What is a Proposal and Why Do You Need One?
Do you know anyone who regularly wins bids? Or can boast a balanced relationship between doing the hard work of producing proposals and regularly winning the business?
I’m always amazed at how much energy people put into responding to a Request For Proposal (RFP) in relation to the level of success – or non-success – they realize. And yet they continue to put time and resources into this relatively unproductive activity.
In fact, what is an RFP anyway?
An RFP is the standard format that companies use to figure out what they need to buy and how they need to buy it (not necessarily who they need to buy it from). Actually, it’s not about vendor choice or price. It’s about learning how to make a decision.
In reality, the process is ineffective for everyone: the buyer and the seller. Indeed, RFPs are nothing more than a different form of sales pitch.
I got a delayed call back from a client who was usually timely in his response. I was surprised at the time lag.
“We’ve just gotten our first RFP from Company X. They’ve always done business with ABC Company before, and this is our first opportunity to get some business with them. We’ve got a team of folks working hard on getting this just right so we can get in there.”
“What is stopping them from using ABC Company this time?”
“Um, haven’t a clue. I’ll call and ask.”
He called back the next day.
“Nothing is stopping them. They are using ABC Company. They just needed a second bid.”
WHAT DO BUYERS NEED
When salespeople receive an RFP there is the assumption that it’s open season – that if they put together a dynamite proposal, they will win the bid. It’s equivalent to the belief that if a seller pitches and presents just the right information in just the right way to just the right people, buyers will be ready and willing and able to buy.
How many millions of great proposals have ended up in the bin? How many millions – um, billions – of person-hours have gone into proposals that failed? Why? Because the product was bad? Because the proposal was bad? Because the client didn’t need the vendor?
Of course not. Then why?
Let’s look at this from the buyer’s side and retrace some of the ideas we’ve discussed in these newsletters before.
To start with, buyers send out RFPs to those companies they believe can help them. So they have already vetted you by the time you get the RFP. And, quite honestly, they can find out much of what you’re including in your proposal on your website. What is it they really need from you then?
Buyers have needs that exist within a complex system of people, initiatives, relationships, and rules. Buyers can’t just “make a purchase”: their internal systems are too complex. They need to cover their bases internally before they bring anything new into their environment. And, when it’s a decision to do something they’ve not done before, or bring in something that will shift existing configurations, they will invariably run up against issues that have far greater consequences than anyone from the outside could imagine.
But people don’t make decisions based on information. People make decisions based on meeting their criteria – their values, beliefs, ethics, history, fears, hopes, initiatives, relationships, and even unconscious, idiosyncratic reasons that no one from the outside will ever understand.
Sales people have this simplistic belief that if they pitch, present, propose their solution in just the right way that the buyer will know what to do with it. Obviously – and millennia of failed proposals, presentations, and pitches will bear me out – this doesn’t work. (The larger question here, of course, is why they keep doing it.)
WHAT PROBLEM DO RFPS SOLVE
People decide only when criteria get aligned. Once people and groups understand how to get their criteria met, then they need the appropriate information to match the data with the criteria.
But since companies do not know how to line up their criteria, they send out RFPs in the hope that they will get back the type of information that will lead them to discover their criteria.
To help explain this, I’d like to go back for a moment to the original example I gave of Company X above. Once we realized that responding to the RFP would do nothing but waste their time, my client and I put together a list of criteria-based Facilitative Questions that we knew (because of my client’s expertise as a solution provider) needed to be answered and obviously weren’t being addressed.
My client sent them a brief letter, telling Company X that they’d love their business, but thought they could help them best by offering the enclosed questions. A sampling of these questions (we actually sent two pages of Facilitative Questions) included:
– How will the product or service fit in with existing systems?
– How will the users know to buy-in to the new solution? How will you know when they are having difficulty?
– What type of service will maintain the new offering – and can it be handled internally or need an external resource to manage it?
– What are the different ways that a new product will support the desired results? Create a need for additional systems? Create confusion within the different departments? And how will that be managed?
– How will the buyers know that one solution is better than another?
– How will they know that one vendor will give better service than another vendor before they choose one?
A few weeks later, Company X called my client and thanked him, saying that he recognized the importance of the questions although he couldn’t answer many of them. He said he hoped my client didn’t mind, but he was giving the list to ABC Company to incorporate in their solution and that my client would be strongly considered for their next project.
Six weeks later, after the project had already begun, Company X fired ABC Company after an eight-year relationship, and called my client, asking them to pick up the project. The reason? ABC Company was not incorporating responses to our questions within their project plans.
My client got a two-year, multi-million dollar project because of a list of questions – or, more accurately, because the questions exhibited to Company X that my client understood their criteria and were aware of the true underlying, systemic issues that needed to be managed. They never responded to the RFP.
HOW CRITERIA CREATES DECISIONS
In general, people in companies do not know how to manage, understand, develop, or uncover their criteria on their own. They are too close to the situation.
Think about yourself for a moment. What is it that you have been promising yourself you’re going to do? Go to the gym? Lose weight? Catch up on all your reading? You know you need to do those things. But you don’t. Why? Is it because it’s a bad gym? Or because you like tight-fitting pants? No – it’s because you haven’t figured out yet how to line up your behavior with your criteria, and until you do, you won’t change your behavior [hint: it’s about changing your beliefs. If you believe you are a healthy person, you’ll go to the gym whether you like to or not, for example. Your behavior will track your beliefs in order to keep you congruent.].
Once someone from outside can lead you through your personal, unique decisioning process, you are able to recognize the criteria that you need to meet before you can change. After all, systems seek stasis, and whatever product or service you are selling in your proposal – no matter how wonderful or how badly needed or how value-packed – it will bring some form of chaos to the status quo. And before the system will seek chaos, it will need to know how to reorganize itself rapidly after the intrusion that the new solution brings with it.
Once buyers know what a solution will have to include, they will know exactly what they need from a vendor and be able to use their criteria to choose efficiently – possibly even without an RFP.
As a potential vendor, instead of offering buyers an RFP filled with product and service information, use the RFP as a platform to exhibit your skills. Show them that you recognize your job is one of a true trusted advisor, and you will be helping them decide how to align their criteria and manage their discovery/change in addition to having a great product.
THE SELLER’S NEW JOB
Here is the strategy: When you receive an RFP, call the client and ask him/her if you can work through some Facilitative Questions with them.
Then, use the decisioning sequence in Buying Facilitation and go down the Funnel with the questions, starting with helping them discover where they are, what’s missing, and how they got there. [Note: for the specifics of the questions and sequencing, go to www.newsalesparadigm.com and buy my new ebook Buying Facilitation: the new way to sell that expands and influences decisions.]
Once the nature of the questions becomes obvious – they help the buyer discover their own answers – the person you are speaking with will either get others on the phone, or ask you to come in, or do something equally extraordinary (If indeed they are seeking a new vendor. Close to 70% of RFPs are sent just for a second bid and to better understand their criteria for success. Most companies have chosen their vendor before the RFP is ever sent out.). You may not get all the decision makers, and possibly your contact will be the only person you speak with, but take what you can get.
Whatever happens next will move you out of the competition. You will have exhibited your value-add, and either be chosen this time, or receive some future consideration.
This will work in any situation except for government agencies that, by law, need to issue RFPs. But even for government agencies, you can mitigate the standard problems inherent in responding to RFPs by calling your contact and using Buying Facilitation to position your proposal.
Remember that companies need the answers to the Facilitative Questions – the answers are for the buyer to learn from, not for the seller to sell with. They will discover the answers eventually – with you, or without you.
By using the facilitative questions, you will be:
1. helping the buyer line up all of those mysterious variables that they will need to address prior to making a decision;
2. showing the buyer how to discover and handle hidden problems that they would encounter when bringing in a solution (and that are actually causing them to need an RFP to begin with).
3. demonstrating your ability to be a true consultant and advisor so if nothing else, after you end up responding to the RFP like everyone else, they will know the quality of your service;
4. moving you out of the pack of look-alike competitors.
I can’t guarantee that by doing this you will not need to respond to the RFP (although, anecdotally, dozens of people I’ve trained have told me they got the business just from the phone call or subsequent visit). But at least you will then know how to create a competitive proposal that includes more than just product information.
After all, at the end of the day, the company sending out the RFP only seeks to get their needs met, cover their bases, learn what they need to learn, and solve their problem with the least amount of disruption.
Responding to an RFP will not give them what they seek. But using Buying Facilitation on them will teach them how to seek precisely what they need to know – and give you a more supportive role in the meantime.
Should you wish to learn more about this, go to www.buyingfacilitation.com and purchase my ebook Buying Facilitation: the new way to sell that expands and influences decisions