Why Requests for Proposals Are Unhealthy (For Salespeople and Buyers)
There it sits, the big stack of paper that is the Request for Proposal. So much promise, so little hope of winning. You want to spend the time responding to the one hundred and fourteen questions, but you are not sure it is worth your time and energy.
Whether you respond or not, here are some of the reasons the request for proposal process is unhealthy.
The request for proposal process, regardless of protestations to the contrary, assumes that all products and services are commodities, or should be. It assumes that all products and services are pretty much equal, and that by questions of their potential vendors they can choose the best of a bunch of similar offerings. It reduces differentiation, even if it pretends to ask for differentiation. By treating products and services like commodities, it is focused on you selling price.
The same questions are asked of all the competing companies. The same presentation format is requested. When questions are asked, all of the answers are shared with all participants, in order to maintain a level playing field. Then, after forcing all participants into the same box, they say something like, “you all look and sound exactly alike.”
The last thing anyone really wants or needs is a level playing field. As a sales organization, you want an unfair advantage. As a buyer, you want a partner who is differentiated and who deserves and earns an unfair advantage.
Discounting Value Creation
The request for proposal process makes the mistake of discounting the most valuable part of both the buying process and the sales process, the discovery and exploration of needs.
The mistake made here is that, as much as buyers say they don’t want a pitch, they demand, of all things, a pitch.
The request for proposal process asks questions of the companies competing, while providing almost no opportunity for a real understanding of needs. There may be some written needs and requirements, but written statements do not provide the kind of understanding that enables an effective change initiative.
The request for proposal process also includes far too few people in the process. The stakeholders two and three levels deep within the organization are where the real knowledge of what it will take to make change exists.
The process greatly discounts the power of relationships in creating and managing change and producing results, but those relationships are what are essential to actually producing results.
Relationships are not only a benefit for the seller. They are as beneficial—or more—for the buyer.
Relationships create trust. Relationships create understanding. Relationships are what grease the skids, what moves the obstacles, and what eliminates the constraints that prevent real change and the better results that the requests for proposal is supposed to improve.
Respond. Go ahead. Just know that you have to work to overcome a poor buying process, or face competing as an undifferentiated commodity who is selling with both hands tied behind their backs.
- What makes the RFP process so attractive to buyers?
- How do you overcomes the challenges to value creation that accompany the RFP process?
- What can you do to make buying process more effective for you and your buyer?
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