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Sharon Drew Morgen
What Is A Proposal And Why Do You Need One?
by Sharon Drew Morgen
Do you know anyone who regularly wins bids? Or can boast a balanced relationship between doing the hard work of producing proposals and regularly winning the business?
I’m always amazed at how much energy people put into responding to a Request For Proposal (RFP) in relation to the level of success – or non-success – they realize. And yet they continue to put time and resources into this relatively unproductive activity. |
In fact, what is an RFP anyway?
An RFP is the standard format that companies use to figure out what they need to buy and how they need to buy it (not necessarily who they need to buy it from). Actually, it’s not about vendor choice or price. It’s about learning how to make a decision.
In reality, the process is ineffective for everyone: the buyer and the seller. Indeed, RFPs are nothing more than a different form of sales pitch.
I got a delayed call back from a client who was usually timely in his response. I was surprised at the time lag.
“We’ve just gotten our first RFP from Company X. They’ve always done business with ABC Company before, and this is our first opportunity to get some business with them. We’ve got a team of folks working hard on getting this just right so we can get in there.”
“What is stopping them from using ABC Company this time?”
“Um, haven’t a clue. I’ll call and ask.”
He called back the next day.
“Nothing is stopping them. They are using ABC Company. They just needed a second bid.”
WHAT DO BUYERS NEED
When salespeople receive an RFP there is the assumption that it’s open season – that if they put together a dynamite proposal, they will win the bid. It’s equivalent to the belief that if a seller pitches and presents just the right information in just the right way to just the right people, buyers will be ready and willing and able to buy.
How many millions of great proposals have ended up in the bin? How many millions – um, billions – of person-hours have gone into proposals that failed? Why? Because the product was bad? Because the proposal was bad? Because the client didn’t need the vendor?
Of course not. Then why?
Let’s look at this from the buyer’s side and retrace some of the ideas we’ve discussed in these newsletters before.
To start with, buyers send out RFPs to those companies they believe can help them. So they have already vetted you by the time you get the RFP. And, quite honestly, they can find out much of what you’re including in your proposal on your website. What is it they really need from you then?
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Buyers have needs that exist within a complex system of people, initiatives, relationships, and rules. Buyers can’t just “make a purchase”: their internal systems are too complex. They need to cover their bases internally before they bring anything new into their environment. And, when it’s a decision to do something they’ve not done before, or bring in something that will shift existing configurations, they will invariably run up against issues that have far greater consequences than anyone from the outside could imagine.
But people don’t make decisions based on information. People make decisions based on meeting their criteria – their values, beliefs, ethics, history, fears, hopes, initiatives, relationships, and even unconscious, idiosyncratic reasons that no one from the outside will ever understand.
Sales people have this simplistic belief that if they pitch, present, propose their solution in just the right way that the buyer will know what to do with it. Obviously – and millennia of failed proposals, presentations, and pitches will bear me out – this doesn’t work. (The larger question here, of course, is why they keep doing it.)
WHAT PROBLEM DO RFPS SOLVE
People decide only when criteria get aligned. Once people and groups understand how to get their criteria met, then they need the appropriate information to match the data with the criteria.
But since companies do not know how to line up their criteria, they send out RFPs in the hope that they will get back the type of information that will lead them to discover their criteria.
To help explain this, I’d like to go back for a moment to the original example I gave of Company X above. Once we realized that responding to the RFP would do nothing but waste their time, my client and I put together a list of criteria-based Facilitative Questions that we knew (because of my client’s expertise as a solution provider) needed to be answered and obviously weren’t being addressed.
My client sent them a brief letter, telling Company X that they’d love their business, but thought they could help them best by offering the enclosed questions. A sampling of these questions (we actually sent two pages of Facilitative Questions) included:- How will the product or service fit in with existing systems?
- How will the users know to buy-in to the new solution? How will you know when they are having difficulty?
- What type of service will maintain the new offering – and can it be handled internally or need an external resource to manage it?
- What are the different ways that a new product will support the desired results? Create a need for additional systems? Create confusion within the different departments? And how will that be managed?
- How will the buyers know that one solution is better than another?
- How will they know that one vendor will give better service than another vendor before they choose one?
A few weeks later, Company X called my client and thanked him, saying that he recognized the importance of the questions although he couldn’t answer many of them. He said he hoped my client didn’t mind, but he was giving the list to ABC Company to incorporate in their solution and that my client would be strongly considered for their next project.
Six weeks later, after the project had already begun, Company X fired ABC Company after an eight-year relationship, and called my client, asking them to pick up the project. The reason? ABC Company was not incorporating responses to our questions within their project plans.
My client got a two-year, multi-million dollar project because of a list of questions – or, more accurately, because the questions exhibited to Company X that my client understood their criteria and were aware of the true underlying, systemic issues that needed to be managed. They never responded to the RFP.
Click Here to Read the Full Article
| | From the Forum: | | Marketing Advice | | I have written an ebook and need some marketing advice. My paid advertising is beginning to pay off slowly and my affiliate partners are selling successfully, but I really haven't found the right websites or promotion tools to make sales really take off. ... |
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Sharon Drew Morgen is the author of several books, including The Competitive Advantage: Helping Buyers Buy, Selling with Integrity, and Sales on the Line. She is an international entrepreneur, speaker and sales trainer. Her clients include IBM, KPMG, and DuPont. She can be contacted at sdm@austin.rr.com.
To find more information on her latest book—Buying Facilitation(R): The New Way to Sell That Influences and Expands Decisions—and to reflect on your sales strategy, click here. |
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