If you are in the B2B space, odds are you’ll need to respond to Requests for Proposals (RFPs) from potential customers during your normal span of business. The RFP process is typically filled up with potential pitfalls on the way. This post will hopefully help you learn what those pitfalls are, and more importantly, how to avoid them. RFPs basically construct all the precise task questions and needs of the client in one document, which they send out to numerous competing bidders.
From there, the client will typically thin down all the submissions to a handful of finalists. The finalists will be given the opportunity to ask any relevant questions they have, and the client may also ask additional questions of the finalists, as they compare and contrast the various proposals. A final proposal is then submitted by the finalists, and the client selects their earning bidder to move forwards with. This process may take from weeks to months to complete, depending on the size and complexity of the project.
And, expect business customers to truly have a a lot more onerous process than SMBs, as that often means a procurement division will be involved (as well as the business people needing the perfect solution is). You can’t close sales if you are not aware of the RFPs to begin with. So, you need to recognize all potential customers in your space, and be sure you are on the radar and have to be included in some of their RFP requests.
Also, oftentimes, bigger companies will engage third party RFP process management companies to perform the process for them. So, uncover those alternative party companies that are active in your industry, and make sure you can get on their radar, as well. RFPs can come in last minute often, with a very limited deadline for distribution (e.g., around fourteen days).
The more complex the project, the tougher it is to pull together a thoughtful response in a short period of time. At exactly the same time you are trying to distinguish yourselves from your competitors, be very careful NOT to hand out your “secret sauce” in your response. There are very high chances that the customer will see your specific benefit in your response, and could ask the other bidders if they can do that too.
- 5 years ago from San Francisco
- Reports can be scheduled for automatic emailing
- Lean technology
- Act Human
- Purchase APR: 18.74% (Variable)
Which does two things: (a) educates your rivals on what you do; and (b) gives the competitor the opportunity to say, “sure we can that” do, whether they were or were not likely to in their preliminary response. The additional information you provide in your prices proposal, the greater specific series items the customer can try to work out down. So, as an example, if you are a platform technology vendor, don’t detail pricing for all your various efficiency and features in isolation, line by collection.
Instead, aggregate prices for the platform all together. You want to make it is hard as possible for the client to “turn the screws”, and truly understand your world wide web margin on the task. Understand, your visitors can do everything they can to break out the facts.
So, tread carefully and dig in where you will need to. 39, I composed about the creative art of negotiation. As this post suggests, you need to leave the client room for a “win”. And, that earn typically means letting the procurement division look smart to their boss, with them make a deal further price savings from the initial quote.
So, let’s say you normally like to price your business with a 50% gross margin. Quote at 60% in the RFP, knowing procurement will be anticipating at least a 10% haircut from there through the process. You can find two parts to consider when requesting and responding to questions during the Q&A process: (i) protect yourself; and (ii) make life miserable for your competition. As for the former, all questions asked and answers replied will be distributed to all the contending bidders normally. So, take care not to ask any relevant question, where in fact the questions itself, or the answers therefrom, will help educate your competitor on how exactly you do your work, which may be a unique advantage you want to keep secret.