RFPs, or Requests For Proposal, are a salesperson’s nightmare; they’re a tool designed to take salespeople out of the equation. Their use indicates that the prospect’s buying decision is being driven purely by accounting or finance. RFPs take a significant amount of time and effort to complete, and the return on investment usually doesn’t materialize. At least, that’s how it was until now. Let me show you the best way to handle an RFP and increase your chances of getting that sale.
Before diving in, I’d like to clarify one point: this article deals with RFPs that have come out of the blue. If you were able to influence the RFP as it was being created, you’re in an entirely different situation. While some of the points here can help you as well, it’s focussed out for the former situation.
The evils of RFPs.
As I stated in the introduction, RFPs are designed to remove all human interaction from the equation. They are especially devastating to companies who sell on value, since this is impossible to do in these circumstances. I always preach building relationships, and RFPs are by definition the antithesis of that.
The biggest drive for a company to release an RFP is usually cost. RFPs are there to bring every single factor you sell on down to a feature and function comparison. This is usually bad for both parties:
- It’s bad for you since purchases made on feature/function comparisons usually end poorly, and
- it’s bad for them, since they don’t have access to your expertise, especially for avoiding pitfalls.
With reference to point 1: I wrote this with two key factors in mind. Primarily they end poorly because the prospect’s company lacks the level of expertise that’s present in yours, and will usually overlook significant factors when making the purchasing decision.
They are seeking to address a set of issues they have now, and aren’t interested in whom they are partnering with. Companies that are purchasing via RFPs are usually failing to plan for the future, which is the second key reason they usually end poorly. The myopic view of price as the sole deciding factor (as in, “how many features or how much functionality can we get for this price?”) tends to bring with it a disregard for planning for the future.
Before any further steps, you should give due consideration to whether you should answer the RFP at all. The close rates on RFPs are usually tiny, especially if you keep to the process described therein. The workload is significant, and will require hours of your time, at a minimum. Before jumping into it, think about whether the relationship or cooperation with this particular company is worth the time you could spend making wins elsewhere.
After you’ve made this decision, and before you do anything else, read through the RFP and answer the following questions for yourself:
- Do you have relationships in place that could facilitate this process?
- Is your company a good fit to theirs in terms of values?
- Is your product a good fit?
The first points is key: if you don’t have any relationships there already, your job will be that much harder. If your company aligns well with their values and vision, you will be better able to position your product against the competition. Finally, make sure that your product can do a majority of the things they are seeking to accomplish; if you can’t, it will be difficult to convince them.
Ideally, you’ll want to hit all 3 of the points above. If you can’t, take them in order of importance and hit two. If you can’t do that, you might want to sit this one out; you’ll have more success closing other deals in the time it would take to lose this one.
First steps: rules and relationships.
RFPs are usually full of rules: you shouldn’t contact them, you shouldn’t call in, you shouldn’t do any number of normal sales activities. To this, I say go ahead and break them. Those rules are there to minimize disturbance to their staff during the process, and that’s fair enough. However, the moment they stop you from being able to fulfil the requirements they set out for you, you will have to break one or two.
The first thing you should do after you’ve decided to take on the RFP is to activate your relationships there. Reach out to them, and discuss the RFP. You’ll probably want to know the importance of the project for them, the impact the RFP is likely to have, and the parties involved. The key thing is to find out what they’re hoping to achieve in the long run, as this will become important later in the process.
If you don’t have any relationships there, you’ll need to build them, and fast. Ideally you’ll want to reach out to those decision-makers you’d normally speak with, and ask them about the RFP. This is necessary for you to do your job, and you may find that these transgressions of the common rules are generally taken lightly or forgiven. As above, you’ll want to discover the salient points and their future plan.
Discovering this information without calling in is usually also possible, but it’s stronger if it comes directly from them. You’ll make sure you understand the RFP perfectly, and they’ll know you’re taking it seriously.
Change the playing field.
Once you’ve understood the RFP and know where they want to go, it’s time to go a little further afield. You’ll want to answer their questions, sure, but you’ll also want to frame it properly and put it into the right context. For example, if you’re selling towards a vision, make sure you elucidate that here.
Don’t be afraid to change the formatting somewhat to accommodate your points. As long as you’re answering their questions, you’ll be fine. All you’re doing, after all, is providing some context for them. If you have additional relevant points they’ve missed, include those as well, along with your answers to those. If you know that certain points usually matter more than others, don’t be afraid to highlight them and explain why you did. Add value to their RFP and you’ll be doing both sides a service.
Open the door.
By this point the work you’ve stuck into the RFP can probably be counted in hours if not days. You’ve invested a significant amount of time in it, not only answering their points but also adding your expertise and real value. The best way to return the RFP to them, then, is via a meeting.
Pitching this meeting can be delicate; they’ll probably have quite a few answers to get through. Make sure you highlight the value you can bring as an industry expert, as well as the context you’ve placed your answers within. It’s rare that they turn down a meeting; after all, it’s only an hour or so, which is peanuts within the greater scheme of the RFP evaluation.
Close the deal.
The meeting is your ticket to closing the deal. Not only do you know their requirements and requests, you are also aware of their long-term goals through the relationships you’ve built up. If you haven’t managed to do the latter, you can use the meeting to do this, and build a vision for them.
My preference in these kinds of discussions is to paint a vision. They have very real issues today, and these shouldn’t be ignored. However, once these needs are met, the company will move on. Rather than just meeting the needs, show them how a cooperation with your company can succeed in the long run.
While RFPs can be a bane of your sales existence, they can also offer the possibility to reach beyond the baseline requirements toward larger deals. They have the potential to open doors and build relationships, and, if you decide to step up your game, they can certainly be closed as deals. Just make sure you’re selecting the right RFPs to go after, and aren’t stacking the deck against yourself.
As ever, I wish you all the best!
Do you agree with what I wrote here? Disagree? Did I miss something? Could I have done something better? Please let me know in the comments!