Why you should bin every unsolicited RFP

What is it about RFPs that lures salespeople (and that includes a lot of us who don’t consider ourselves to be “in sales”) like a moth to flame, into a long, costly and possibly fruitless process??

I've just received an RFP...

To anyone in B2B solutions, you’ll be all too familiar with the “unsolicited RFP” - the Request For Purchase that arrives out of the blue.

It lands in your inbox, sometimes as ITT (Invitation to Tender) to prequalify vendors, like you, to bid for a major brand that you’d love to have on your client list.

Trouble is, you've no idea how they heard of you (answer: they found you on Google along with 10 others), and it appears like an opportunity that is purpose-built for your company to win (BTW the 10 others think exactly the same).

I have responded to a LOT of RFPs in my time, and “finished second” is by far the most common outcome. But this is not the Olympics; there is no Silver.

The cruel truth

Here are some things I’ve learned from bitter experience…

1. The odds look really bad. An RFP will pit you against an unknown number of your nearest competitors. The process is supposed to level the playing field, so if there were 5 vendors, you have less than a 20% chance of winning. Feeling lucky, punk?
2. Great answers will not win. This is not a school exam. You will not get 87% and an A+ for smarter answers. In fact, the scores for each question are often this: 0 = does not meet requirements; 1 = partly meets requirements; 2 = meets requirements; 3 = exceeds requirements. Scoring can be subjective. It's a good way of eliminating the weakest vendors, but scores rarely produce a clear winner.
3. A great price will not win. Of course, Procurement will want to get a discount from the winner, so make sure you have plenty of fat in there to keep them happy. But if you are in Column B or C, your ultra-competitive price will only be used to beat up whoever is in Column A. The main reason why you’ve been chosen to progress to the final round is to join an auction.
4. The incumbent will win. There is almost always a vendor that has an existing relationship with the client before the RFP was written. Unless you helped the client write their requirements, you have to assume another vendor did - and they wrote it in their favour, not yours. This means your chances will be far, far worse than 20%. They are they odds-on favourite, and they have to fail massively if you are to be more than a rank outsider.
5. It’s about trust, not technical superiority. Most RFPs are a process to show that the lowest risk vendor has been fairly chosen at the fairest price. A cynic would say it is an arse-covering exercise that make sure no one looks stupid for choosing the wrong vendor. The lowest-risk vendor could have a weaker solution and STILL win if they have an existing relationship (“they are already on our PSL”), they are a known brand (“no one gets fired for buying IBM”), and have great case studies?(“they really understand our business”).?
6. The process does NOT trump politics. It looks like a mechanical decision-making process, but really it’s not. The scoring could suggest Vendor B, the team may want Vendor B, but the executive sponsor could still override them with Vendor A. It comes down to some very human issues. I once lost a deal with a German bank to a local vendor with an inferior solution because “when something goes wrong, Adrian, our CEO wants to shout at your CEO… in German!”. Fair enough.?
7. Hope is not a strategy. The further you get, the more you will believe. Because the RFP process is so controlled, you'll get very little feedback, so anything you do get, is amplified - everything will sound like proof you’re winning. “Woo-hoo, we got through to the next round!” But beware the Salesman’s Fallacy: “The opportunity is so damn big and I’ve invested so much time in it, we can't back out now.” Wrong, loser.
8. No news is NEVER good news. When they “go silent” on you, right at the end, when you’re expecting a final decision, they’re negotiating contracts with your competitor. Once that’s done, they will write to you… “Dear John, whilst we were very impressed with the quality of your response…” Oh boy, second place again.
9. The process favours big companies. The bigger the company, the more staff they’ll have to throw at the pitch. Some even have dedicated teams to respond to RFPs. Their only weakness is price, but now offshoring means they can be cheaper too. All other factors (relationship, reputation, experience, strength and depth) are all weighted in their favour. The only way you can beat the big boys is to go hyper-niche and hope the client appreciates that you will live or die for them.

What should I do?

So, how to avoid burning up like a moth in a RFP flame?

First, qualify the opportunity really hard. See it for what it is. Be honest about your chances of winning. Ignore the fact that it appears to be a slam dunk for you. If you didn’t previously know the client, you have to assume that someone else is in there. Even if it is a level playing-field, you still have to accept that your time might be better spent cold-calling new prospects for a non-competitive opportunity.?

Second, ask loads of questions. At the start, make sure it is super clear what the process is, who is involved in the decision-making process, how long it will take, who has final authority… and most importantly, understand WHY the business is doing this at all? You must find out what the business driver is. It has to be a really strong compelling reason, like it affects the share price or something. Just because there is an RFP, does not mean that the project will go ahead (when major corporate staff are not busy, they can make themselves appear busy with this). The stakeholders need to convince you to invest huge amounts of time and resource, at zero cost to them.

Third, make a go/no-go decision at every sales meeting. Agree at the start of the process, that if you decide no-go, it all stops immediately, no argument. At each stage of the process, decide whether your chances of beating your biggest competitor have improved. If not, no-go. Don’t look at being shortlisted as a win. It’s like a gladiator saying “good news, they’ve taken the monkey out… It’s just me and the lion now”. Do not be afraid to qualify out. It is better to cut your losses early, than continue to play with a bad hand.

In conclusion

RFPs are a fact of life in B2B sales. But see them for what they really are.

If you factor in the cost of sale, plus the cost of all the fails, you may realise that, even if you win, you might be losing.?