How do you RFP? Save time, effort and money with 7 fresh ideas

The modern day RFP (aka Bid) system involves a great deal of time and effort from all parties involved. There are best intentions from both sides, but the final decision doesn't necessarily achieve the perfect match.

How can this process be improved so that clients really get to know vendors? So that everyone saves time and resource?

This article intends to help clients get a better result from the process. But before suggesting fresh ideas, let’s understand why the existing process needs to change.

Why the traditional RFP process is broken

So what are the main problems of a modern day RFP? The below offers a list of key reasons that drive wastage in time and resources. It’s by no means exhaustive, but these six points are alarming enough for us to conclude that this process can be improved. 

So what’s a fresh approach to an RFP?

It’s no surprise that the aforementioned pitfalls result in decisions that may become regrets. But there is a better way.

After advising many clients on the bid process and writing countless RFPs, I’d like to suggest 7 ideas designed to help you achieve a better result.

1. Start with WHY.

Why are you undertaking this RFP process? What exactly are you looking for?

Selecting a partner is a choice that will impact all areas of your organization in both the short and long term. Partnerships can open your organization to a range of new opportunities and support you to thrive and not just survive. The wrong choice can slow down momentum and in the worst case scenario, put a stop to your entire operation.

So what do you want? Competitive pricing, improved service, better use of technology, access to more opportunities? A new partner to support your ambitions? A new partner to avoid issues experienced in your past?

Whatever your criteria, make sure they are well-defined and prioritized. They’ll underpin every stage in the process from profiling, to RFP questions to decision making.

Also, I’d highly recommend that you avoid this exercise if you’re just doing a routine check. If you’re constantly looking to move from vendor to vendor, there’ll be less incentive to take part in the RFP. Why would a vendor make such an effort to partner with you if you’re just going to seek alternatives in 12 months time?

2. Talk to your market

Clients fall into the trap of seeking vendors who have the biggest brand, largest revenues, and highest number of employees. Truth is, even the most attractive brokers have flaws.

For example, the global insurance broker you know may have the Cyber experts you need, but do they specialise in your industry sector? You’d be surprised by the gaping weaknesses that even the most biggest and brightest organizations have.

RFP exercises should take a carte blanche approach by remembering that "you don’t know what you don’t know". A helpful tip you can use is to talk to your market. Do you have any connections with your peer organizations? Or from an insurance perspective, can you reach out to any insurers? Insurers usually know all brokers well.

The point is, use your peers to your advantage. They can give you a balanced view of who should be brought to the table. Better yet, they may introduce you to new vendors that you weren’t previously aware of.

3. How well do you know the broker?

So you know why you’re doing this, and you have a good idea of who should be involved. But is that enough to get started with your RFP invitations? Absolutely not.

It’s highly recommended that you profile vendors personally – and by that I mean meet them first. What’s the best way to do this and why will it help?

4. Writing your RFP

Now that you've picked the vendors that appear best suited to serve you, it’s time to request a compelling proposal.

Remember, typical RFPs are too long and not specific enough. You also need to respect the broker's time by giving them a reasonable timeframe. Here are a few suggestions:

5. Orals / Presentation

After receiving all submissions you can assess which vendors were the lead performers. I’d suggest shortlisting 2 or 3 vendors for the final stage – the oral / presentation.

For the most part, the presentation should be a straightforward process where all your key needs can be discussed. However, all too often there are two major pitfalls with this stage – timings and expectations.

Clients tend to give vendors a week or so to prepare and deliver the oral. Even worse, the client doesn’t specify exactly what they’re expecting from the oral. As a result, vendors rush to put slides together and present the very same RFP that you’ve already read through.

Avoid this time wastage. Request that the vendor speaks about the areas of most concern to you. Raise any particular questions, concerns or conclusions you’ve found in their RFP response too. Such an approach will demonstrate to the vendor that you’ve taken an active interest in their proposal. It will also empower vendors to ensure their messaging is clearer and more relevant on oral day.

NB: As a bonus tip, remember that some technical specialists aren’t usually the best presenters. Try not to confuse timid presenting with a lack of competency or credibility in their services. Hopefully prior meetings (point 3 above) may have calmed nerves too.

6. Choosing the best vendor

Here’s the difficult part. After all the preparations, communications and quotations, its decision time.

The typical approach is to take out a procurement style score card and evaluate based on general criteria such as ‘service capabilities’, ‘additional services’, ‘team experience’. The problem is that such scoring is subjective and open to interpretation. How can you measure good rapport? How do you really know if service is 10/10 yet? Is a highly experienced team a 10/10 if all members avoid innovative solutions?

If you judge everyone based on a standardised 'exam' system with no specificity, the cream will not necessarily rise to the top. Vendors vary in so many other ways – access to networks, technological advancement, and proven track records. A standardized score card approach can ignore all this. 

Einstein once said “Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid." The same rule applies here.

It’s imperative that we base the decision around our specific needs that we addressed right at the start.

I’m not saying that a score card doesn’t have its benefits, but clients should be sure to refer to their prioritized key criteria when assessing. Remember why you started this process in the first place.

One on hand, key decision makers must put emotions aside to review the most relevant proposal areas while assessing value for money. However, they also need to consider each vendor's social intelligence – accepting that a business relationship is more fruitful with people you know, like and trust.

Overall, asking these four simple questions can significantly help to make your decision:

1. Do they meet your specific criteria in order of priority?

2. Have they evidenced their credibility well enough? Are you convinced?

3. Can they evidence that they can support you to reach your long-term ambitions?

4. Do we know, like and trust them enough that it appears unlikely we'll need to re-do this process soon?

With this in mind you can pick the right broker.

7. Now you've picked, don't just ignore the losing brokers!

Never burn your bridges. I'll repeat that. Never burn your bridges.

Each vendor has given their time, effort and resource to offer you the best they can.

In return, offer them the platform to discuss what went well and where they went wrong. Offer losing vendors a debrief and explain what qualities the winning broker exhibited. This is highly sought after feedback.

You should also encourage losing vendors to keep in touch so that they can spend more time learning about your needs. After all, your paths may cross again in a future RFP, or the vendor representative you’ve rejected could end up employed by your chosen vendor!

Final thoughts

I hope the suggestions in this article provide you with the confidence to run a higher quality tender process.

These tips will give vendors the chance to understand your pain points, driving their proposals to be more relevant and direct. This in turn will make it easier for you to weed out weaker performers and choose the best vendor. 

Finally, as an employee of Marsh USA Inc. I would welcome you to reach out to me if you have any questions. After working with a plethora of Marsh’s broking teams across the US and UK, I can honestly say that our experts really do care about their clients. They go right into the granular detail to ensure their services are best in class, relevant and consistent.

I'd love to put you in touch with them - and guarantee that we can deliver an exceptional and non-traditional RFP!

About the author: 

Krishna Mootoosamy is an ex-Lloyd's of London market insurance broker, student of sales psychology and a 1st class Economics graduate. He serves as a Proposal Manager and Vice President at Marsh USA Inc. collaborating with risk management experts to create impactful pitches and proposals.

References:

• How to achieve the best results from a broker tender, Vimi Savan