The XYZs of RFPs

In last month’s column, “The ABCs of RFPs,”  we talked about the myths and realities of requests for proposals (RFPs), which seem to be on the rise. We told the story of a firm that lost a major potential engagement, even though after the firm’s presentation the prospect had assured the firm’s partners they would be awarded the business after the first of the year.

Unfortunately, a competitor “out-discovered” them and, in effect, rewrote the RFP, at least in the prospect’s mind, to reflect what he thought it should be. Instead of celebrating on New Year’s Eve with champagne, the losing firm’s partners were crying in their beer. (Well, we don’t really know that for sure because they weren’t celebrating or crying with us.)

Here’s what happened next.

We recommended that the partners make a personal visit to the prospect to learn why they lost out. Although not their standard operating procedure, they made the trip about three weeks after losing the RFP. What did they learn?

1. A new lesson in how personal visits can pay off as relationship-builders.

The prospect said: “We haven’t seen or heard from the firm we gave the work to in three weeks, since we awarded the contract, and you’re here, even though you lost!”

The prospect was no doubt thinking: “This is impressive, but they’re not going to talk me out of my decision.”

2. How to play for the “next call.”  Before their visit, we reminded our clients that coaches often argue with officials over a close decision that goes against them. They’re not necessarily expecting to change an official’s mind on a specific call. But they are expecting to gain an advantage for the next call that might go either way.

Similarly, our clients were making the trip not to argue for the business they had already lost but to gain an advantage for getting business in the future. They were going to ask the right questions in the right way to discover the issue their competitor used to revise the RFP to his advantage.

3. Why they lost the RFP.  Although the prospects did want to solve the problem described in the RFP (an international tax matter), deep down they were much more worried about how large the problem might turn out to be. They had almost no idea, and the winning bidder discovered that worry and used it to his advantage.

4. What their competitor did.

• He proposed a much less expensive audit of the problem. It was about 80 percent less as expensive, in fact: $60,000 vs. $300,000.

• He revealed his expertise by showing the prospects that as the seller he knew more about the implications of solving the problem than they did as the buyers. (It’s important to understand that buyers writing up RFPs usually don’t know all of the challenges or beneficial outcomes.)

• He delivered very real value during the sales process by clarifying their concerns for them before he was ever paid a penny.

• He positioned himself and his firm to get the larger job for which the original RFP was written. After performing the audit, he would know the issues inside and out and would be the likely choice to take on the larger, more lucrative job of resolving the problem itself.

5. What a slap-in-the-face lesson about effective sales discovery feels like.

Our clients returned from their visit re-energized and continued to think of the company as a viable prospect. But they did more than think about it. At our suggestion, and with our assistance, they successfully stayed “top of mind” with the prospect over the next six months.

Many companies and firms understand the value of keeping their name in front of prospects and clients through regular communication. But too often it’s the “just checking in to see if there’s anything we can do” variety. That kind of communication does remind the prospect you’re alive and kicking. But after one or two such reminders, it begins to rankle. We recommend that a seller deliver value during the process of staying top of mind. (There are a number of ways to do this. Give us a call to learn which ones might work for your company.)

So, what happened?  Well, the competitor seller, though clearly good at performing discovery, apparently wasn’t so good at doing the work. After some frustration, when the prospect’s executives finally got a handle on the size of the problem, they just called our client instead of putting out a second RFP. The end result was that our clients got the assignment they were originally rejected for. Plus, over the next few years, they earned literally millions of dollars in fees from this company.

Understandably, companies can be too embarrassed, discouraged, or even angry to engage a prospect after being told “No!” so emphatically. But we know from experience (our own and that of clients we’ve counseled) that lost prospects can reveal more juicy secrets about buying motives than your best customers ever can.

So, right now, if you’re…

1. Facing an RFP that has potential to be “re-written” in your favor or

2. Trying to stay top of mind with prospects and clients without being a pest,

please give us a call to talk about how we might be able to help.

Finally, to read or re-read last month’s column, just click “The ABCs of RFPs.” It tells the first part of the story and, we believe, delivers value in the process.