cost will we incur if we plough time, money and resources into this bid and is there a better way to invest our scarce and valuable resources?
- Is this RFP going to be profitable if we win it? By when?
Once you have your questions clear in your mind, are you allowed to speak to someone, not in procurement or a technical buying capacity, at a high enough level to understand the business drivers behind this RFP invitation?
Given that RFP responses are usually the second highest hidden cost in any selling organisation after wrong hires the killer question you need to answer for yourselves is:
- What are our chances of winning it?
- Should we participate in this RFP process?
Take the emotion out of RFPs and never lift a finger until you have done your research and picked up the phone.
A simple rule of thumb for management to eliminate wasted effort and falling into the free consulting trap is that selling the opportunity internally should be twice as hard as selling it to the prospect.
Live by the principle that you should do less but better on purpose.