Beware of RFPs! Don’t Take the Bait for the Vendor Trap!

By Mark Shonka and Dan Kosch, Co-Presidents, IMPAX Corporation

At first glance, an RFP can appear to be a gold-engraved invitation to make a sale. In fact, in these tough economic times, it can feel like a victory to even be included on a bid list. Here’s the reality: RFPs aren’t created for you to make money, they’re created to make commoditizing you easier.

In essence, RFPs are bait for the vendor trap and must be handled with care. Be selective. Analyze every opportunity. Set criteria to determine whether an RFP is worth a response by asking:

• Did you influence the RFP specs?
• Are you the incumbent?
• How badly does the customer want you involved, and why are they involving you?
• Are you merely column fodder or are they sincerely interested in your services?
• Is the organization a good fit for your solution and values?
• Do you the have the ability to do research beyond the RFP?
• Do you understand the goals and strategies of the organization and key departments beyond what is outlined on the RFP?
• Do you have strong gatekeepers?
• Is there a consultant handling the process? What is your relationship with them?
• Do you have coaches? These are people who want you to win and will give you inside information about their organization because if you win, they win.
• Do you have access to the decision makers and do you have good relationships with people of influence? Can you make a presentation to them?

Your answers will determine whether an RFP is worth pursuing and how you should go about it.

But attaining the answers means that you must break typical RFP rules like not contacting anyone outside of procurement and not doing research. It’s more than worth the risk. Consider the case of Chris Thompson, a veteran high-tech medical sales executive with GE Healthcare Integrated IT Solutions. His client had been using one of his company’s applications for years – and making it a scapegoat. It was the first to be blamed for every technical difficulty. So when the opportunity came to sell a more advanced application, Thompson was the sales professional least likely to win the highly sought-after contract.

That meant it was more critical than ever that he break the rules.

He did so by reaching beyond procurement to conduct research meetings with other contacts in his network. These contacts became coaches who began to depend on him as a resource for other business situations within their organization. By breaking the rules and reaching beyond procurement, Thompson was transformed from a mere salesman into a valued business partner.

You can bend the rules and get out of the vendor trap by simply asking your coaches, an RFP administrator, a procurement executive or senior-level department executive for a little more information so you can formulate a better response. Ask questions like:

• What is the purpose of the RFP?
• Who is the sponsoring executive?
• Why was my company included?
• Who else was included?
• What is the decision process?
• Who will make the final decision?
• At what point in the process will we be able to meet with the decision maker?

Research often reveals a difference between what the RFP says a customer wants and what the decision maker is genuinely seeking. With this knowledge, you can place yourself light-years ahead of the competition by proving that you understand the customer’s business far better than anyone else.

There is one final qualifying question that is almost always a deal-breaker for us and our clients:

“Can we present our response to the decision team?”

Presentations are critical to us because they can set us apart from the competition: We put the customer first by confirming our understanding of their environment beyond just their needs; describing how a relationship between our companies can impact their key objectives, strategies and business issues, and outlining specific recommendations and commitments needed to carry them out.

If you build relationships like Thompson did with his client, attaining an opportunity to present will come naturally. You see, he had given his coaches what they needed to succeed. In turn, they gave him what he needed to succeed: A meeting to present to the CEO and his executive team.

When Thompson reached the executive suite, he had so effectively cultivated his coaches that his reputation preceded him. Many of the key decision makers were already prepared to say yes to his proposal. Others were hoping for his demise, especially one executive who was one of the world’s leading authorities on a competitor’s application.

Thompson began his presentation by communicating critical inside information he had learned about the organization – the goals, objectives, challenges and issues that can only be discovered by communicating with supportive coaches. Next he gave a brief, but thorough, overview on how his application would help them respond effectively to those goals, objectives, challenges and issues. Finally, he outlined how, as business partners, they could move forward toward greater success than ever before.

Even a selling veteran like Thompson was stunned by the outcome.

“The CEO was so impressed, he couldn’t believe I knew so much about his organization!” he smiles. “What’s more, he asked to use slides from my presentation for his own speaking engagement with his board of directors!”

And, even those who were rooting for the competition were won over.

“The presentation made it easy for the key decision makers to say ‘yes,’” points out Thompson. “Most importantly, they said ‘yes’ without any haggling about price. It was a long sales cycle, but it was well worth it. The contract represented 20 percent of my quota and helped me achieve the best sales year of my career! Even better, I have a great relationship with the client which will help ensure more sales long into the future.”

Outcomes like Thompson’s are not unusual – in fact, they’re the norm. And remember: If the customer won’t let you present, it’s a sure sign that the RFP is merely bait to lure you into the vendor trap. Your time is much better invested with companies that are interested in your value, not your price.