If you have never had contact with a prospect yet suddenly receive a request for a quote or for a proposal, look closely at it before wasting your time. This article provides points for a decision matrix to help decide whether to respond or not.
In 30 plus years in sales and marketing, I have received requests for proposal (RFPs). I have often sought. Unfortunately, by the time some agency or company has invested the time to write their RFP (also known as RFQ, request for quote), they have already decided what they want so my competitor probably helped them write it. How do you evaluate an RFP to see if it is worth investing your time to respond?
I have provided small business clients with a decision matrix that to help them evaluate RFPs, especially unexpected one. While winning an RFP usually means a big sale, you can often make more, smaller sales to prospects matching your ideal customer profile in the time you invest preparing your bid.
Whatever, in order to achieve success in business, it is essential that you get sales in the highest number possible as that will elevate you to a very high position which will inspire others to follow suit and rfp success will seem like child’s play after you get the initial RFP and customers too will feel relaxed in making investment schemes.
When to Do Quote without the Decision Matrix
There are many questions to ask yourself. The first is, “How long will it take to do the quote?” If it is a matter of a few minutes or an hour, then you might choose to do the quote without further evaluation. After all, if it is worth a lot of money, it falls under the rule of thumb, “If you don’t bid, you can’t win.”
On the other hand, if like most RFP’s I have done, it will take research, phone calls, meetings, spreadsheets, writing, and then proofing to ensure you have done everything exactly per the specifications, I recommend using a decision matrix to aid deciding whether to do it or not.
Remember this: all specs mean something. Don’t assume any spec in an RFP is fluff that you can safely ignore. Also don’t assume you can give them better performance if they cite specific performance, like memory requirements or power. Always confirm first with the writer of the specification that improvements are acceptable. Ask for it in writing as an addendum to the RFP / RFQ.
I like using a decision matrix to evaluate every relevant factor on two points:
– Importance (from 1 to 10)
– Our Relative Strength (from 0 to 5)
Base your Importance score on how important this factor has been to your business in past sales you’ve won. Then rate each point by how strong you feel your position is. Finally multiply your importance score by a relative strength on each point. Then total up the lines to get a total score.
Rank a batch of your past bids won to see what total score should be your cutoff. Remember this is a business decision. You may have strong reasons to pursue an RFP below that cutoff. Just know that your likelihood of winning is less.
Points to Use in Your Decision Matrix
– Pre-existing relationship with customer / good positioning within the account
– Ability to influence the RFP process
– Prospect matches your ideal customer profile
– Access to the key decision maker
– Access to all the decision makers or to only one
– Unique benefit or competitive advantage
– Money is committed to the project
– You know the prospects’ motivations, wants and needs
– You have had adequate notice to prepare
– You have a key ally among the decision maker
As a small business, it’s hard to resist jumping on a RFP or RFQ because it’s a potential sale. Nevertheless, my experience says unexpected requests for a quote may waste my time. Use the points above to create a decision matrix. Use your cutoff as your “Go / No Go” score. Regardless, responding is a business decision you make. Hopefully my warning signs will enable you to make better decisions – and feel confident about them.
More from this contributor:
First Person: Know the Objectives of Your Sales Calls
First Person: Are Networking Meetings a Waste of Time?
First Person: When the Cost of a Sale Is Too High