The Lure of The RFP
As the economy limps along, many professional service firms are turning to municipalities and government bids to find work in addition to the work they do with their private and commercial clients. Imagine that you have just received a fed ex package from the purchasing office of a local municipality. It’s a request for you to respond to an RFP. Your first impulse may be to gather your colleagues around the conference table, assign everyone a piece of the RFP, and attack it as if it was the meal ticket to the Promised Land. Is this really the right thing to do?
What are the possibilities here? (1) A governmental agency is truly looking for a solution to a problem and took the time to write the RFP. They need help. (2) A competitor wrote the RFP slanted in their favor for an unfair advantage. (3) A consultant wrote the RFP but has no vested interest in the outcome. (4) The agency is looking to keep their current service provider honest and finally, (5) The agency intends to maintain the relationship with their current service provider but wants some free unpaid consulting.
Do yourself a favor…go back two years and analyze how much time you invested in responding to RFPs and determine how many you won. The answer might be a real eye opener. It should give you a strong indication of how to deal with RFPs going forward.
If you unexpectedly receive an RFP from a governmental agency that is an existing client, it’s reasonable to conclude that your competition may be in the hen house. Receiving an unsolicited RFP from an existing client should set off bells and whistles. This could be an indication you are on your way out. It’s certainly an indication that communication is not what it should be with your client. Start looking for the smoking gun because it may be pointed right at you.
When you receive an RFP, expected or unexpected, you want to get more information. Contact the source. Ask for a face-to-face meeting.
Before responding to an RFP, obtain answers to following questions:
- Why are they going out to bid?
- Who has been doing the work up to now?
- What happened to them?
- How many bidders are there?
- What is the anticipated completion date for the project?
- What has been the agency’s experience in working with professional service firms in the past?
- What kind of financial limitations have been put on this project?
- What criteria are being used to decide which firm will be chosen?
- Who is involved in the decision making process?
- When will a decision be made?
- Who will your project liaison be if you are successful in winning the bid?
- What is the timing for the start of the project?
- What kind of experience is the agency looking for from a service provider?
- Is the final award of the project driven strictly by low price/fee?
- Should you continue in the process if you know that you will not be the low cost provider?
You might want to walk away from the RFP when:
- The client will not provide additional information in response to your questions.
- You can’t meet with the committee/the board…the real decision makers.
- You are forced to communicate through a 3rd party (i.e. a consultant.) and he/she seems to be biased.
- The client tells you that lowest fee will win the work. This could be your worst nightmare.
- You are chasing the opportunity because there’s nothing else to do.
- You know that you don’t have a unique competitive advantage, but you feel you’ll throw your hat in the ring anyway.
- You don’t traditionally respond to RFPs and bid work, but you think today is a good day to start.
- You don’t have any relationship with the originator of the RFP.
- The economic climate suggests that 50 of your closest competitors will also be pursuing the same project.
Do you think you should you have more diversity in your sales opportunity pipeline? Consider the advantages of a negotiated agreement with your clients and prospects in the commercial and private sectors vs. the disadvantages of chasing RFPs where it‘s difficult to influence the outcome and easy to invest a lot of time and money for no return.
Go have your best sales week ever.
Good selling!!
Ken
“When you’re through changing, you’re through.” Bruce Barton
Ken Levine
Impact Business Solutions, Inc.
508-845-8849
SELL MORE BY SELLING LESS
www.ibs4sales.com
