Tag Archives: RFI

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RFP Strategies

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.

Blog

Sales Agility: How To Tailor A Sales Message

The first quarter of the year is usually a slow start for most enterprise focused sales organizations. But it also tends to kick our behinds into gear as we grasp the required ramp to reach the year end goal. If this resonates with you, I’d like to focus you on one initiative that will produce better sales results, and provide the fuel for your accelerated ramp requirements. The best part is it’s easy to implement, especially for time strapped sales people and sales leaders.

We’ve been hearing it for a few years now. CEB’s research says the top performing sales people tailor their sales messages to their prospects. If you’re not tailoring your messaging, there’s a potential windfall waiting for you.

On the other hand, if your team is using the “spray and pray” model, where one message fits all audiences, you’ll find the result of not tailoring sales messages is a high ratio of “no-decision” outcomes. I’ve run across numbers as high as 60% of the pipeline in some businesses, while the norm is about 40%. As a subset of this, delayed decisions are also costly when it comes to improving sales productivity, and also relate to a lack of tailored messaging. Bottom line, if the prospect has trouble understanding the need to change given their situation, or can’t clearly articulate it to their colleagues, they either can’t make a decision to change, or it gets delayed. Tailoring the sales message around their specific situation is critical for delivering better sales results.

Before we get started, let’s narrow the task down to a manageable and productive thrust. There are several levels of tailoring: You can tailor to the industry, tailor to the company, or tailor to the job title or function. You can also tailor to the individual, but that requires insight into their personal values, focus, passion and more. For this article, I’ll focus on tailoring to a company. This level of tailoring helps with the first step, getting in the door. It also helps the contact identify and more clearly articulate the reasons for change to their colleagues, resulting in fewer no decision outcomes.

The place to start is with the Internet. I start with three basic research tasks:

  1. Identify any recent changes to their operating results, good and bad.
  2. Take a look at their press releases for good or bad news.
  3. Perform a specialized Internet search on their company name combined with a few chosen adjectives.

Recently, I conducted this exercise on a prospect and it took a total of about five minutes. But the results were invaluable.

I’ve decided not to disclose the name of the company that I’ll use to illustrate my results as they are an early stage prospect for my business. I can only imagine the number of my competitors calling them after reading my post, and since I don’t have the contract nailed yet, I’ll take the safe route.

The first place I visited was their “Investor Relations” section of their website. Like most public companies, they post their financial results for their shareholders. Not three days before, they released their 2014 annual report.

I quickly scroll down to page 33 where I find their operating results. The first thing that catches my attention is they have almost quadrupled revenue from $12M to about $44M in one year. That’s impressively good news, but I didn’t stop there. Looking further down, the next eye catcher is operating expenses. The cost of sales has almost doubled from $32M to $62M, outpacing their revenue generation. This also indicates they’ve probably hired a lot of sales people from one year to the next. Their General and Administrative (G&A) costs have also doubled from $9M to $19M: Another indicator of hyper growth and an expansion of employees in other departments.

Since an annual report is a comparison of one year to the previous and may already be out of date, my curiosity compels me to check their current job postings to see if their hiring pace has changed. As it turns out, they are still in a rapid expansion mode. There are over 20 open sales openings listed in a variety of locations with around 100 postings in all categories combined.

I scan the remainder of the annual report to see if anything else catches my attention. As with all public companies, they are required to compare their shareholder return to a general investment in the stock market. The graph catches my eye. It shows their IPO price of a year ago, $40 per share, compared to the current price of $7.81. This causes me to conclude there’s probably a good deal of pressure on the executive staff to address this problem. (Even Elon Musk has to pay attention to this fundamental eventually.)

Next I turn to their news center. This doesn’t turn up anything useful to me. Like most companies, this is more of a marketing take on the trends and opportunities in their industry. It’s not really focused on their issues or problems. However, I never overlook it because sometimes something useful pops up like a recent merger or new regulatory requirements that may impact their business.

Lastly, I perform a problem and opportunity oriented Internet search. I like to use their company name and combine it with positive and negative adjectives. I’ll use words like “problem”, “issues”, “concerns” and the like. If that doesn’t pan out I’ll try some opportunity oriented business words like, “merger”, “partnership”, or “regulations”. I typically look only on the first page of results as any past this point are probably dated. This time, an article dated a few months earlier pops up. It details their announced partnership with a complimentary leader in their market. Although not too interesting to me, it would be interesting to other sales professionals selling collaboration tools. I make a note to pass a lead on to my customer, Polycom.

Not a bad return for a five minute investment. I now know they have a shareholder return issue, which is probably putting pressure on cost management or revenue growth, the latter being my hope. I also know they are spending more on sales than the company is generating in revenue, so I’m confident they should be open to ideas about reversing this ratio. I also found they have scaled the sales organization rapidly and are continuing on a fast clip. Combining this with the diverse locations of their job postings, I’d venture to bet they have a ramp up challenge, something I can help with in many ways.

This simple step arms me to have a productive conversation with their Chief Revenue Officer. Although I could have easily put this person on my standard email nurturing cycle and check in with them after they followed a link to some valuable content on my website, I find a much higher hit rate if I find something compelling and use that to start a conversation directly.

But I don’t stop there. I’ll use this information throughout my sales campaign. In the event I’m invited in to deliver a presentation to a larger stakeholder group, I use it to frame my presentation and drive a dialog to uncover related or additional problems. I also use it to frame my proposals. Even though I specialize in teaching sales professionals how to access decision makers more effectively, I’m also impacted by geographic separation or the calendars of overwhelmed CEO’s or other decision makers. In this event, I want my proposal to sell for me, framing my solution around the global, high level problems every executive in their organization would like to see addressed.

In short, I tailor my message to the issues they currently have on their table.

So why don’t more sales people make this simple investment and improve their results? I think it has to do with habit and an ill placed value on the shortest path to closure. They mistakenly believe the sooner they can talk about their product or service, the faster the decision will be made. However, as in Aesop’s fable, going slower can make you the winner.

If you’re a sales leader, I suggest a simple assignment to prove the value of this minor change in modus operandi. Ask your team to perform this level of research on just three prospects each and share the results at your next staff meeting. Chances are, most will find something compelling which puts your solution in a more strategic light.

LIMITED OFFER: I am offering to demonstrate this process for a select number of sales leaders and their teams using your own prospects. If you’d like to have a web demonstration at your next staff meeting, please contact me with the information below.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.

Blog

RFP Strategies

Image

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.