How to win at RFPs

Many of you will have been here before. It takes strength and discipline to take a step back before burning the midnight oil crafting the perfect response document.

In this article I’ll cover:

• What happens on the buy-side before you receive the RFP?

• How should you qualify an RFP?

• How do you maximise your win-rate?

Why do procurement use RFPs and what is the bigger picture context?

Inside bigger brands (>£300m revenues), if the budget is material, e.g. >150k pa, the Procurement function is likely to get involved. There are a number of reasons for this including:

• Governance, i.e. an objective and controlled way of selecting/managing suppliers

• Rigorous process with an audit trail

• Because sourcing, negotiation and savings’ delivery are specialist disciplines (just like marketing is)

The process procurement typically use to appoint a supplier is often referred to as the “7-step sourcing process” (originally developed by A.T. Kearney.). It broadly works like this:

1. Business requirements definition, volumes, targets, constraints, etc

2. Establish the right sourcing-strategy

3. Supplier research and short-listing

4. Develop RFI/RFP and decide on the scoring criteria and relative weightings

5. Run the RFP process, select preferred suppliers & negotiate terms and contracts

6. Implementation planning and transitioning

7. Ongoing performance management

The key message for agencies here is that a lot of work and expectation setting goes into an RFP outside of the document you receive. Therefore, to maximise your returns, you must:

• Qualify hard

• If you do bid, answer the exam questions, provide strong evidence to support your claims AND add a lot more value on top

• Focus on your true source of competitive advantage, i.e. deep specialist knowledge and experience

How should you qualify an RFP?

To work out if you stand a high likelihood of winning (say >50%), here are a few of the key questions to qualify the RFP in/out:

• As part of the process, can you meet the marketing director/sponsor?

• Have you addressed this specific kind of problem/opportunity before and do you have compelling capabilities/credentials?

• Are the scoring criteria clearly defined and achievable?

• Do you know why you’ve been selected - do you have an inside track?

• Do you have a point of true differentiation?

If you haven’t already, I’d recommend using an RFP qualification worksheet every time you consider an RFP. You can download a copy of my worksheet here

So, how do you maximise your RFP win-rate?

Now you know the context and you’ve qualified it in, here are my top tips on how to maximise success:

• Use the open-window for written questions wisely (remember however that all questions and answers may get circulated to all bidders). Especially important where there is any ambiguity in the tender documents.

• ALWAYS answer the exam question fully and provide evidence to support your answers; remember those dreaded school exam papers!

• You’ve got to provide additional value in your responses beyond answering the question. You have to demonstrate innovation and deep insights into the situation the client is facing to stand-out.

• Get someone independent to score your draft response before submission. I do this a lot for clients and it opens up all sorts of opportunities to improve their win rate. You do however need to accept having your work marked and be open to feedback from “friendly fire” - better now than when it’s out of your control though!

• Know your competition and how they pitch, and ensure your response is clearly differentiated based on your deep subject matter expertise and status as Trusted Advisor.

• Where possible, propose alternative commercial models in addition to the one they’ve asked you to complete. This is particularly valuable if you can reduce the risk for the buyer and increase your compensation based on performance.

• If the dreaded spreadsheet is included (you know the one: role types, experience grades, hourly rates, number of hours, etc.), then you have to submit something or else you stand a high chance of being rejected. However, minimise the data you provide, give it in a PDF where possible, avoid line-item pricing, and state clearly “We have provided this data in order to comply with your request and understand your desire to cross-compare quotes. However, we don’t contract on an activity basis, we focus on outputs and outcomes with our clients. Therefore, should we be successful in getting through to the next stage, we will not be negotiating our commercials at the line item/worker/rate level”.

Notes

Clearly, wherever possible, you want to avoid any RFP processes. Therefore, ensure your sales pipeline includes a good weighting of £100m-£300m revenue clients as they are less likely to run formal procurement processes (although the deal sizes are also likely to be smaller potentially).

If you’re bidding for Public Sector or Charity work via an RFP, the way they score responses is bound by very strict rules/guidelines. Contact me if you want a discussion on this topic in particular.

Conclusions

No-one ever said “oohh, I can’t wait for the next RFP to fill in”, but they are a fact of life. Maximise your win rate by:

• Qualifying them hard at the outset.
• Getting an independent expert to review and score your draft response so you can make incremental improvements before submission.
• Focus on your differentiation and value-add to get beyond compliance and stand-out from the crowd.

If you have any comments or questions about anything in this article, I’d love to hear from you. Drop me an email.

Mike Lander is the CEO and founder of Piscari, which empowers agency leaders with better negotiation skills and insights into how procurement professionals work.