Requests for proposals, or RFPs, are a B2B business fact of life, especially in an age of procurement-department expansion, tight budgets, and fierce competition for B2B service contracts.
Though some people may feel the urge to run for the hills when a new RFP hits their inbox, I've come to appreciate the value of the RFP process—both the issuing of RFPs and responding to them—because RFPs have been a huge part of my livelihood for the past 15 years at my company.
The RFP process is necessary for finding suppliers that will best serve your business goals. Going through that process can be tedious, but it helps ensure both identification of vendors that will give you the best value for their service and fair selection.
Some RFPs might be 50-00 questions. "Who has the time to write 100 questions?" you might ask. "And who has time to answer them?" Those who understand the profit of their company is on the line, that's who.
Painful as the process may seem sometimes, the reality is that RFPs aim to help both parties have a successful business partnership.
Here are some best-practices to ensure your company gets the most out of the RFP process.
How to Write an RFP
It's just as important for the issuer to spend time writing an RFP as it is for the vendor to spend time on the response. Whether you're a Fortune 500 company or a local business, real dollars are on the line. Hiring the wrong vendor can cost valuable customers. Hiring the right vendor can make your profits soar.
If you're issuing RFPs, here are some RFP best-practices:
- To provide context for the vendor, start your document with an executive summary of your business goals.
- Ask thoughtful questions that will prompt thoughtful responses. Avoid repetition and stock questions to ensure the vendor's responses will better demonstrate how its capabilities provide real solutions to your exact business situation.
- Never simply take a previous RFP from another procurement effort and find/replace product names. The most effective RFPs are customized to match the specific business need.
- Thoroughly proofread your document, and have internal stakeholders vet or do a mock response to it to make sure it elicits the results you are looking for.
- If you use an online RFP tool, allow options for the respondents to attach expanded answers or supporting materials.
- If RFPs are frequent or complex, consider hiring a source management company that specializes in this process.
How to Write an RFP Response
While you are spending precious time responding to an RFP, so is your competition. Here's how yours can secure a place at the top of the pile and earn the in-person time with the issuer that solidifies a business deal:
- Read the document once, read it twice, and then re-read it again. It is imperative to closely read the guidelines and documents closely to ensure that you address how to best align your team members' experience with the company's values.
- If the process allows, provide a thoughtful, professionally written executive summary that addresses how your business offers the best solution.
- Don't limit yourself to the word count in contact forms if you don't have to. Ask the issuer whether they will accept attachments to online forms so that you can explain on how you can best serve their needs.
- At the same time, don't write words just to fill space. Keep your response as concise and clear as possible. Think about the number of RFP responses the potential client may be reading. You may have a 20-page limit, but if you can provide a strong response in 16 pages... do it!
- Never just find/replace words and recycle or reuse stock answers. You must be more thoughtful if you want to stand out; if you can't tailor your responses, don't invest the time in that particular RFP.
- Proofread your document rigorously. You are under the microscope here.
- Submit your response on time and in the requested format. However, it's acceptable to ask for a reasonable deadline extension if you don't believe the issuer provided enough time for you to compile thoughtful responses; in most instances, doing so is an option.
Before you take the time to submit an RFP response, it is critical to do your research and analyze whether your company is in a position to take on a new client. Without a thorough analysis of the new client's needs as well as your own business capabilities, you may enter into an agreement unprepared.
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The bottom line is that RFPs are tough on both issuer and vendor; but, if carried out correctly, both parties can benefit from the new business venture.
For more information, I suggest checking out the Association for Proposal Management Professionals.