When I started selling you couldn’t move for RFPs, Request for Proposals that would come into the company.
RFPs where issued and submitted early in the sales process. Often the RFP would document the user requirements. This then formed the processes that would be demoed in the software. The RFP would also form part of the deliverable for the contract. You would be contractually bound to deliver that functionality.
The RFP industry
Purchasing departments made an industry out of getting suppliers to respond to a detailed documents.
Often responses required a detailed written technical and functional response, in my early years in sales these would be submitted in printed form. I worked for an organisation where we had 5 full time equivalents (FTEs) whose job it was just to help sales people reply to RFPs.
The joke at the time was that the winner of any RFP contest would be the vendor who provided the heaviest set of printed documents. (How things have changed in terms of the technology, as to people wanting to (thankfully) save trees.)
I recall spending a week of long days and nights responding to a requirement for Hillingdon Hospital, spending hours photocopying the document. (It was quicker to do this than printing). Then us filling the trunk / boot of a colleagues car so he could deliver it. On the way to deliver it, there was a crash on the motorway in front of my colleague (he wasn’t harmed), he delivered it 10 minutes late, we were disqualified. A waste of a week, you live and learn.
Procurement departments would always issue RFPs to 3 vendors. We all knew that the RFP would be issued to the supplier the customer had been talking with, that had spent time educating the customer, who probably wrote the RFP and 2 others. I recall one Sales Director saying to me, “We have a receptacle for unsolicited RFPs, he pointed at the waste paper basket”. Remembering the week I lost to Hillingdon Hospital, I agreed.
But it takes a strong willed salesperson to remove those rose tinted spectacles and say “no bid” to an unsolicited RFP. There is a saying “The devil makes work for idle hands to do”. Many a sales career has ended thinking that filling in unsolicited RFPs, and being busy would mean results / sales.
Has the Internet changed anything?
So has the internet, business (rather than IT) decision makers and cloud computing changed all that?
Using the internet, anybody can go online and research responses to a business issue. Many users ask their networks how to solve business issues by going into social media and asking questions.
The rule of 37% in a procurement cycle
In the “Tim Talks” video (this is my youtube channel, where I produce educational videos, interviewing people on subjects such as social selling and digital marketing) with @jakereni we talk about the rule of 37% in Social Selling.
The rule of 37% is a situation where today’s connected customer goes online and self educates. At 37% of the way through the process, they generally define their requirement. (In the video Jake talks about why salespeople need to be helping customers at that point, so customers are defining their requirements for your product or service). Or of course, you can let somebody else define the requirement and wait for the RFP. *Face palm*
In the past, RFPs would have been issued at this 37% point, but in my experience this does not seem to be the case anymore.
Talking to a “framework” provider recently, they said that regardless of whatever CEB or LinkedIn say about changes in buyer patterns (remember this is research after all) they had seen a shift in buyer patterns.
“The RFP is still a requirement but rather being issued in the first 20% of the sales process, it is issued in the last 20% (so 80% of the way through the sale).” Why do you think this is, I asked. “With end user departments and not IT making the decisions and spending the budget, the RFP is often seen as an afterthought. Really so any decision is auditable”…. “We are seeing a rise in complaints from suppliers and many Finance and procurement need to make they are free from litigation”.
It would seem that in many cases, RFPs are issued (if at all) when “Purchasing” get involved at the end user buyer process. (Note to sales people: Have you qualified this with the customer and built this into your forecasting process as it can add 3 months to a buying process?)
If a Client I’m Working With Suddenly Issues an RFP, What do I do?
You should already be work and educating the customer and be in control of the RFPs bill of materials (BoM) and as a salesperson you have a pretty good chance of a win. (Not saying it’s a dead cert, I know people who disrupt RFP decisions by using social media, but that is a subject for another day).
So have we seen the death of the RFP?
There is pressure of course from vendors themselves. Many aspects of the B2B sales process was invented by vendors. Vendors then educated IT departments they had to buy in a particular way. With the introduction of Cloud, many of these vendors are trying to unpick 30 years of education. Some vendors don’t respond to RFPs and therefore no-bid, which is a viable sales tactic.
But, Tim You are Always Telling me The Purchasing Process is Dysfunctional!
I’m aware of an ERP system that was procured by the customer ringing the vendor and saying “we have seen the YouTube videos, can you tell us how much and how we sign”. Now maybe not the best negotiators, but there is no reason why somebody doesn’t do 90% of the buying process on-line. With cloud it’s possible to do the whole buying process on-line, then just swipe your credit card, without the need of a salesperson.
So what do you think?
What’s your experience?
You still filling in RFPs?
Are you seeing them issued at the “start” of a buying process or justifying a decision.
Is there a better way?
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