As someone who works with outsourced call centre
vendors to improve their marketing and sales
functions, I often come across some very unusual
things & when you examine things in detail, you will
be surprised how much time is spent on responding to
RFPs and how little business they result it.
The sales people love RFP's especially when it doesn't involve a significant amount of work for them. The process from RFP through to project award can be long & this enables the opportunity to sit on their pipeline for a considerable amount of time. Larger clients are more likely to request RFP's and so the presence of a major brand on a pipeline makes the sales person look good to their boss and they've often done a limited amount of work to get that 'opportunity'. However, the truth is that most RFP's are simply a process of tyre kicking to validate the proposal they've already received through their incumbent vendor or for their preferred bidder.
Think through the process
I'm not suggesting that you should never complete any RFP's although in some cases, this is actually the best course of action. At the top-level, you should decide on a policy as to whether you should compete on each process at an early stage. You then decide on whether the criteria are met to spend time (and money) investing in a tender process. I normally suggest that this is a 2-stage process because some of the answers to these questions can be subjective. The first stage is to ask the basic questions with simple yes/no answers. You then decide how many positive responses you need to take this to the next stage. The second stage involves the sales director taking a judgment call on whether to accept the offer to submit a proposal. At the senior level, it's often a good idea to set a target for the amount of tenders which result in new client wins over a given time-period. The questions could include:
- Is this opportunity in an industry sector where you have strong experience?
- Is this opportunity a service where you have strong experience?
- Can you cover all the services required within the RFP?
It's best if you start by asking yourself a series of questions:
- How many RFP's have actually turned into business?
Every outsourced vendor I've ever worked with (and I mean every one) has been surprised by how low this figure is. I've worked with some for whom this has been 0. I've worked with others who have only ever won work through RFP from existing clients or from prospects who have already promised the business prior to the RFP. Of the remaining RFP's, less than 10% ever turn into business in any vendor and with most, it's far less than that.
- Are there certain types of business/industries where you win business from RFP's?
- Are there certain types of business/industries where you never win business from RFP's?
- Are there any services required within the RFP that you simply can't
- Are there reasons why you are failing to win RFP's and are there any t Then before completing each RFP, you should ask yourself a series of additional questions
- Is this for a prospect where we already do similar work?
- Is this for a client in an industry where we are strong?
- Has the prospective client already conducting due-diligence on you including site visits?
- Why has this RFP come about?
RFP's aren't the enemy but they can be a huge waste of time and focus of some of your company's most expensive resources. It's time for outsourcing companies to examine the way they deal with them.