Friday, August 24, 2012

The RFP Process -- Full Disclosure or Not?

Some people send out lots of requests for proposals whether it's in their business life or in their personal life. Others respond to a lot of them. Recently, I was in that first category for a change, but far more often, I am one of the people responding to a request for proposal (RFP).

My most recent endeavor in requesting a proposal was in my personal life. My wife and I needed to engage a painting contractor for our home. We sought bids from several firms.

In each case, we told the salesperson or proprietor what type of paint we planned to use. In this case, it was a particularly high end paint that is designed to last, even in the hot and humid Atlanta weather where torrential summer thunderstorms are the norm. A keen observer should have learned something from that. We also told each potential bidder which contractors we were talking to. In my opinion, the smartest contractors took the opportunity to compare and contrast their own services with those of their competitors. Obviously, they slanted the analysis in their own favor, but we learned things about each potential vendor in the process that we would not have learned had we not been honest and open on our side.

I also get my fair share of RFPs that I have to respond to. Usually, I will ask for a lot of information. I want to know who I am bidding against.

Why?

Here are a few reasons:

  • The group of potential consultants from whom the prospect has chosen to request a proposal tells me something about the company's mindset. It may even tell me that I don't want to bid because it's clear that I have no shot at winning, but have simply received the RFP as a courtesy.
  • Ultimately, if I win the bid, I want my client to be happy with the services they receive. For this to happen, it's helpful if I can compare what I have to offer to what my competitors likely have to offer. Of course, I am going to try to use this to my advantage, but my competitors can and should as well. But, from the client's standpoint, this should help them to make a better and more informed choice of consultants.
  • I may even make a statement to the prospect to the effect that if they are looking for what I am going to refer to here as style #1, they would be best off with Consultant X, but if style #2 is a better fit for them, then we would have a very good relationship with each other.
The client wins as well. The eventual successful bidder knows things about their client up front. They don't have to burn time and money on the learning process. Because of that and because consultants will be able to make more educated selling decisions, something else important happens that is of benefit to the client.

What's that?

If the consultants who are bidding think they understand the process and really go after the opportunities that they think are the right ones, they will price them more aggressively. That's right; consultants want the work where they know they are the right fit and they will bid more aggressively.

So, with full disclosure, the consultants (or other vendors) win and the clients win. Everybody wins. Isn't that the best result?


2 comments:

  1. Full disclosure is always the best policy, especially when it comes to disclosing budgets. Running the RFP Database we see all sorts of RFPs, and it's amazing the types of situations evolve when a RFP gets 100+ proposals...

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  2. David, thanks for reading and replying. I read your post about disclosing budgets and I agree wholeheartedly. Sometimes, even though an RFP may tell you that the prospect is looking for something in particular, the budget says something entirely different. Knowing the budget gives a bidder the opportunity to craft a consultative proposal within the scope of the prospect's budget.

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