The purchasing agent from a very large national company called me to ask whether he could send me a request for proposal. He had visited my company’s website and thought we’d be a good fit.
“I’m sorry,” I responded. “I’m not sure we’re right for your RFP. Would it be OK if I ask you a couple of questions first?”
With his consent, I followed up. “You’ve had the same partner for 15 years. The firm you use now is a good company and does a good job. Why change?” I asked.
The purchasing agent replied, “They have been a good partner, but lately we’ve been unhappy and want to try someone else. We are going to move a big part of the business.”
I shot back: “We are a very small company compared to the companies on your partner list. Even if I completed the request for proposal, there is no way you’d consider us.”
He deflected my argument, saying, “We’re looking for some boutique players who’ll give us what we want, and you meet our needs perfectly.”
I presented one more objection: “There’s no way I can win. We’ve never met the people making this decision, we don’t really understand their needs, and our response to your RFP won’t make sense to them.”
He won me over by saying, “I can get you a meeting with the team making this decision. If I do, would you complete the request for proposal?”
“Yes,” I said. “That sounds great.”
When You Shouldn’t Compete…
Without careful questioning followed by an analysis of the responses, you can sink valuable time into an RFP when you never had a chance of winning the business—frequently one of these two situations:
• The game is rigged. Requests for proposals sound like invitations to explore doing business together, but most of the time they aren’t.
Usually one of your competitors has already developed a relationship, already helped shape the client’s needs, and already positioned itself to win. We call that “writing the A-column,” an acknowledgment that the first column in the proposal spreadsheet—the one listing the criteria that each competitor will be measured against—was written by the potential provider with whom the client has an established relationship.
Often the request for proposal is a way for the company to make the bidding process look fair when it is anything but. You mistakenly believe you have a shot at the contract when the only real value you create is providing the necessary cover to make the process appear open and competitive.
• You’re a bargaining chip. At other times, the company seeking your RFP is dissatisfied with its present supplier and wants to use the RFP as a tactic for pushing that provider to fix what’s broken and cut prices. You’ll fill in the blanks with your products, services and prices, and the requesting company will use it as leverage for concessions.
So bidding for business under those conditions is such a poor bet that many companies won’t even bother responding to the RFP.
…And How to Know When You Should
To be sure an opportunity really exists, follow these four steps:
1. Verify that the company is making a change. In the true story that begins this article, I pushed back. There’s no reason to complete a request for proposal that you have zero chance of winning. Call the person handling the RFP and ask him or her why the company would change. Ask what is making company leaders unhappy enough that they want to fire their current supplier. If you hear “they just want to see what else is out there,” you’ve learned the company is merely shopping for a lower price from that supplier, so you’ll probably want to pass unless your pricing gives you an edge.
2. Ask to level the playing field. Tell the person handling the RFP that you don’t believe you have a fair chance. Say that you must meet with the decision-makers and spend enough time with them to fully understand their needs. Point out that the incumbent enjoys the benefits of deep knowledge and access by having worked with them for years. By explaining how these disadvantages cripple you, you create the opportunity to correct them. If they play ball, then you do. If they balk, you should decline.
3. Request what you need. Much of the time an RFP provides only basic information about what the buyer needs in an attempt to commoditize what you sell. Then once you are being considered, you find out you’re competing at a price point that doesn’t allow you to deliver what the company really wants. If you lack the information you need to develop the right solution and position yourself to win, then insist on receiving it or opt out. Don’t behave like a commodity if you don’t want to be treated like one.
4. Be willing to walk away. You don’t win many requests for proposals. No one does. Most of the time the company soliciting your RFP input stays with its current provider. When it does change, the lowest-priced provider usually wins. You don’t risk nearly as much as you think by pushing back and trying to create a real opportunity. Your willingness to walk away empowers you to have this conversation.
In my experience, companies that fill out requests for proposals actually win the business only 15 percent of the time—unless they take the four actions above. If you are willing to both ask the hard questions and walk away from circumstances in which no real opportunity exists, you increase your winning percentage by getting into games where you have a chance of winning and because you differentiate yourself and your company.
How did we make out in the story that started this article? The purchasing agent gave me the appointment. I met with the decision committee and discovered the members’ real needs. My team and I won the request for proposal, and we’ve been added to this big client’s partner list. None of that would have happened without asking the tough questions upfront.
This request for proposal worksheet helps you compose the questions leading to the crucial answers to compete effectively (or to bow out if the client is merely tire-kicking).
1. Determine whether you should play. Why are you receiving the request for proposal? Are you in front of the opportunity because you’ve developed a relationship with the client? Or are you merely column fodder for the RFP spreadsheet?
2. Position yourself. What must you do to position yourself to win? Identify the steps (with early steps being especially crucial) you normally take to win an opportunity and be ready to move forward. Later you’ll use this as a checklist, taking the prospect through each step.
3. Determine what you need from the client. Make a list of the information you need to compete effectively. Make a list of the people you usually need to meet with to win. Prepare a list of the questions you need answered.
4. Justify your request. How does your request help your client reach crucial goals? How does giving you what you ask for help you create more value for the client?
5. Make the call. Ask for what you need. If the request is refused and you don’t believe you can do anything to position yourself for a win, it’s best to walk away. But if you still think you’ve got a chance and do turn in a response, the act of making your request has already positioned you differently in the prospect’s mind.