Funny thing is….so does everyone else, including the companies that issue them.
At one of our past national sales conferences, we had some key executives from our client base participate in a panel/Q&A session with our sales team. Each one of them expressed their disinterest and hatred for Requests for Proposals (#RFP) – they hate reading the hog-wash plethora of sales pitches and marketing slicks just as much as many of us hate to write them.
So, what gives? Why issue an RFP and go through the process?
Their comments and feedback were insightful. Below are the top 5 reasons why they feel compelled to go through an RFP process (not in any order) – even though they hate them:
- Leverage – RFPs are an easy way to gain leverage and ensure you’re getting a competitive deal with an incumbent. The intentions aren’t really to make a change, but to make sure you’re getting a competitive deal and not being taken advantage of because of long-standing business relationship. RFPs are an easy way to gain leverage with your current provider and keep them on their toes.
- Boredom –For many outsourced products or services, the day to day, quarter to quarter routine can get boring, especially if the current provider doesn’t provide any additional value to the partnership. An RFP is an easy way to learn how the industry might have evolved or changed and just to see what else is out there.
- Easy Way to Say No – Let’s face it…. decision makers get pounded by sales people every day. Some they like, some they don’t….and some executives just have a hard time just saying NO to friendly sales people. Issuing an RFP is an easy way for them to say NO.
- Gain Commitment/Ownership – A decision maker may want to make a change or explore alternatives, but because big decisions are usually made by a committee, an RFP is an easy way to get buy-in from other constituents. A CIO or CFO may be intrigued to make a change but owning the decision to make a change and taking on the personal risk of seeing it fail can be worrisome. RFPs are an easy to get others to buy in and share the risks/rewards of making any change.
- Exploring a Fairly New Concept/Solutions/Service Offering – Nothing is rarely revolutionary….and if it is, very few businesses want to be the first to adopt a new concept, a new solution or service offering. An RFP can help further educate inquiring minds if a service offering or solution really works, and how others have succeeded from it…. RFPs are an easy way to see if a relatively unknown offering can really materialize to actual results.
What do you think? These 5 points certainly created a new perception and perspective for me on RFPs. Notice that none of these reasons were for price! Outside of gaining some leverage on an incumbent, price was not a factor for issuing or deciding on an RFP. If I’m in a situation trying to figure out if we should participate in an RFP as a responder, a new qualifier for me is knowing which one of these 5 points apply to the issuer of the RFP.
Are there any other points that we missed?
Would love to get your feedback as to other reasons why businesses go through the long arduous process of an RFP, RFI, RFQ….and how do you decide if you should respond or not?