How often do you typically reply to Requests for Proposals?

How much does it cost you to create, package and create one of these proposals?

What percentage of RFP responses do you typically win?

Most companies feel compelled to obediently reply when they receive a proposal request.   When they respond, they often do so VERY prematurely.   They substitute promptness and volume for efficiency and effectiveness, losing sight of the correct goal of maximizing growth in revenues and profit.   Here are just a few of the costly beliefs that lead to this counter-productive behavior…:

·       “We really want the business!”

·       “All of our competitors will respond!”

·       “We need the business!”

·       “If we don’t respond, we might lose credibility.”

·       “We won’t get future requests and opportunities if we don’t respond.”

·       “We’ll never get this business if we don’t submit a proposal.”

·       “This is a good opportunity to WOW them with our incredible capabilities!!!”

·       “This might be a way to get our foot in the door.”

·       “We historically win 15% of bids. Since we don’t know which 15%, we better reply to every one.”

·       “We may not be their preferred vendor, but would like to be a backup option”

The majority of companies that receive RFPs do respond to them, quickly.  For many responders, the expense of preparing a proposal can be substantial (including time for design, engineering, estimating, opportunity costs, and more).  All of these costs cut dramatically into margins and the bottom line.

The majority of companies win only a very small percentage of the bids they submit.  So the cost of creating proposals for the few sales that are won must be distributed across the many submissions of those that are lost.

Many companies never give a second thought to replying to RFPs.  They behave reactively, versus proactively.   “Of course we need to be responsive, it’s the way we’ve always done it!”

I’m not suggesting here that you should ignore RFPs.   The question is not if you should respond, but HOW and WHEN.

Most salespeople (and the companies that employ them) have lost millions of dollars of revenue (and profit) because of a destructive behavior disorder known as Premature Satisfaction™.   Replying to a blind RPF is a glaring and extreme example of this disorder.

Premature Satisfaction™, and the resulting volume of lost profit it creates can be reduced and subsequently eliminated by implementing an effective sales process.   UnCommon Sense Buyer Facilitation^© is one example of such a process.   If sending a proposal is a critical (or mandated) part of your buyer’s purchase protocol, the submission of the proposal should be one of the final steps in your process.

Premature Satisfaction™carries a consequence in 100% of cases.   In the BEST case, it will cost you time, expense, and profit.   In the worst case, it can destroy trust, lose business you should easily be winning, and remove your company from future consideration as a potential product or solution provider.

There are five (and only five) reasons that you will ever receive a Request for Proposal:

1. The prospect wants to drive prices down by creating a bidding war.
2. Their internal policy mandates a certain number of bidders, and you are a convenient filler.
3. They want to buy from your competitor but don’t want to be taken to the cleaners on price.
4. They want to buy from your competitor and need a high bid or two to justify their decision.
5. They would prefer to do business with you but need you to submit via their formal process.

No other reasons exist.  If you aren’t in category #5, you should not be proposing.

Contrary to some conventional thinking, a proposal is not a selling or closing tool.    Companies will not buy from you because of your beautiful proposals, and proposals don’t differentiate you from your competition.  Your MVP Quality - specifically your trustworthiness, ability to connect, questioning, listening, discovery skills, and sales process are the things that will set you apart from your competitors.   Tons of research and buyer polls support these facts.

So next time someone requests a proposal from you, do NOT get busy creating and firing one off.   Instead, learn why they sent it to you, why they want you to propose on this particular solution or configuration, and why they are asking you to solve their problem in the specific way they have outlined.    If necessary, get the specs of the RFP changed before proposing.

The process I’m describing here applies whether you are addressing a highly formalized, bureaucratic, or institutionalized proposal request, or simply a “Hey, can you send me a quote?”   Remember, satisfying prematurely always carries a negative consequence.

So before investing your valuable time, money, and energy putting together a World Class Proposal, make sure that you know they want to buy from you and that the business belongs to you if you want it.   If there is any question at all or if you are not sure, you are simply not ready to propose.    End of story.

If you are sure, you can then put your proposal in any font, color, and package that excites you.  In other words, the buyer has effectively written the proposal for you.   You have simply documented it…

I know this all may be a tough pill to swallow if you work in a company that has developed a habit of rapid-response proposal generation.   Like all habits, this one might take a little time to break.  I can promise the reward will be well worth it.

To Your Freedom…

Joe

Copyright ©   Joe Zente  2018.   All Rights Reserved.