Dealing with RFPs

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1Dont Be a Commodity: Dealing with RFPsTom Stimson MBA CTSPresenterTom Stimson MBA CTSPresident of Stimson Group LLCManagement Consultant to AV Communications Industry

30 Year Veteran of AV IndustryPast-President InfoComm InternationalAdjunct Faculty InfoComm UniversityPLASA Business Resource

Request for ProposalProject-based invitation to propose a solution, budget, and/or your capabilityComplete or semi-complete specificationFormal or InformalRepresents the customer taking control of the opportunity

RFPs are not a contest to see who can guess the best. They are a defense against profit-takers and charlatans.

- The CustomerRFPs represent a basic lack of trust in the marketplace coupled with a desire to spend less, get more, and have a predictable outcome. Your initial response to an RFP could easily disqualify you as a contender, so for most salesfolks the preferred method is to look acceptable at any cost and get to the second round. In other words, commit a huge effort just to find out what effort is required to secure the business. This is an expensive GAME.5Key ConceptsQualifyingPositioningClosingBonus ConceptWhat to do if all else fails

Fundamental ConceptsProfit is more important than revenueBidding on jobs that you cannot win is a waste of resourcesBuyers that do not take the time to know you arent going to hire you - except on price

4. If your goal is revenue, then setup a bid desk and do not involve salespersons in the process. Take the shotgun approach and if you win, assign a project manager.8QualifyingIs this a suitable contact for this project?Is the job winnable?Are we a good fit? Will we have an opportunity to negotiate?RFPs that specify Best Price are designed to pick a loser, not a winner9Qualifying Do I Know This Customer?Why us?Why an RFP?Why this criteria?Call the CustomerCall the CustomerIf YESIf NOExtend InvitationENDInvitation: grant access to technical team; capabilities pitch in person or online; invite to an event that you are stagingEducate them about you, the project, the possibilitiesA declined invitation means less than 50% chance of winning the job

10PositioningMeet the Customer in the right conversationPitch your capabilitiesRefine the request to take advantage of your capabilitiesAgree to the revised scope of workExplain why you are qualified to CHANGE THE RFP. Discuss. Agree.11Positioning MEETIf YESENDPITCHAGREEREFINEIf NOExtend InvitationCreate a competitive advantageIf you can agree on a refinement, that now means your proposal will get special consideration and/or all the other bidders will have to adjust or be at a disadvantage12ClosingSubmit the agreed upon Scope of WorkPresent the price and termsWorks towards a clear no or yesClosing REVISE SOWCREATE PROPOSALAGREEIs this what Customer wanted?No?Yes?ReviewIs this what Customer wanted?NEGOTIATENo?Yes?CONFIRM ORDER14RecapQualify the job, customer, and yourself as a potential fitPosition your company and the scope as what the customer needsClose the deal by matching the budget to the scope and needs

Types of RFPsNon-Bid (80% chance of winning)Known client, knows what they want; No one else will bidVerification Bid (60% chance of winning)Known client wants to validate your numbersCourtesy Bid (20-30% chance of winning)Client wants to validate someone elses numbersBlind Bid (less than 10% chance)Third-party scope of work looking for best price Apply All Three StepsQualifyingPositioningClosingNon-Bid RFPYour business to loseSeek an acceptable solution and budget by mutual exploration of the issuesYou are involved to reassure the clientTake NOTHING for GRANTED18Non-Bid ProcessQualify: Already done so invite to meetPosition: Clarify your role, do some demos, revise scopeClose: If we can do X on the budget Y, can we do the contract?Close: for this scope of work, agree to a not to exceed price19Non-Bid ProposalWork from known budget or,Work from known elementsCreate options upgrades, optional versionsLeave contingency money in so you can say Yes to small changes laterVerification BidYou are the incumbent or preferred supplierBuyer seeks proposals from multiple companiesYour ideas will be shared with other potential suppliers Buyer will work with best first- or second-pass solutionVerification Bid ProcessQualify: Reaffirm that you are right for the jobPosition: Clarify your role, do some demos, revise the scope (other bidders will get as well), determine that price is not the deciding factorClose: Agree to right of first refusal22Verification Bid ProposalDo not treat like a non-bidCreate tight scope of work, itemize value-added servicesNo contingency money, no options not included in the RFPRight of first refusal guarantees a closing opportunityIf you cannot get RFF, then treat this as a Courtesy Bid or Blind Bid23Courtesy BidYou might not be well-known to the buyerBuyer seeks proposals from multiple companiesYour proposal serves to keep their preferred supplier honest

Courtesy Bid ProcessQualify: Make sure this isnt about price, inviteIf you can host the site survey, you improve chancePosition: Capabilities pitch, be a great host, agree to scopeClose: Eliminate the first refusal position of the incumbentCourtesy Bid ProposalIf you follow all three steps, then treat like a verification bidCreate tight scope of work, itemize value-added servicesNo contingency money, no options not included in the RFPOr, simply decline

Blind BidRelationship or contact is typically indirectProcess is designed to reduce costs or eliminate unqualified sellers or bothSeek access to economic buyer or key influencer (capabilities pitch)If no, then decline

Blind Bid ProcessQualify: Most wont qualify Position: Of those that qualify, most wont accept inviteClose: You have zero chance of negotiating unless you can bypass the specifier and get to the economic buyer

Blind Bid ProposalMinimal effortNo detailsInclude marketing propaganda

When They Wont EngageDont BidInvite them to get to know you before the next projectBid, but change the scopeTreat it as a scope testBid the exact scope, but add terms that require a new scope before you will do the jobTreat it as a price test#3 In other words, say you will price the job, but refuse to do the job as specd30Download a copy of the slides