RFPs Are A Waste of Time
Posted by Ned Miller on Fri, Aug 26, 2011 @ 04:47 PM
Thinking about responding to an RFP? Don’t. It’s a waste of time.
How can I be so quick to offer up such pessimistic advice? Trust me--I’ve listened to too many bankers moan about how they’ve lost such bake-offs.
I was with a bank client last month whose batting average winning RFPs in the last decade was an icy .005. They were convening an internal summit conference to discuss what they could do to improve their chances of success and asked whether I wanted to participate. When they heard my standard answer—“Just Say No to RFPs”—the invitation was rescinded.
OK, not everybody can pass on RFPs. If you’re in Treasury Management or work with public sector entities, you can’t just swear them off (although you might still do lots of cursing behind the scenes as you toil to respond to them.) It’s also tough to thumb your nose at them if by some chance you actually won a major piece of business some years ago from the county or state, and you don’t want to figure out how to fill the hole it would leave in your P&L if you lost it now.
But for most bankers, chasing RFPs is a losing proposition. It’s very difficult to win new business responding to an RFP. And, if you don’t already have a great relationship with the client or prospect issuing the RFP, your chances of prevailing are slim. (I was going to say zero, but I’m trying to be somewhat objective here.)
The only real chance anybody has is to somehow change the rules of the game, to write the RFP rather than respond to it. What do I mean by writing the RFP? In my experience most customers who issue RFPs—and this could include small businesses (yes—some do), multinational companies, governmental entities, etc.—rely on somebody for help in crafting the RFP. If you’re close to one of those customers, you may have an opportunity to shape their thinking. If you can do that, you have a fighting chance to win the prize.
For what it’s worth, I’ve run across consultants who actually provide this service in certain specialty areas for a fee. Most vendors who are asked will do it as a “favor” and clearly benefit if they can artfully position themselves and their capabilities in the best possible light.
I have a friend who as a business banker used this approach successfully with prospects. He offered to help them create an RFP to send out to their current bank and any others of their choosing. The only stipulation was that they sign an agreement stating that they wouldn’t share my friend’s final proposal with any competitor.
Does it always work? No, but neither does responding to an RFP that has been designed by one of your competitors. Your chances are much better if you’re the one writing the RFP.
Bottom line: The relationship you have with the client or prospect is what ultimately determines your success. If you’re working with an RFP-happy company, offer to help them with the task of producing the RFP. If they refuse your gracious offer, don’t take offense. But if you find yourself in possession of a particularly devilish RFP they have cobbled together, think twice before committing the time and resources to respond. I’ll bet you can spend your prospecting energy better elsewhere.
Check out our blog posts on the keys to generating more leads by leveraging your network at http://www.mzbierlyconsulting.com/bank-sales-corner-blog/?Tag=referrals.
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