How to Respond to RFPs – Putting Value Back into the Process

August 10, 2011 — Leave a comment

Vegas Shot from the RIO

In a recent executive coaching meeting, the subject of RFPs came up…this is a common issue for both resellers and technology manufactures – one worth addressing here…

The confusion comes when we try to relate this to the sales strategies I’ve described over the past several months.  The four things buyers buy – is this operational efficiency, risk mitigation, return on investment or competitive advantage?  Creating an effective value proposition means selling to the 95% who don’t know they have a need, but this person seems to know all about their needs.  Am I coming up with one of the four things or is the client?  How about the four meetings I’ve written about?  Which meeting are we in – where are we entering the sales cycle?  All of the rules suddenly don’t fit.  How about the fee setting rules; is there a way to value price this request?

The request is almost always initiated by an influencer – someone without liability, so where is the urgency?  In my 4 meeting sales model, it isn’t until meeting three that you would be discussing budget, and that would happen only after value has been demonstrated and quantified with asset owners.  Fees discussions usually take place by phone after I review the client’s exact needs and pin point exactly what we are going to deliver- at this point I am looking for a verbal agreement.  Without a verbal, there is no written proposal in my world.  So now, in this new situation, you can see we have violated almost every rule.  We are taking a request from an influencer, bypassing the value proposition phase  with asset owners, eliminating any type of discovery or assessment, and now we are sort of working with an influencer to discuss price –  the wrong person; and way before any value has been established.  It doesn’t make sense because it isn’t a good way to buy or sell.  In most cases you will lose this sale to the person who was chosen before the RPF was ever written!   And the client will end up with something that doesn’t really meet their need.

Here are a few rules I follow to keep this from happening.

1. I understand RFPs are written, usually because the influencer is required to get competitive quotes.  Remember, influencers have needs, and staying within budget isn’t one of them.  Given the chance, I  thank them for the opportunity, and then work to get a meeting – my hope is to get a meeting higher up, either now or in the near future, but before I write anything.  At this stage, I am looking for the true needs of my buyer, working to meet them if possible some some creative alternative.

2. The winner has already been chosen in most cases – knowing this, I also know it will be an upset if I win, therefore we need a strategy that upsets the entire process.  This usually requires convincing someone internal to the process, that they won’t acheive their desired results if they continue with their current approach.  Luckily, RFPs have a poor track record of delivering the desired results, so this isn’t .  Showing up with some case studies helps reinforce this point in the mind of the buyer.

3. REFs strip out the value differentiation of mine and any competitor offer, other than price.  There’s no reason to continue unless I can convince someone to take a look at my value – which is always my intellectual capital, not my price.  Rather than spending 40 hours on a response, I spend my time trying to connect with the buyer on this topic.

4. If all fails, I am ready to walk.  But always on good terms.  There’s no reason to upset those who truely believe they are doing the best thing for their company, or simply following what they have been directed to do.  Instead, leave on good terms, with the buyer wishing you had responded, but wondering why you did not.  There may be a future opportunity in the form of a rescue mission if things don’t turn out as expected.

© 2011, David Stelzl

 

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