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RFPs from the Buyer’s & Seller’s Perspective

What is an RFP?

A Request for Proposal (RFP) is a call to potential suppliers to submit a proposal for selling of goods or services. An RFP initiates a bidding process between suppliers to try to do business with the company who submitted the RFP (Rouse, 2007). Generally RFPs are procured through personal relationships, websites (corporate and third party RFP hosts) and word of mouth. The content of an RFP is vital to the success of the project, as it clearly outlines what the company wants from the suppliers (Rouse, 2007). Sometimes companies will issue a Request for Quote (RFQ), which is a pared-down version of a RFP when the company requires something that is clearly defined. An example of this would be a need for specific equipment. Another variant is the Request for Information (RFI) is a call to potential suppliers to provide information about themselves. This is generally used to narrow the list of potential suppliers so that the company can put a future RFP to a narrower audience. (Mhay & Coburn, 2008)

From Buyers Perspective

In order to write an effective RFP there are numerous components that should be included to increase chances of success. A brief background of the organization should first be included to give a sense of what the organization stands for and believes in. Goals should be communicated in a way that focuses more on what is trying to be achieved than what the end product is expected to look like which gives the seller space to explore and share their own creative approaches to achieve the buyers’ business goals. Project requirements should be detailed including information on launch dates, deadlines, legal clearances, etc which will help to determine unqualified candidates as well as deliver more accurate results. Buyer’s expectations should be included in the RFP to reduce the risk of receiving irrelevant information and instead receive only pertinent information for that particular project/request. The final three components that should be included are a timeline, budget, and questions section. These sections give sellers the information needed in order to develop the best solution to meet budget and timing restraints (Ramsey, 2011).

From Sellers Perspective

When responding to an RFP as a seller there are a few things to consider when trying to ‘win’ the deal. The first and most important, is knowing the buyer is looking before they issue the RFP, or in Ritchie Bros. case the RFI. Robert Potter, the author of the article Three Keys to Winning RFPs’ states, “If you wait for the RFP, you have already lost”. The goal here is to gain the inside track when it comes time to for the prospective company to contract a seller. If a seller does not have a pre-existing relationship with these buyers, the first step is become a considered service provider and then begin working up the hierarchy. Potter refers to this as penetrating the ‘invisible’ market. The goal of this process is when it comes time to sell, the company will contact your company.
The second thing to consider when responding to RFPs is deciding if a particular RFP is worth the time and resources that will be spent responding it to. Responding to an RFP can take weeks, even years. These opportunity costs must be considered and weighed against how the time and resources could be spent elsewhere.  Some questions to consider when making this decision include:

  • Do we have an existing positive relationship with the buyer?
  • Do we have the needed skills, capabilities or resources that are critical to the project’s success and are difficult for competitors to copy?
  • Does the client understand and recognize our unique selling proposition (USP)?
  • Do we have access to the company before submission or presentation of the RPF?

The third thing to consider when responding to an RFP is the process that the company goes through when considering the applicants.
There are three stages the buyers will go through; the search phase, the screening phase and the selection phase. The key to passing the search phase it to be sure your company is invited to submit an RFP based on the pre-existing relationship.

The second phase, the screening phase, is intended for the buyers to find out if the sellers that have submitted RPFs are capable and match the decision criteria pre-set by the buying company. These criteria are pre-set before the RFP is posted. To pass this phase the seller must differentiate themselves from their competitors and communicate that their USP complements the buyers pre-existing criteria. It is important to call on the pre-existing relationship at this point and find out exactly what they are looking for and find a way to communicate you can do it better than any other competitor.

In the third and final phase of selection the final decision of who wins the RFP comes down to irrational emotions and personal preference. At this point the buyer has narrowed the group to a small number of applicants who are all able and willing to complete the project. The final decision comes down to the way the buyer feels about the seller and if they are comfortable, confident and can trust the sellers and the key account rep. At this point the personal brand of the key account rep plays a huge role in the final decision.

Issues with RFP Process

Sometimes sellers miss out on possible deals because they cannot be bothered to get tied up in an RFP competition. This is particularly true when sellers sense they may have been invited to bid simply to provide a façade of competition while the buyers intended to pick a favoured seller anyway. A second problem is that the investment of time in the RFP process is expected to be made solely by the seller. If the prospective seller has questions, the buyers often won’t answer or meet with the seller unless there is a positive pre-existing relationship (Schachter, 2013).

Best Practices when responding to an RFP

1. Be concise. The initial review of a RFP response is commonly a quick scan, not a thorough and thoughtful analysis. This leads to responses being rejected on the basis of how they look, rather than the content. Therefore it is important to be quick and to the point. If the agency has what the prospect is looking for, it will be seen immediately and the clarity and brevity of the communications will be appreciated (Morgan, 2009).

2. Customize the response. Almost every agency has standard language to describe their philosophy, their capabilities and their process. Agencies should never “mail it in” by simply cutting and pasting from a previous submission. Every question is an opportunity to demonstrate understanding of the category, the audience and the prospect. Whenever possible, responses should be framed in a way that demonstrates knowledge of the client’s brand, market environment or audience (Morgan, 2009).

3. Address the prospect’s criteria, not your own agenda. Everything you say should be relevant to the client and the assignment by addressing the specific criteria the client has identified as important. Offering creative ideas is a good way to demonstrate your thought process and creativity, but only after thoroughly addressing the question asked by the prospect. It should also be included that all preliminary ideas put forth can be developed further or rejected once greater understanding of the situation has evolved (Morgan, 2009).

4. Demonstrate your creativity and professionalism in the response. The RFP response is an opportunity to establish your agency as a professional resource that can solve a business problem and help them sell a product or service. But the RFP response is also an opportunity to provide a statement of your agency’s style and creativity as well as your salesmanship. By making your RFP response stand out in a crowd, you send a message that you can make their company stand out as well (Morgan, 2009).

Recommendations    

Create a RPF committee to determine the RFP’s decision criteria made by the buyer and provide answers to the RFP, rather than going to each department on an ad-hoc basis.

Having a team of a people from each department providing the information needed by offering their own insight as to why the info was requested aiding in determining what the pre-existing decision criteria is, and decrease the time needed to complete the response.

 

Bibliography

Mhay, S., & Coburn, C. (2008). Retrieved from http://www.negotiations.com/articles/procurement-terms/

Morgan, D. (2009). The 5 c’s of an effective RFP process. Marketing Thought Leader. Retrieved on November 4, 2013 from http://marketingthoughtleader.blogspot.ca/2009/08/five-cs-of-effective-rfp-response.html

Potter, R. (NA) Three Keys to Winning RFPs; get there first, pick the right battle and play to win. Retrieved from http://gator280.hostgator.com/~rapotter/threekeys.pdf

Ramsey, J. (2011). Running a successful RFP. Purchasing B2B, 53(7), 32. Retrieved from

http://ezproxy.kwantlen.ca:2048/login?url=http://search.proquest.com/docview/905989288?accountid=35875

Rouse, M. (2007, July). What is request for proposal (RFP)? – Definition from WhatIs.com. Retrieved November 8, 2012, from http://searchitchannel.techtarget.com/definition/request-for-proposal

Schachter, H. (2013). Turn that RFP into a really fabulous process. The Globe and Mail. Retrieved on November 5, 2013 from http://www.theglobeandmail.com/report-on-business/careers/management/turn-that-rfp-into-a-really-fabulous-process/article11155747/

 

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Corporate Blogging Done Right

My company recently decided it was time to join the blogging world. Naturally working in such a large company there was a number of different opinions concerning what the blog should be about, what kind of information it should included and how it will increase the bottom line. After hearing /watching these conversations I decided to look into corporate blog best practices.  Below are a few best practices I think that are important outlined in an article titled “10 tips for corporate blogging” on Mashable.com written by Erica Sallow.

Establish a Content Theme and Editorial Guidelines

Establishing a content theme and editorial guidelines allows the reader to have a clear understanding of what the blog is about and why they should care to read it. The article recommends to “chose a blog name and theme that fits well with your company’s expertise, but don’t be afraid to branch out into a larger space.” I believe by doing this the company is able to position themselves as the information authority by blogging about the company’s expertise but also communicating they are innovative by discussing and new ideas and changes.

Editorial guideline are a great place to start when hashing out what fits in the blog and allows the writer to stay on track and always delivery well thought out content.

Choose a Blogging Team and Process

Being that blogging is a form of content marketing, the content of a blog must be perfect (or close to it). By choosing a team of core bloggers with great writing skills and outgoing attitudes the blogs will be reflect these features and as  create engaging and interesting content..

The article outlines two options regarding the process the blogger (and/or blogger team) must follow.  One, having an editor or a group of editors and two, allowing the bloggers to post at their own will. I believe it is important to have an editor to make sure the blog doesn’t ‘miss the mark’ in terms of content, and make sure it supports the company’s brand. Also, any writer will tell you it is difficult to edit and fact check their own work. That being said, I believe a best practice is to have an editor.

Humanize your Company

This relates to choosing a blogging team and process. The article suggests “think(ing) of it (the blog) as a conversation between people, not between a brand and one person.” Be allowing blogger to have their own by-line on blogs is makes the communication feel more like a conversation with an expert, rather than a monotone ‘how to manual’ from a brand. The article also suggest allowing the blogger to have their own voice and writing style. While this can be beneficial I believe the voice or writing style needs to be complementary to the brand.

Avoid PR and Marketing

This is often hard to do because a blog essentially a marketing tool. The article suggests “if (the blog is) maintained correctly, it will act as a repository of real analysis and opinions provided by your company’s fine employees.” You often see corporate blogs writing about new promotions or upcoming sales. The article suggests “stay(ing) away from trying to sell your readers. There are appropriate venues for that, and your blog shouldn’t be one of them.” It is important to keep this in mind when choosing a blogging team and/or creating an editorial calendar.

Welcome Criticism

The article suggests to “make it a policy to welcome criticism, thinking of it as an opportunity for feedback and improvement.” This is a best practice that I believe can be applied to anything done in the corporate world, or life for that matter. Being that blogging is a form of social media welcoming criticism and dealing with negative feedback is part of the game and can be very useful when done right.

Outline a Comment Policy

The article warns “if you open up your blog for full feedback (which you should), you will get a variety of comments — constructive, complimentary, hateful, and spam. Be prepared for everything.” The article suggest creating a comment policy that will help your team deal with each comment in the correct way and make sure everyone else on the team is doing the same thing. The article suggests having a process when deciding when to reply, delete, by pass or answer a comment. I believe it is important to answer every comment and only removing comments with offensive language or inappropriate content. Each comment presents an opportunity for customer relationship management, risk management or customer engagement.

Get Social

By adding social media share tools to your blog you are allowing your “readers to promote your work” according to the article. The article also suggests passing on comments to the appropriate person in the company and having them respond to the customer while maintaining the same personal tone. I think is this great advice because it shows that the blog is not just a place for friendly posts and updates but rather a genuine communication tool that allows the customer to reach further into the company if they would like. By responding in a personal way the company is able to strengthen these new relationships and hopefully generate a positive brand image (and sales).

The article also suggests “promoting your social presence on your blog, by implementing links, buttons and widgets that link to your social profiles. This will enable readers to stay connected with you across platforms.” In my opinion this only works if it is done consistency. When using social media it is important to choose tools that are complementary to increase you social media presence and perceived know how.

Having a Strategy

It is easy to get lost in the social media world and to only use tools because they are available, or worse, because everyone else is doing it. Think anything else in business a bog needs a clear strategy that can guide the blog through times of industry and technology change.

Source: http://mashable.com/2010/07/20/corporate-blogging-tips/

Other links of interest:

http://www.businessesgrow.com/2011/01/05/the-10-best-corporate-blogs-in-the-world/

http://blogs.constantcontact.com/product-blogs/social-media-marketing/negative-feedback-on-social-media/

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