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RFP Strategies

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The Enterprise Selling Group

No matter what you call it, RFP, RFI, or RFQ… the success rate for winning unsolicited requests for proposals are dismal. If a buyer sends out 10 bid requests for an RFP, statistically each vendor only has a 1 in 10 chance of winning. That’s much worse than a normal 1 in 3 win rate for most line items on an average sales rep’s forecast.  But if the RFP is rigged for a single vendor, then all the other vendors have zero chance of winning.

So, back to the question, do you bid? I’ll say it depends. I’ve helped many companies improve their RFP win rate, usually very dramatically. But the strategy is very heavily dependent upon knowing which RFP request to ignore. The best way to ascertain if you should walk is to test the RFP. Here are a few of my favorite test points:

Posture

“As the leader in an industry that is growing dramatically, we don’t have the luxury to respond to unsolicited RFP’s. If you would like to evaluate our solution for your needs, we’ll need to engage in a dialog about your business in a more direct manner.”

One of the best methods for increasing your win rate and reducing wasted sales cycles on unwinnable RFP’s is to posture you way out of the process altogether. Although ideal, this strategy usually only works for the leaders in an industry and has to be truly aligned with a buying frenzy.

One of my clients recently hosted a prospective CIO customer during a headquarters visit. After the VP of Sales gave a very energetic overview, the CIO implied that the next step would to tender an RFP for response. The VP of Sales responded with a solid posturing strategy, “As you know, our technology is in the perfect storm of opportunity, market leadership, and high growth. We don’t do RFP’s, we can’t afford to.” The CIO responded, “Yeah, I can see your point. OK, we’ll skip the RFP and go direct to an evaluation phase.” That’s how posturing is supposed to work.

Test their Resolve and Intention

Of course, not everyone is a market leader in a perfect buying storm, and when a quota has to be met, every opportunity should be evaluated. (Notice I said evaluated, not pursued.) I suggest a series of tests to determine their intentions about your solution and to improve your position should you decide to pursue.

The Shadow Story

I worked with an experienced sales management professional who had a saying, “An RFP is the shadow of the story.” What he meant was when you receive the RFP it’s focused on the requirements. What’s missing are the reasons behind the RFP. What unresolved business issue is driving the RFP? What specific people/process/technology challenges were linked to each solution requirement? How big are these problems in terms of money, lost opportunity or other value proposition?

The first place to test an RFP is to ask the prospect if they can share the story behind the RFP. If they refuse, you’re not on solid ground. But if they agree, you have some indication that you are needed in their RFP process either as their first choice (good footing) or an important price/functionality reference point (not so good).

This is your opportunity to not only understand the story behind the RFP, it’s also a chance to change it. This is where the next test comes into play.

Adding Challenges and Requirements

If you have the opportunity to hear the story behind the RFP, you have an opportunity to change the story. This is where you look for problems or challenges that have not been identified, link to your differentiators, and have value for the prospect. There is always something they overlooked.

If they accept the suggestion to change the RFP to incorporate the challenges and associated required solution capabilities you suggested, you have another favorable data point. If they refuse, you have a negative data point.

Reprioritizing Challenges and Requirements

Sometimes you have a capability that differentiates your offering. Look for the opportunity to get a priority ranking of key capabilities. If you have a differentiator that is low on the list, ask about the pain associated with the challenge it addresses. The more pain the higher it should be on their priority list. Conversely, look for competitor’s differentiators. If they are higher on the list, a review of the pain (or lack thereof) behind the associated challenge could help to lower the priority of a capability that you can’t address as well.

If the prospect engages you in the reprioritization dialog and responds favorably to suggested changes in priorities, you have another favorable data point. If they refuse, note the negative data point.

Trade Offs

There will be occasions where you can’t address a capability as described in the RFP, or you address it differently. This is where you request a trade off. You’re trying to get the customer to accept an alternative capability or trade a different capability for the one they specified. If they accept, your position is stronger, if they reject the request, you have another negative data point on your position.

Stakeholders

Another test is to request access to the stakeholders that would benefit from the solution. If they allow the request, you have a stronger foothold, and you may be in a better position to influence changes to the RFP. If they deny the request, you have another data point that may indicate your solution is not valued. If you do get access to the stakeholders, that’s your best chance to re-engineer the list of requirements by bringing up challenges they didn’t anticipate. (see above)

Date of Submission

Another good test point is to ask the prospect if you can be late for the submission date, whether you need it or not. If they agree to accept your submission late, it may be an indicator that you are valued in their RFP. If they reject your request, you have another data point that doesn’t indicate a position of strength.

Conditional No-Bid

At one point in my sales leadership career, my sales team came to me with a very comprehensive RFP tendered by a large corporation. The sales team wanted to secure a large technical team to spend several weeks assembling our response. I said, “No”.  One of our competitors was the incumbent in the account and we had no role in building the specification for the RFP. So I asked for an audience with the RFP committee. My sales team relayed the request and the RFP committee agreed to meet with me.

During the meeting I requested the story behind the story. They declined to share any information. Then I asked if they could extend a longer period of time for our response.  They said if we wanted to compete, we had to play by their rules. Then I asked for access to the stakeholders that would benefit from the purchase. Once again they said, “No”.

I walked away from that meeting with the feeling that we were not their favored vendor. When I got back to my office, I wrote a contingent no-bid letter. I addressed it to the CEO of the company.

In my letter, I explained that we were the leader in our industry, that we were excited about the opportunity to potentially add value to their business, and so on. But, I explained that without more information about the circumstance that brought this requirement to the surface, we could not possibly tender a proposal that would hit their business needs as well as we probably could. I suggested that if the circumstances were to change, and they were willing to share the information, we would be happy to submit a proposal, but in the meantime, we had to decline the RFP. This is what I call a contingent no-bid. I leave the door open, but decline under the current conditions.

A few days later I received a phone call from the CFO of the company. He said the CEO had asked him to get back to me personally. He told me that there was no budgeted purchase planned. He also explained that this group of people were in-between projects and were being funded by a training budget until they were assigned to a project. In other words, there was never going to be a purchase. He apologized for the confusion and asked me if there was anything else he could do for me. I said, “yes, there is!” I asked for a meeting with the CEO and the CFO to simply describe how we could address their business challenges better than the vendor who was currently supplying their solution. He said he would look into it. (I eventually got the meeting). More importantly… I asked him to please not share the information he just disclosed with the other vendors involved in the RFP. He laughed and said he would let it run another 30 days before shutting it down.

A contingent no-bid is an effective test for determining if the prospect needs your response. If they do, they will call you back and attempt to talk you into the response. If they don’t, you were not going to win, and best case, you were only there for pricing comparisons. Better still, if worded correctly, it leaves the door open if the circumstances change.

Improving Your RFP Hit Rate

The quest to improve your RFP hit rate is highly dependent upon setting a goal to NOT reply to blind unsolicited RFP’s. If you can posture your way out of responses you’ll save a lot of resources and project yourself as the most attractive solution. But if you have to reply to win, you can use the strategies listed above to improve your position and test the reality of your chances for winning. If the tests indicate a weak position, you should feel good about walking away from the situation before you invest any resources into the response. After all, if there’s no way for you to win, the unsolicited RFP robs you twice. First because you can’t win this deal, but they also rob you of the time you could have spent on any opportunity that you could have won.

The Enterprise Selling Group helps commercial organizations tune their sales and marketing disciplines to improve revenue results. Kevin Temple is the founder and President of The Enterprise Selling Group.  

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Is Your Corporate Overview Factual, or Persuasive?

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A client of ours recently asked us to develop the skills of his sales team to deliver a more persuasive corporate overview. His motivation came from the lack of sense of urgency they were witnessing with their prospects. They could get the first meeting, but the second meeting was becoming elusive. What I’ve gathered below is right in line with Aristotle’s work on Rehtoric describing Ethos, Pathos, and Logos. So if you have any college flashbacks, good or bad, you can thank me.

Before I begin the summary, keep in mind that a persuasive sales presentation is supposed to answer three questions for your audience. “Why Change?” “Why Change Now?” and “Why Us?” Your objective is to heighten their emotional perspective on the requirement for change, and lead them to your solution as the best option given their circumstance. Alternatively, a lack of persuasion translates to leaving it up to the prospect to find the motivation to change on their own. For those who may have forgotten, I’ll remind you of the saying, “hope is not a strategy!”

1. Problem Identification. People are motivated for their own reasons, not yours. A persuasive presentation should start with a focus on the problems they’re having in their business. (Not your company bio, or your client logos! See my post on Selfies). Within the first 3 or 4 slides, there should be a problem identification slide. This is where you get the customer to confirm the problems they’re experiencing in their business. It can be a list of common problems other customer’s have shared. It can be a “situation creates problems” visual, or it could be a blank slide with bullets reminding you to start a dialog about problems. Even better, blank the screen out and have a discussion (In Powerpoint, Ctrl B turns the screen black, ctrl W turns it white). You’ll be amazed at how many people wake up, put down their mobile devices and contribute.  Don’t forget to capture their input in plain view.

Some people have voiced concerns to me about “guessing” with the wrong problems. My answer is that if none of the problems you can solve resonate with the prospect, you should walk away from the engagement and find a prospect that does have problems you can solve. Further, it’s not necessary that all the problems resonate. Just enough to help them answer their first question “Why Change?” and compel them to share problems not listed on your slide.  I’ve also received pushback on this suggested activity when the seller feels uncomfortable engaging in a subject that seems obvious to the prospect. “They know what problems they have!”, I’ve heard as an explanation. But in fact, they don’t know all of the problems they have, and they will be grateful when you point out problems that add to their perspective. (This is called delivering insight.) At a minimum, you get credibility points for demonstrating that you understand the problems they’re facing. More importantly, the list of problems becomes your long term motivational carrot and stick. (See item 5 below.)

2. A Compelling Story. This can be an anecdotal story about a company/person similar to your audience, an analogous story about some every day experience, or it can be an foreign land based mythical story. In the former, your story depicts another organization or person in a situation similar. More important is to describe the problems this other character was experiencing… you want them to relate to your character, and problems are their common ground. Then you describe how you solved the problem set and the outcome or payoff for the customer. I call this the Hollywood format, since it follows almost every movie script format ever produced. In the analogy or foreign land story, you are doing the same thing as the anecdotal story; you introduce a character ( your dog, or a giant in medieval times for example), you describe the problem (your dog won’t take his medicine, or the giant is terrorizing the village), you describe how the problem was overcome (your mother suggested wrapping the medicine in peanut butter, or the small child uses his slingshot to fell the giant), and then you draw out your point ( sometimes solutions come from collaboration, or fear can cripple grown warriors) and connect it to your message for the day.

Stories do more than illustrate the “Why Change?” question. They build rapport with the audience and they make you more accessible. They also last longer than your presentation. People can easily forget the details of your presentation, but many will remember a story for months or years. If you can remember the details of a book or movie that you haven’t viewed for years or even decades, you are your own proof that stories have staying power.

3. Build Anxiety. If you’ve done a brilliant job of answering “Why Change?”, your next goal is to answer the question “Why Now?” Your audience needs to be compelled to take action. Although some people are motivated by opportunity, a vast majority are motivated by fear or pain. Your job is to get the audience to experience the pain of not taking action. This can be achieved with a Provocative Question, another story with a disappointing outcome, or a third party prediction.

A Provocative Question is designed to tap the personal ramifications of not changing. It might sound like, “So if the your team misses their milestone delivery date, how does that impact you personally or the group?” Your objective is not necessarily to get the answer, in fact, you may already know the answer. Your objective is to get them to experience the outcome while they are sitting in front of you. Ideally, the receiver thinks through the outcome and comes to some conclusions in their mind such as… “I won’t be getting my bonus.” or, “I’ll have to dust off my resume”, or “There will be some late nights and weekends for everyone.” Basically, you want them to move from the logical reasons for change to the emotional reasons for change. The best answer you can hope for is the prospect asking you, “so how can you help us with that problem?” ..teeing up item 4 below!

If you decide on another story, the structure is the same as above – identify the character, describe the problem – however, now you reveal the lack of action, or a different decision (such as they tried to solve it themselves). Then you describe the outcome. Only this time its pain oriented. Loss of money, competitive disadvantage, personal heat from their boss, etc. Help the audience to feel the ramification for not taking action, or for taking the cheap way out.

In using a prediction, its best to refer or cite an outside source that has credibility. “Gartner anticipates that 40% of businesses will double their cost of application support every year without the use of analytics.” The objective is to get them to experience a pain in the future that has been verified by a credible third party. On a side note, I’ve witnessed lots of corporate presentations with compelling quotes sprinkled throughout. Unfortunately, most presenters fail to leverage the quote, or simply read it aloud. Try engaging the audience around the quote. You might ask, “so does this quote seem appropriate to your situation?” Or, “do you think that number is high or low?” You want to get them to live in the moment of the quote and tap into their emotional drive to help you with your objective to act now.

4. Connect Your Differentiators To Their Problems. Now we want to answer, “Why Us?” When you reach the section of your presentation where you are describing your solution, you want to call out the problem you captured earlier that connects directly to the capability you’re about to disclose.  If you captured their input of the problem definition on a white board or a flipchart, go to that location and circle the problem that your capability addresses. If you captured the list in your notebook, verbally call out the problem again and even better, identify the person who brought it up. “Mike, were you the one that said there was a problem with redundant processes for the team? (Mike nods agreement.) Good, next I want to show you how we address that better than any other solution available.” Make sure you identify when your capability is unique or at least does a better job addressing problems than other solutions, including a DIY solution.

5. Follow Up The Presentation With A Recap And Confirmation Of The Problems. When you captured the list of problems, you weren’t just being a good listener or providing insight by bringing up problems they weren’t aware of; you were also planning for the future. As soon as you leave your presentation, the attention of your audience is pulled elsewhere. It might be dreading the upcoming commute home, or it might be getting back to a project deliverable that’s late. What ever it is, there will be many distractions and they diffuse the power of your persuasive presentation by overwhelming the participant with other thoughts. As days go by, your compelling presentation is lost in the muck. Your job is to remind them of the emotional reaction you created for them. When you type up your follow up thank you email, recap the problems (and impact) you uncovered and seek their buy in that you heard it correctly.

“Hey Mike, thanks for sponsoring the meeting yesterday. Wanted to make sure I shared the input I gathered in case you need it for internal discussions. The group identified three major problems 1) redundant process, 2) no way to understand how their product was being used when bugs occurred, and 3) having to reinvent the wheel for each operating system. They said this was driving up costs by 30%, and delaying releases by 2 months or more (leading to disappointment upstairs). Let me know if I missed anything important or if I’ve portrayed the situation correctly.

Your objective is to remind them of their reasons to change and to change now. But don’t stop here. When they ask for demonstration, start the demonstration with another recap and confirmation. One reason to do this is that things can change, but more importantly, you want to refocus them on Why, Why Now and Why Us. When they ask for a pricing proposal, include the problem list and impact in your cover letter. Remind them again of the reasons to change and the priority for doing it now. (It also helps to sell for you if a unknown stakeholder has to sign off and you lack access to them directly.) Think of it as the movie trailer that gets you excited about seeing a movie again.

Summary

When you master the persuasive presentation format, you’ll see shorter sales cycles, lower no decision outcomes, and better access to other stakeholders. After a great presentation, some will want you to repeat the presentation to their boss, or their boss’s boss. On the other hand, if you deliver the same boring presentation as the next guy, they will want to shield their boss, take their time sifting through other alternatives, and let other distractions mask the urgency of the initiative.

Please forward this link to your team!

The Enterprise Selling Group helps commercial organizations tune their sales and marketing disciplines to improve revenue results. Kevin Temple is the founder and President of The Enterprise Selling Group.