Which RFPs Should You Respond To?

David brings up one of Blair's favorite topics: how they keep themselves and their clients from being trapped by requests for proposal.

Links

2Bobs episode 70, “The Only New Business Indicator That Matters”

Transcript

Blair Enns: David, we're back and we're talking about one of my favorite topics.

David C. Baker: What, you?

[laughter]

Blair: This is the story of my life. The story of my breakfast, 30 minutes on what Blair had for breakfast. My second favorite topic, RFPs, which stands for?

David: Request for proposal. I think you knew that. You were just wanting me to get some words in edge wise here. Is that the same thing as win without-- Is pitching the same as proposaling?

Blair: Is pitching the same as proposaling? No, but I do have a very strong point of view on RFPs and responding to RFPs. I was really keen when you said you wanted to talk about criteria for responding to RFPs because I'm looking forward to correcting your mistakes on this topic.

David: [laughs] I am not excited about being interviewed on any subject that you're excited to interview me on. This will be interesting. What made me want to talk about this is that, in an ideal world, if you could just design the world or if I could design the world or we could do it together, there would never be any RFPs. But in reality, there are certain segments of positioning, like if you're going to do government work, it's got to be really hard to get out of it, some higher-Ed stuff, some work related to gaming, and so on. If you have to violate, if you've got to kill somebody, what's the best way to do it? Thinking of Dexter, right? If you're going to kill somebody, how do you get away with it? [laughs]

Blair: Can we do a podcast without you referencing a serial killer? Probably not.

David: [laughs] Probably not.

Blair: In Blairtopia, there are no RFPs but in the real world, as a friend of mine says, "When you're in the ring you got to box." In the real world, RFPs come in over the transom. Between you and me, we're going to try to put together some dos and don'ts in terms of criteria for responding to RFPs. That's about it, right?

David: That's it. Right. If you've got to do it, what are the best ways to not waste your time?

Blair: Okay. You've got a list of things that need to be true. Where you think, if these things are true, it makes sense for you to respond or to consider responding to the RFP, and if they're not true, maybe you don't. We can talk about what happens if they're not true. Let's talk about a couple other things on the list of what needs to be true for it to make sense to respond to an RFP.

David: These are not all created equal. There are some in here that I would personally never violate, like the first one. There's others that are more like, ah, nice to have but you wouldn't necessarily say, "I'm just not going to respond to that RFP if this isn't true." The first one to me is non-negotiable. I want to hear what you have to say about this.

My none negotiable is this. If the incumbent is also in the pool of firms responding to the RFP, then simply refuse to do it 100% of the time because what I see is they are just bringing you in to keep the incumbent honest and your chances of actually winning are basically nil. Now, if you have a lot of account people that you hate and who have nothing to do, then you might want to have them waste their time and do this but I wouldn't. That would be first on the list for me.

Blair: I would add to that. I've seen some statistics on this. If the incumbent is involved, they win 60% of the time. It's not as high as maybe you might think.

David: No. I was thinking it would have been higher. Wow.

Blair: If the incumbent is involved and they are able to in some way affect the buying process, their winning rate is closer to 100%. I think in the other 40% of the time, what's happening is the incumbent is being invited as a courtesy to the incumbent. My estimation, and I don't have any data or proof on this, but my estimation is, the majority of the time, if the incumbent is involved, the idea is, we want to keep the incumbent, we just want to keep them on their toes or use these other firms to try to get a better price from the incumbent. The stats would say that's probably 60-ish% of the time.

Then the minority of the times when the incumbent is involved, it's just a politeness or a courtesy to them and they're never going to win. I wouldn't draw the hard-line. What I would do is find out if it's a competitive situation. Is the incumbent participating? If the client says, "Yes, the incumbent's involved," I would just speak directly and say, "Well, why are you doing this at all? Why don't you just keep working with them?" The client might say, "Well, we just want to see who else is out there." To that, I would respond with, "Well, I wouldn't feel very good about that if I were the incumbent. I'm not sure that that's the type of organization I'm looking to enter into a relationship with. If they're doing a good job and you just want to sleep around a little bit, to use a marriage metaphor."

Then, the other thing would be if the client says, "Well, no, we've decided we're not going to use them, we're just doing this as a courtesy to them." I would say, "I think the better courtesy would be you be honest with them and tell them it's time to part ways." I think this is an important piece of information that you want to get and once you have that information, you use it to find out as best you can, whether or not they're just going through the motions with you and the incumbent's going to get the business or the incumbent's not going to get it at all.

If you don't get a response that lands on one side of that line or the other, if the client's being wishy-washy, then I think I would do as you suggest and I would interpret that to mean, "Well, we're really going with the incumbent and we just really want you to drive the price down or give us some free ideas or maybe there's a really long shot that you'll blow us out of the water and we'll hire you instead." That's my take on the incumbent.

David: That's a little unexpected for me. I didn't expect it quite like that. It seems like a primary reason to invite the incumbent is that if we make a switch to a different agency, it's not going to happen immediately and we don't want them to screw up all the work they're doing just because they're mad because we didn't. That's at the root of this just treating them somewhat nicely as a courtesy.

When you ask the client that's asking you to respond to an RFP, do you think they're going to be honest with you about why they're even putting the account up for review? Do you think they're going to be honest with you about what they're not happy with?

Blair: I think I will get a sense from their answer of whether or not they are being honest with me and that's really what I'm looking for.

David: Right.

Blair: If I hear an answer, whether it's, "Yes, we really like the incumbent." Or, "We're not going to keep working with these guys," I really want to know who I'm dealing with here and if they're being forthright with me. If they're being forthright with me and not the incumbent, I would just say, "I appreciate you being forthright with me and honest about this. Don't you think it would be in everybody's best interest if you were as honest with the incumbent? I know if I were in their shoes, I would want to know if I was partially insane. I might still reserve the right to go in and defend the piece of business, but I would want to know." They might have very good reasons for not doing that but if I got the sense that the client was being honest with me about their intentions, that's a green light to me.

David: You talk about how the sale as the sample. You're almost sampling the firing of you three years from now. You can figure that this is how you are going to be dismissed at some point based on how they're dismissing, unless there's a change at the top. Anyway, we've kind beat that one to death but I think that one's really important. I like the way you frame this. It's not just is the incumbent but more detail around it too. That's interesting.

Another one for me is knowing how many people have been invited to the party here. Ideally, it's a part A and part B. Part A is how many and part B is, "Will they tell me who it is?" Of course, they're hardly ever going to do that. Let's say it's five or six firms that have been given this RFP and we don't mind telling you that. Then, of course, your next question which is never going to get answered is, "Well, can you tell me who those firms are?" They're going to say, "No."

Then you could follow up and say, "Well, okay, I understand the reason why you might not want to tell me but can you describe the kind of firms that are responding? What size are they? Do they have a stated focus?" So that you know if there's some sort of a pattern here and why you have been included. Is it because you're a local? Is it because you're a certain size and you can pull off the AOR status or is it because of your particular focus? Because, if it's financial services, maybe they want a financial services firm, maybe they absolutely do not want a financial services firm. You're just getting them talking about what your odds are. That's the second thing I want to know. Is that on your list as well?

Blair: I don't have a hard number and I know you're not digging in on that number. I do want to know, is this a competitive situation or are there firms involved? If the client says, "Yes", then I say, "Great, can you tell me who?" And they don't want to share, to me, that's another area where I'm looking for a little bit more disclosure from a future potential business partner. I would push them on that. It's a bit of a fun little game for me. It's easy for me to give this advice but I think that's how you should view it.

If they said, "Well, obviously we're not going to disclose that information." I would just say, "Why not?" Followed by this lengthy uncomfortable silence. "What is it you think I'm going to do?"

[laughter]

I do want to know if the number is high. If it's a 6, 8, or 12, then this is somebody who- it's so easy for me to say, somebody who doesn't know what they're doing. That's not necessarily the case but can you really run an effective search or vetting process if you're dealing with 6, 8, 12 firms? We've all heard stories of clients sending an RFP out to dozens of agencies, right? When you hear that, you know, it's like, "Yes." Now, there's a certain number, I think we would all have a number in our minds; as soon as you hear that number, it's like, "Yes, pass."

David: Yes, right. This is an aside, I guess. Maybe I should have said this early. What I find is that principals or head of business development or whatever, if they don't have policies or procedures about this, then they invent a new policy or procedure for every RFP that comes across their desk. It's so inefficient, and it has such an emotional toll on the firm. Everybody else in the firm who's doing all the darn work at your request, they need to know that you are, I think, being efficient and not wasting their time. They don't want you to make an emotional decision. Let's have some sort of criteria. We're going to make some mistakes, we're going to lose some opportunities, but overall, we have a policy for that. Whatever these things are on the listener's list, it's good to have thought through this in advance. I know that sort of an aside, but.

Blair: Yes. I know. I agree with that completely. I think as the agency new business person, in some agencies, that's the principal, in that role, it's not only your job to bring good clients in, it's your job to keep bad clients out. We talk about the gatekeeper on the client-side, you are the agency gatekeeper. If a bad client comes in, you, the person on the front line, you're responsible. If a bad client comes in, or a bad prospective client comes in and wastes the resources of the firm, you are responsible. You should see yourself as having this equal responsibility to not only bring in good fit clients but keep the bad ones out.

David: Right.

Blair: All right. What's next on your list?

David: Next is a super obvious one. We've talked about this in so much detail over the years, but it has to be on the list. That's do you have direct access to the decision-maker? This is not necessarily the person who is going to be the key contact if everything works out and you get the job, or the project, or the relationship, or the AOR, but it does mean that you have direct access to that person that's not filtered through somebody else. Somebody else is not saying, "Yes. I'll check on that for you." Or if you come right out and ask somebody, which is never a good idea, are you the decision-maker? Nobody's going to say, "Oh, shoot, I wish I was, but I'm actually a leader. I'm not the decision-maker--

Blair: But I'm very important in other matters, and I will be someday.

David: I learned this from you. I'm pretty sure where you asked something about, "How is this decision made? What is your role on this?" The payoff question is, "Will you need to inform anybody else?" Which really means, "Will you have to okay this decision?" But we say it nicely, "Will you have to inform anybody else about this", just to un-earth who the decision-maker is. This is really obvious, but it's got to be on the list, right?

Blair: For sure it has to be. In one of the episodes that aired most recently, the number one indicator of business development success, it was, basically, did you affect the buying process? Of the many different ways to affect the buying process, one of the most meaningful ones is getting access to decision-makers when you are told access is not allowed.

I sometimes say, "I hate RFPs". I sometimes say, "I love RFPs". I think they're a puzzle. When I'm in the right frame of mind, and an RFP comes in for me or for-- I'm talking to a client and agency principal about responding to an RFP, I rub my hands together and glee and I think, "Okay, it's a puzzle and we're going to solve this puzzle. We're going to push back. We're going to say, "No." We're going to create obstacles. We're going to ask for concessions. We're going to do all of these things."

That access to decision-makers, that's almost a standard one. It's like one of the concessions you are almost always going to ask for, is to get access to the senior decision-makers beyond the gatekeeper or the middle manager who's driving the RFP process.

David: Right, absolutely.

Blair: What's next on your list?

David: Can you tell us Mr. or Mrs. RFPeer- Can you tell us-- RFPeer, that has an interesting ring to it.

Blair: I've been RFPeed on. [laughs]

David: Can you tell us how the decision will be made? What's the criteria? Again, you're probably going to get some fuzzy answers. I don't care as much about the actual answer as how long they stammer or how specific they are, or whether they say they need to get back to you. It's just a really obvious question. You know, for these large, huge government contracts, the criteria is very public. If the deciders don't follow that criteria, then somebody's going to get sued in court. We're not talking about that necessarily, but the bigger the thing, the more clear the criteria should be. I just want to have a discussion about that with the person.

Blair: Yes. If there's a criteria, can I see it? I have a friend of mine who was telling me a story recently. He is an entrepreneur but he said, the only job he ever applied for that he didn't get; he came in second. This is back when he was a young man. He called the hiring manager afterwards and said, "Can I have a little debrief on why I didn't get the job?" He was told, "Yes, sure." He said, "What was it about me versus the other candidate?" He said, the other candidate said, ''Are there a list of questions that you're going to be asking me during the interview?" I said, "Yes, there are." She said, "Can I have them in advance?" He said, "Sure."

[laughter]

Can you imagine that? He said, "No, it never occurred to me that anybody would ask for them." She asked and I thought, "Good for you for asking. I'm going to give you the questions." Of course, she aced the answers.

Now, I think that's a ridiculous way to hire an individual. You will find that most people who have taken the time to create a scoring matrix of some kind are willing to share it with you.

David: Yes. If I were your friend's friend, this is what I would tell myself, to all of my friends. I would say, "I just want you, folks, to know that I came in second, okay? She came in next to last, so just keep that in mind."

[laughter]

Blair: Yes, you'd spin it.

Blair: I need to tell a story about this, the idea of the decision-making criteria. I need to tell you a story and I can't name names here. I was working with a firm recently that you have also worked with. They told me a story. They were in a pitch, a competitive situation. They had a pretty good sense it was them in one other firm.

They thought they had the firm identified then the morning before their pitch, one of the partners' wives said, "Hey, I'm friends with a bunch of people at this other agency on social media, and they're all over social media talking about pitch day." "I think maybe they're the firm you're pitching against." This firm I was working with looked at all the social media activity went, "I think you're right, it's not this other firm." "It's quite a different firm." They had a day before they went in to pitch. They changed their strategy completely. There was a 100-point scoring system and they beat this firm by one point.

David: The lesson is quit sharing your RFP activity.

Blair: Yes. "Hey, we're getting ready for a pitch on social media." You are transmitting all of this information to your competitors.

David: Now, I've got to ask you about the next one because even though we've had a whole episode on this, and you touched on it just a minute ago, please don't leave off on your list that your likelihood of winning this RFP is directly related to-- and then Blair fill in the blank?

Blair: Well, it's directly related to your ability to affect the buying process. Here's how I advocate responding to an RFP, and then we should back up and talk about well, why not respond to RFPs because we haven't even addressed that. What's the big deal? There are a lot of firms and a lot of individuals at firms who say, "Man, I'm happy to respond to RFPs all day long." My responses "Yes, you're young, just wait."

[laughter]

I think when an RFP comes in over the transom, you pick up the phone and call, even if it says, "No phone calls", and you say, "Hey, thanks for thinking of us. It's really interesting project." Say a couple of positive things, "Really an interesting project", or, "We appreciate you thinking of us. We don't typically respond to RFPs." Then you stop and say nothing.

Raise the objection and say, "We don't typically respond to our RFPs," then wait for the lengthy pause. In the lengthy pause, you're going to get all kinds of information on how meaningfully different you are. Whatever the client says next is going to tip their hand on whether or not you are seen to be meaningfully different, and therefore, you have some sort of competitive advantage in this situation.

David: Based on what you hear, you might go ahead and respond at that point, if you have a sufficient inside track?

Blair: The client might say, "Well, I had no idea then I guess I'll be going on my merry way." That's a sign that you have no power. You're not seen as meaningfully different. Probably somebody else has the inside track, but it doesn't mean you should hang up the phone right then, you could say, "Well, wait a minute, from time to time we make exceptions, before I say no, let me ask you a few questions." You're creating this dynamic or this objection and you're putting it on the table and then the client's turning around and walking away because of the objection. You're not removing the objection, you're saying, "Hey, let's just have a conversation," and maybe from time to time I remove these obstacles and maybe it makes sense to remove this obstacle.

That's the first thing I would advocate is to say, "We don't typically respond to RFPs." Now, there are some firms that we've worked with who like to go further and say, "It's our policy that we don't respond to RFPs." I don't think that makes sense, I think in this case it's more of a preference even though there are times when, as you point out, it really makes sense to be using policy even if you're inventing it on the spot. Just say, "We don't typically respond to RFPs," pause and then wait to hear what happens next because you'll get all kinds of information. If they start to walk away, you can say, "Well hold on, let me ask you a few questions."

Then the first question in follow up would be, "Why us?" You're getting more information about whether or not they see you as meaningfully different, it might be, "Oh, we just canvassed to people in the marketing department and asked for agencies that they knew and your name was on the list." Or, "We Googled you." Or it might be a more desirable answer and that is, "I saw your speech, I've been subscribing to your blog or your podcast, I've read your book," whatever, "I've been following you for years." That's a sign that you are in the driver's seat, you have a position of advantage and you're probably likely to win. Then as you go further and further into the process or the arc of the sale, you're continuing to push back and gauge whether or not you're seen as meaningfully different.

Those are the two pieces of advice I would offer is, I would say start with, "We don't typically respond to RFPs," pause and then if the conversation is continuing, ask, "Why us?" And find out, are you like one in a sea of many with no power in the relationship or do you have a leverage point?

David: Well, I have one more but I have a feeling I'm probably leaving some off because when I talk with firms, they usually have a little checklist just to take some of the emotion out of it. But in my mind, and this is another one of those somewhat silly ones, because even if the firm issuing the RFP promises to do this, they may actually not do it. The question I want to ask is, "All right, if we step out our normal policy to not respond to RFPs, this one sounds like it's interesting enough and we feel like it's such a great fit, we probably should do it. But if we do this and we are not awarded the work, which of you will be willing to spend 15 minutes with us on the phone to give us some feedback and why we didn't win it?"

I love the question because it demonstrates some sort of a commitment from them. Why do these firms issue RFPs to 12 agencies? Is it because, like you say, they can because there's very little cost associated with them doing that? But here we're setting up some sort of at least promise cost that they're not only going to have to spend a little bit of time with us, but they're actually going to have to have a transparent conversation; what could be a difficult conversation, which is a sign of a great client.

I like to add this in here, "Would you be willing to commit a 15-minute conversation to us just to give us some feedback on how the process went, if we aren't awarded the work? We're pretty sure if we participate we are going to be awarded the work but if we aren't--" No, I'm just kidding you wouldn't necessarily say that. [laughs]

Anyway, maybe I've left some things off but that's the criteria I'd work through.

Blair: Now let's back up to the point, I as the interviewer in this case should have addressed right at the top. Why the dislike of RFPs, why are you and I so jaded about them?

David: Well, they waste a whole lot of time. You're automatically set in some a competitive situation where it's much harder to do value pricing with this stuff. If you're responding to RFPs, to me, it means you're not doing the other things that you should be doing. People that are doing a great job of implementing a marketing plan on top of a brilliant positioning, simply don't respond to RFPs all that much. If you're doing it--

If you're breaking into cars and stealing things all the time, you probably don't have a great job. If you're responding to RFPs all the time, you probably don't have a great positioning, unless your positioning is in one of those verticals that just simply will not dispense with RFPs like government work. I have a lot of clients in Canada as do you, Australia as well, the UK where there's a much larger percentage of work that's tied to government strings, in which case, RFPs there are more regular part of the process, we have to acknowledge that.

Blair: Yes, and I get asked that a lot. Like in the last few workshops I've done, there's always somebody who comes up and says, "Okay, we work with government," and I just think, "Oh, you poor sucker." The reality is there's some markets where the big work is government work. Their question is, "Can this stuff", this idea of winning without pitching, "does it work?" I always say, "The principles still apply, it's just harder to apply them." Do you respond to RFPs in your consultant practice?

David: Never. I get really upset with myself if I discover that I missed a signal that it was an RFP. I got a request like that from Emory University, a couple of years ago and I discovered after I put some work into it that it was going to three consultants. As soon as I found out, I just very kindly just bowed out of the whole process and explained to them why. No, I never do.

Blair: Yes. I tend to bow out a little less kindly. I remember a situation, you and I have talked about this before, I received I think it was like a one sentence email from an agency principal with an RFP attached. It was, "Hi Blair, we're looking for a consultant. Please respond to the questions in the attached document. Thank you." I replied, "I think you have me confused with somebody else, there's all these articles on my website about why you don't respond to RFPs." He responded and said, "No, we know who you are. Thanks anyway." I thought, "Oh, I know exactly what's going on. He's already decided the consultant he wants to hire and I'm the third bid." I was right, and that consultant was you.

David: Seriously?

Blair: Yes.

David: Did I get the work?

Blair: He had already decided he was going to hire you but before he hired you, he sent out an RFP to me and possibly other consultants probably looking for a lower price with which to beat you up.

David: Well, that wouldn't have worked but I do credit the guy for being smart and deciding out of the gate to hire me that's a sign of--

[laughter]

One of the things I wanted to talk about is that there's so much emotion in this stuff, particularly if you are looking around and you see fannies in the seats that aren't doing anything. You do rightfully feel some, "Okay, my normal procedure is not to respond but if I don't get some work for these people, then they're just going to be sitting there." I completely understand that.

Just like when you look around one day and you realize how much time and money you're spending responding to award shows, the solution there is to create a project called Award Shows and then spend that fictional money down in time as the year goes. I think the same thing applies to RFPs. At the beginning of the year, be very intentional, if you're going to do RFPs, say, "All right, we're going to spend up to 20,000," whatever it is, "worth of time doing this but since we've committed to not spend more than this", and this would be a conversation you could have with a client, "should we waste some of our budget on this?" Does it seem worth it to you? Just be a lot more intentional about the decisions.

You and I aren't saying you never respond, we're saying just be thoughtful about it, think about it carefully and don't get trapped in some emotional spiral.

Blair: I agree with that. I think my four priorities are: number one, win without pitching wherever possible. Number two, if you're not able to win without pitching, win the business before it comes to a competitive situation, then try to derail that pitch. Number three, if you can't derail that pitch, try to gain the inside track, so some of these push backs and concessions. First, I'm trying to derail and if I can't derail, I'm trying to see if I already have or if I can gain some advantage. If I feel like I have or I can gain an advantage, then I'll proceed, I'll participate in the RFP on adjusted circumstances where I've bent the rules in my favor.

Then the fourth priority is, if I can't get an advantage and increase my odds of winning, I walk away. Now that fourth priority, that's me the advisor giving advice, I recognize that as the agency principal listening, you've got these people, you've got to feed, the times are lean, et cetera. You might not walk away, you might decide to pitch anyways, even though your odds of winning are about one over two N, with N being the number of firms under consideration. That's fine that's your prerogative.

I think, if you build part of your new business machine, it's like throwing all these resources at replying to RFPs volume, you're missing a really big trick. That big trick is, very early on push back, create some obstacles and see if you have some competitive advantage and then play the games, enter those competitions where you have some competitive advantage because as we've talked about in a previous episode, if you can affect the buying process even a little bit, your odds of winning go from about one over two N to greater than 0.5N. You're more likely to win than you are to lose. If you're just politely, compliantly responding to all these RFPs without ever pushing back, you're never gauging how much power you really do have.

David: Yes. You're not really learning from each process that takes place that's a good point.

Blair: In summary, it's a puzzle, embrace it, try to get the rules changed in your favor. You should have a criteria list, whether it's the items that we've talked about here or you've got other items that you want to put on your list, you should have this checklist; the things that you measure the opportunity or the RFP against.

This is a great topic, David, thanks for bringing it up.

David: Yes. Thanks Blair.