Why Good Advisors End Up in a RFP Process?
In a complex sale, the decision making cycle typically unfolds over months, even years. Deals carry high dollar values. Buyers risk consequences of wrong decisions.
Smart advisors don’t waste time stuck in a crowd of faceless vendors vying for recognition on a Request-for-Proposal (RFP list). If you want to be viewed as a strategic partner, not a name on a form (boxed in by lowest price), enter the prospect’s decision making cycle where it matters most. How do you do that?
If your main business is retirement planning, let’s say, and you act as an investment advisor to many 401(k) plans, you’ll usually enter at the human resource or finance area. That means you’re assuming decisions are made at the operational level. You present your capabilities and value proposition. And wait.
Okay. Now look inside the cubicles.
If a solution isn’t strategic or doesn’t impact multiple departments, then it is a commodity, purchased at the operational level because nothing links to a strategic benefit to the organization. Worse yet, any competitor can make a commodity sale. But if he offers an expanded scope of solutions and strategic focus, he might sweep the prospect off her feet and the RFP right out the door.
In the MERGE process, we explain the roles of end-user or technical buyers. In my experience, both groups see vendor selection as a small business problem they control, unconnected to any big picture. In fact, many 401(k) sponsors send out RFPs biannually as a standard practice to test the vendor waters.
If you lose the sale, it’s not because your firm isn’t credible or you lack resources. You lost because you didn’t sell the right value proposition to the right decision maker; you were just another RFP vendor.
What did you miss?
You may understand the client need. But that’s different from his requirements. Product salespeople too often wait until requirements are defined and the RFP lands on their desks. Then, you’ve already missed the key first step. Happens everyday. Why not do your research? Learn requirement definitions early on and defined by whom?
Competitors often make prospects aware of market changes, new product features or potential cost savings. That triggers the prospect to search for information from the current provider or anyone who walks in the door. Frustrated, the prospect sends out the RFP—a waste of everyone’s time.
The only ways to win:
1) Find the internal prospect champions; they may not be who you think;
2) Leverage any issues with the current provider;
3) Be strategic and problem solve.
Oh, and get ready to sharpen that pencil.
The best advisors who follow the MERGE process find dormant business problems, stimulate them to active pain, and gain advantage over competitors. And exclusive engagements.
Think like the CEO, not the end-user.
Strategic issues are what keep C-level executives up at night. Everything from survival, competitive advantage, market share and growth to litigation, leadership, regulations, speed-to-market, globalism, corporate culture, mergers and acquisitions. This is what occupies the night stand of today’s sleepless executives.
Become the prospect’s trusted advisor on issues, and you are halfway to closing the complex sale.