It seems like it comes out of the blue. Right there, in your inbox, sits a totally unexpected Request for Proposal. Maybe the unexpected RFP comes from a lukewarm prospect you’ve only recently started contacting, or maybe it comes from a prospect you thought had gone completely cold. Heck, maybe it came from a company that wasn’t even on your radar. No matter; there it is, all yours and ripe for the picking. Unexpected, yes, but not unwelcome. After all, it’s a gift, right? One that promises more business, extra revenue, a new client relationship! Before you get too excited and spend lots of time responding to that unexpected RFP, it pays to ask yourself some critical questions first.
Sure, the RFP could lead to great things. But it could also be a huge waste of time and resources that your company has absolutely no – zero, zilch, nada – chance of winning. How can you tell the difference? It pays to look this gift horse in the mouth as you get answers to these questions:
Why Did We Get This RFP?
The unexpected RFP is one from a prospect you have not been actively and confidently pursuing. It is possible, of course, that you received the RFP because of a referral from a client or prospect you have been engaging with over an extended period of time. But it’s also possible (and perhaps more likely) that you were found via a Google search for solution providers in your area and were added to list of recipients in order to increase or diversify the pool of respondents.
If you don’t know why you received this particular RFP, be sure to ask. “Why us?” should be the first question you ask when contacting the company that sent it.
There are other critical questions, too, including:
Why Is This Company Issuing the RFP in the First Place?
Is the company truly ready to change solution providers? Are they committed to changing providers? If so, why? Or are they going through the motions of complying with corporate or other regulatory policies? Or merely applying pressure to their long-time vendor as a ploy to reduce costs or improve terms of service?
If the company is ready to change providers, your company will have a chance (though certainly not a sure thing) to become their new vendor. The same could be true if they are issuing the RFP for compliance reasons. But if they are simply “putting the squeeze” on their current provider, you could very easily lose even if you win the bid. Most likely, however, you are probably wasting your time in responding. So, after asking “Why us?”, don’t be afraid to ask “Why now?”.
What Are Our Chances of Winning This One?
Again, if the company is definitely changing vendors, you have a chance. But if you haven’t been actively pursuing and nurturing this prospect, are your chances really that good in comparison to other RFP recipients who have been courting this company? Think about it from the other direction: if you have been actively connecting and engaging with a key prospect for an extended period and that prospect issues an anticipated RFP, wouldn’t you hope to have a much better chance of winning the bid than someone who hasn’t been pursuing that prospect?
To better assess your chances of winning the bid, you must know how the RFP process will be scored and what criteria will be used to select the successful respondent. If this information is not included in the RFP, ask. This information alone could make it clear whether it is worth responding in full.
Do We Have the Time and Resources to Respond and to Serve?
Responding to an RFP is not a matter of putting check marks in boxes. You must follow the rules established in the RFP itself by responding to very detailed and probing questions. Before you can do that, you must do a lot of research – especially if the RFP is from a company you don’t know well. Then you must get information from your internal corporate departments, particularly those who will be engaged in supplying products or providing services if successful in winning the RFP. And you must make sure your response is in line with corporate policies, compliance requirements and brand standards.
It can take dozens of hours to respond to an RFP. Those are hours that take you off task in other pursuits. What is this “opportunity cost” associated with the time to respond in full? If the RFP was unexpected, and if the playing field does not seem level, and if your chances of winning it appear to be slim at best, is it truly worth the Herculean effort required?
Will It Even Be Worth Winning the Contract?
If the company requesting the bid is seeking a new vendor, presumably that has much to do with price. As a newcomer (if the RFP was unexpected, you don’t really have a relationship with the company yet), in order to win the bid you will likely have to be the low-cost provider. If that’s true, can you make money if you get the contract? It’s possible, of course, depending on the industry and the size of the contract, that a less-than-break-even “win” can get you the foothold you need to be positioned for larger and better contracts down the road. On the other hand, how strong can your position be if the company has the practice of sending RFPs to unfamiliar providers?
At Sales Xceleration, we know the importance of asking key questions so you can operate from a position of informed strength. Questions that can help you establish connections, strengthen relationships, and provide superior service with the significant returns on investment your clients demand and deserve. The right questions can illuminate the path to “yes” when it is clear that a detailed and thoughtful response will put you in serious contention for the contract. But the right questions can also help you learn when the best response is to say “no.”
Realistically, your chances of winning an unexpected RFP are probably slim if you have done little to earn the right to be included in the bidding process and evaluation. Your chances go down still further if you are on the bidder list for compliance purposes or because the company wants to pressure the current vendor into more favorable terms.
You will learn these things if you ask. And if the company refuses to answer your questions, by all means decline to respond to the RFP. If you decline, do it respectfully. Let the company know that you do not feel you have the information needed to respond appropriately. They might just get back in touch with you with information that lets you know that they really want you to bid. If that happens, your confidence level in responding to the RFP might go up. If it doesn’t happen, you saved tremendous time and effort that were better spent elsewhere.
If you would like to learn more about how the proven systems from Sales Xceleration can help you more effectively serve small- to medium-sized businesses, just ask! Reach out to an Advisor today, or contact us at 844.874.7253.