Three Ways to Turn the Dreaded RFP Process Into a Celebration
Three Ways to Turn the
Dreaded RFP Process
Into a Celebration
That nasty process for request for proposals has been on my do-not-do list for a long time.
Ah, but I am a realist.
In certain industries, you can’t avoid RFPs when asked to respond . . .even from some of your best clients. Why do they issue RFPs?
Because your clients or prospects see most products and services as commodities. They want a level playing field once they’ve identified their need. At this stage, you and your team have little chance of winning. So you must change your approach if you hope to stay out of these no-win bidding wars.
Most RFPs are built around a standard budget—some competitor told the RFP-issuer what elements to consider when budgeting and, perhaps, even the criteria to use. Of course, the competitor has “influenced” the RFP in his firm’s favor.
What’s needed to level your playing field? A hyper-proactive stance.
Winning more deals at higher margins requires a proactive communication and marketing strategy. That’s why you must get in early. Be the one who helps write the RFP criteria. In this way, you influence the buyer’s vision of a solution long before the competition.
This approach may be a shift from your standard sales strategy. And it’s tough to do. It’s easy to lead with a product or service, then sit back and wait for the RFP.
To get out in front of the RFP, you must deliver obvious value. And you do that by showing the prospect an issue he didn’t see, find the right solution before he discovers it, or the competition presents it. [See chart below].
If you are simply responding to RFPs with due diligence, either the issuer or the competition has already found the problem. So the RFP merely asks you to fill the specifications. Too late!
To be viewed as a trusted advisor, and get out in front of any RFP, take the proactive high road with this three-step ramp up:
1. Who’s the Prospect (Really) and What Needs Must We Satisfy?
Segment. Slice and dice his market with a steel-cut blade. Dissect. Know what you must know. Then, develop your communication and marketing strategy with messaging focused squarely on his needs. Layer the messaging inside the folds of his mind such that he begins to think the message of your solution is actually his idea.
An example: One of my clients works with hospitals, and developed a data base with all the targeted hospitals and key people within the organizations. I know, sounds pretty basic, but you’d be surprised how many firms fail at this step.
So, this client stages monthly webinars on key topics, and averages 50 to 75 participants―perfect platform for follow up. The client publishes a quarterly newsletter, speaks at conferences, and writes and places articles in key trade journals. What’s more, the client supports hospital associations, and attends their conferences.
Always proactive, this client looks for issues, and stays in continuous contact with the hospital organizations. With at least half of the RFPs coming into his firm, my client has already established contacts within the organization.
Can you imagine this advantage over the firm who receives the RFP blind?
2. Creating the Opportunity
In our Conceptual Selling® workshops, we teach salespeople that the Valid Business Reason (VBR) is the best way into the prospect mindset in order to create the opportunity. The VBR is based on the best available information about your prospect and his vision for a solution. But first consider what the meeting will do for your prospect. Why would they give you their valuable time?
The VBR should link something important to your prospect such as what’s to be accomplished, fixed or avoided. The VBR sets the priority for the prospect so your dialogue is directed and efficient.
Another example: One of my clients recently asked me to make an introduction to a community bank where I had a relationship with the CEO. I said I would be happy to do it but wanted to know the VBR. He was trying to sell bank-owned life insurance (BOLI).
His VBR: “The bank has the capacity to buy $30 million, and they have never bought this type of asset. It will improve their earnings by one million dollars.”
Okay. That may be a great result to achieve, but it’s not a valid business reason. My client wanted to approach his prospect from how he saw their product, not how the prospect sees a solution.
The prospect had not purchased this asset before; my client wasn’t the first to bring up BOLI. I suggested a lot more homework so my client would find issues the bank faced where he could solve a problem. To his credit, he discovered issues with key employee retention, so he was able to establish the most promising VBR.
3. Turning Activity Into Results
When I review salespeople’s funnels, I see lots of activity, but low results, as a percentage of the funnel. All the sales leads in the world are worthless, if not converted to revenue. Here the Law of Numbers applies, along with the Law of Desire―unless you align your sales process to how your prospect wants to buy, your leads won’t convert.
The only way to get around this is to do your due diligence at the early-early front end of the prospect’s buying process where your insight can exert influence. [See point one above].
Many times, the buyer doesn’t yet know the importance of each RFP criterion. It’s the perfect time for a knowledgeable salesperson to influence the prospect’s ranking of criteria.
In an upcoming white paper, we discuss the prospect buying process: Is it by committee? Who are the key players? Is it by the numbers? What issues take precedent? Limitless nuances lurk throughout every prospect’s decision making process. Do your best to plan for as many as can be possibly known.
Remember, by the time the RFP hits, the prospect may have already made up her mind.
If you want to win the largest percentage of incoming RFPs, understand ahead of time the prospect’s decision criteria, and then set about to influence that criteria.
If you are simply responding blind to RFPs don’t waste your time, staff and resources. You won’t get the results. Sure you can win your share, based on your company’s resources, but why not improve your odds with advanced knowledge and a sound strategy.
Follow these three steps to get ahead of the RFP process—Target your market, build relationships early with prospects, and proactively find issues and present solutions well before the RFP process—then celebrate your well-earned success.
See you on the upside, Bill
P.S. Look for our new white paper soon on the ins and outs of winning RFPs in greater detail.