Responding to requests for proposals – commonly known as RFPs – can be challenging and tedious, but can also offer your firm tremendous revenue potential.
“The moment you receive the RFP documentation from the client, review the document in its entirety with your team – accounting, IT, procurement, and fulfillment,” says Carol de Ville, president of The Branding Company. “It is vital to the success of your submission to clearly understand what a client is requiring.”
Read on to get de Ville’s advice on scoring RFP deals.
Q: What are the benefits of RFPs?
A: You can acquire Fortune 500 clients. Then, you can build your customer portfolio with contracted long-term business. Typically, RFP contracts are based on a three-year performance with evergreen renewals. Through these agreements, you can plan your growth and negotiate with suppliers, staff accordingly and set long-term objectives.
Q: Are RFPs always just about price?
A: There are some scenarios where the entire contract is based on price. A number of years ago, some Fortune 500 companies were involved in an online bidding process. Distributors pre-qualified and registered, received a bidding portal and user identification number along with a bidding calendar that quantified the time, the item, and the quantity. Then, the online bid transpired. But, in most cases, it is not all about price.
Q: So what should a firm focus on then?
A: It’s important to identify your firm’s unique positioning statement, what types of awards you have won in the past five years, team members that will be responsible for a project, along with what education, especially industry education, they’ve earned. Be clear about what makes your firm special in managing large corporate contracts.
Q: RFP answers need to have great detail, too, right?
A: The process is very specific and the distributor must adhere to the submission requirements. For example, each section is submitted in a very specified method and pricing is in a sealed envelope. The evaluation team will review and quantify the distributor responses, then evaluate and grade each category and section. Generally, within the client’s RFP, the customer will share the percentages by category and section. This is important, as you need to understand that if IT requirements are worth 15% of your submission, then your team needs to respond accordingly and not with a short answer.
Q: How long is a typical RFP response?
A: About 20 to 30 pages, which includes a client program overview, specifications, a copy of the contractual agreements and a cost matrix.
Q: What markets are RFPs most common in?
A: We see more formalized RFPs being issued across all industries, but more specifically in the financial sector, oil and gas industry, government services, as well as universities and colleges.
Q: What role can suppliers play in RFPs?
A: One of the most important pieces in responding to RFPs is your supplier partner relationships. You need to provide your supplier partners with the most amount of lead time to develop their pricing matrix, offerings, suggested substitution and new innovative product ideas. They are the experts, so take the time to include them.
Q: When should a distributor pass on RFPs?
A: There are some cases where an RFP is only based on price and there is no opportunity to submit your company’s strengths, capabilities and experiences. These types of bidding RFPs completely undermine our industry and the professionalism that we bring to marketing and promotional solutions.
Read an expanded Q&A at www.counselormag.com and click on “Case Studies” at top of the page.