Win More RFPs
Industrial marketing is a world that is fraught with many imponderables. While there are many shades of grey (even more than 50), some aspects of industrial marketing are crystal clear, full out, and unquestionable time wasters. One of the greatest time-wasters of all is responding to inquiries from prospects with less than a good probability of ultimately choosing your company as the vendor. The dreaded RFP is a good example of this.
Ever get those mysterious phone calls, emails, or letters asking you to provide product information, or worse, an RFP with little or no detail? If you take the time to respond to these requests more often than not you are nothing more than column fodder. Someone in the prospect’s company has been asked to be a good boy or girl and get the obligatory three quotes and your company has made the list. Now you feel compelled to participate.
Wait, not so fast. Before you spend valuable time and money putting an RFP together you need to consider the following.
The first thing I suggest you do is to review the percentage of past RFPs that you have won. If you could participate in an RFP and the incumbent wasn’t protected, and all of the participants had exactly the same information, and if all of the websites provided essentially similar educational information, and if all things were equal, and there were only 3 participants, and each of the three participants had equally skilled salespeople, then you would have a one in three chance. There are, however, a lot of ifs to consider.
Next, calculate the time spent putting your RFP together. I am often surprised at how many companies seriously underestimate the amount of time they spend putting together an RFP. In my experience it is not uncommon for 20 to 40 hours to be spent on an RFP. If a single staff member is paid $1,000 per week (not including benefits or any other company contributions) then the RFP is costing between $500 and $1,000. Add in the additional costs for additional staff time and it’s easy to see that RFPs can easily become quite expensive.
Now that you have a good handle on your historical win rates and you know how much an RFP costs you can make an intelligent decision. After all, if RFPs for projects with an average potential profit of $10,000 typically cost you $1,000 each, and you win one out of every six RFPs, then each won RFP actually costs you $6,000. Now for many companies that may make participating in RFPs unattractive. Only you can decide.
The trick to winning first place in the RFP derby is to realize that for many companies RFPs are a waste of time and money. After all, you can’t lose if you don’t play. Frankly, if you really want to increase your profits then you need to get involved in the buying process long before your company ends up on the RFP list.