Wait! Should You Respond To That RFP?
Several of my clients are frequently asked to submit a proposal in order to be considered as the supplier for an upcoming project. I believe that before proceeding, several questions should be asked, the most important of which are listed here.
Is this a real opportunity for you or just an exercise for them to internally justify their current supplier? Who is their current supplier? Why are they considering making a change? Will that new manager really take a chance and allow a change with a provider early in his tenure? What criteria will they use to determine which supplier to work with? How will price factor in? Why would they bring in a new supplier when that represents change and change is hard?
What are the odds of your winning the business? You should have a good sense of this based on your previous conversations and tracked history of success with the company. At some point, it becomes futile to continue to work at acquiring business you have little chance of getting, no matter how sexy it seems. Get input from your team, define these parameters, and stick to them.
What lines have you established that you absolutely won’t cross to win business?
Are these clearly defined and in writing? Is your entire team aware of those lines and do they buy in to them and uphold them unreservedly? Are there exceptions that you’d be willing to make, and if so, in which circumstances?
What other filters do you have in place to determine your opportunity costs?
How much time will your team have to devote to complete the required specs by the due date? One of my prospects is constantly in the middle of answering rfp requests and, since they’re relatively small, these requests consume most of the owner’s time. If management needs to be involved, how will their shift in focus affect the team? To what extent will team members need to be involved? Will their personal time be impacted? What other projects will have to be put on hold while the proposal is completed? What will management have to delegate and how will that affect others?
Is this upfront work a financial investment or expense? That depends on why you’ve determined it’s important to respond. Being a go-to provider for a large manufacturing company may sound ideal in theory yet not be in practice. Do you have the only or best turnkey solution? Are you helping them create the specs? Do you need to leverage that relationship to gain other business and credibility in the market? Does your team agree with your rationale? Thoroughly review all of the costs you’ll incur if you’re selected, making sure your desired profits can be met.
We all need to generate new business. Let’s be sure we’re spending our time and resources productively on the opportunities that best fit our business models and allow us to attain the short and long-term profits we desire and deserve.