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Topic: Customer Behavior
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This question has been answered, and points have been awarded.
Why Did We Lose Out On An Rfp
Posted by Anonymous on
2/15/2005 at 12:43 PM ET
We often receive requests for proposals. They are labor intensive. On a "blind" proposal we sometimes do not get to the final round. It is important to understand WHY but the prospective client rarely will give a reason. How can we get this critical information?
Den E V
2/15/2005 at 1:21 PM
Have you analyzed your win rate on unsolicited Requests for Proposals (RFPs)? Your number of wins for unsolicited RFPs is most likely zero. Your goal should not be to respond to RFP's – Your goal should be to write RFPs.
Why are you losing RFPs? Have you done your homework in this area? Is it because you are losing to competitors? Is it because the RFP has been placed on hold? If you do research I’d bet that you are losing 80% of these opportunities because the companies soliciting bids decide not to make any decision! – And don’t award the business to any vendor! They’re looking for an education and they don’t want to pay tuition.
Why else are RFP win-rates low? Most RFPs are written with a specific solution or vendor in mind. In these cases it is that very vendor or solution partner that wrote the RFP. It is no surprise that these vendors have an advantage over anyone who received the RFP blind. Bottom line: Why bother responding to someone else’s specs?
More reasons why blind RFP might be a waste of your time:
(1) Lack of business challenge. With no business connection, RFPs get lost in the sea of more important business priorities & initiatives of actual decision makers.
(2) Net Zero Value. Happens when the impact that the RFP on the business has not been quantified with an achievable ROI thereby convincing decision makers not to spend the $$$.
(3) Zero Power. RFP's are delayed because RFP handlers can't get access to the real decision-maker; this is the person with the authority to spend the money.
(4) BIG Opportunities are BIG Risk. The bigger the RFP, the bigger the risk of change, the lesser the chance of implementation, the lesser the chance of closing the business.
If you do decide to respond to any RFP you need reasonable incentive. Ask for a meeting. Request a meeting to discuss the business challenge the RFP addresses? How much organizational gain is expected from this initiative? Who is championing this initiative? Can you meet these individuals too? What ROI (if any) are they expecting? and What areas of risk they anticipate for implementation? You get the picture.
2/15/2005 at 6:42 PM
Business-to-Business pricing in general, and RFP's & RFQ's in particular provide rather unqiue challenges.
I tend to concur with the comprehensive reply posted by elliemk, and would like to offer some suggestions to address her comments:
1. If the RFP/RFQ asks you whether or not you comply, reply with 'partially comply'. Chances are, the company will want to know why you only partially comply, and straight away you have the opportunity to shift the focus from price to quality and your unique value proposition;
2. Price will be one of, if not THE criteria upon which a decision is made. But where most companies make their money in these sorts of transactions is on "contract variations". So make it water-tight exactly what you will do at exactly what price, any deviations from which will be subject to re-pricing.
Hope this helps
2/15/2005 at 8:19 PM
Why concern yourself with WHY you lost ... seek to get the &$% bid in the first place. OK, how?
Assuming you can reach them, ask the person issuing the RFP,
"Let's suppose you got the PERFECT RPF back . . . what would it say?"
You'll find that this reveals their true 'agenda' . . . be it specific performance capabilities, experience, price, or 'whatever'. But then . . . and only then . . . can you produce an RFP that will ALIGN with their expectations. Or, you might have to decide that you can't do that and just move on to more productive issues.
I coach people who do respond to RFP's and the general rule is, "If you don't know you're getting the business BEFORE you reply, you probably aren't the one who's getting it".
What you really want to do, as has been alluded to already, is talk with the source of the RFP. You want to engage them. Learn what they're seeking. Hopefully, you can help them draft / craft the RFP so that only you and your firm can respond effectively.
Hey, it's funny how often that's the way you get the business. Shooting 'blind' is for suckers. Sorry to be so blunt, but you seem more than capable of dealing with reality than most.
I truly hope this helps.
2/15/2005 at 10:47 PM
Some very good insights and thoughts here. The thing I'd add is that when you really ARE on the short list for a project, you can often stand out by actually starting the situation analysis and presenting it as part of your proposal. That really impresses clients and suggests you'll go the extra mile for them.
Of course, this requires that you develop a relationship and put in some serious time/effort on spec. If the project is big/important enough, those are good things to do anyway.
2/16/2005 at 9:06 AM
Great advice above...
... but what are you doing to create customer needs IN ADVANCE of RFPs? Do you have unique capabilities? If so, can you educate prospects so that they include this capability in their RFP?
per Den EV - ask for a meeting before - BUT ALSO ASK FOR A MEETING AFTERWARDS. Let folks know on the front end that you will do your best to be responsive, but if you bid and are not accepted, you would like to know why, so that you can be more responsive in the future.
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