How to Manage RFPs and Proposal Development Successfully Before They Manage You!
August 20th, 2009 Posted in Newsletter
Welcome to the August 15, 2009 edition of BPI News!
In this issue we RFPs and Proposal Development.
As always, I look forward to your comments and thoughts.
If you would like to have this newsletter delivered to your mailbox via email, please send an email to newsletter@bpistrategy.com and include your name, company, phone number and email address. We will add you to our mailing list.
Check our website ( http://www.bpistrategy.com/news.html) for information on our next free teleseminar - “How to Sell to the Government”, on August 28th, noon to 2 PM EDT.
Walt
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How to Manage RFPs and Proposal Development Successfully Before They Manage You!
by Paul DiModica and Walter Wise
As part of government Source Selection Teams years ago, I sat through many proposal reviews submitted to us by both small and large businesses. Sitting in the room with the technical evaluators, cost evaluators, business evaluators and program and project managers, I was able to observe the strategic, tactical, analytical and emotional selection process used to procure goods and services and to award multimillion dollar, multi-year contracts. It was interesting how the team inspected each proposal, created a short list and made subjective observations about each vendor, their offering and its value contribution to the government. Since it is estimated that 24% of all RFP’s are NEVER implemented even when a short list is compiled, many RFP’s are actually a Request for Information (RFI) in disguise and it is important to manage your time allocation based on logic not emotion.
Often senior management and sales teams assume that an RFP is a big deal and they must submit a response. This approach is called the “rainbow affect” and makes many companies chase RFPs they should otherwise ignore. Yet time and time again, companies chase the RFP rainbow, spending hundreds (or even thousands) of man-hours and dollars trying to win the impossible.
These experiences, coupled with working with clients on capture management and proposal development have given the BPI Strategy Group and the Value Forward Network insight into some best practices you may be interested in considering if you want to increase your proposal success.
The following best practices are recommended for companies that have annual revenues less than $100 million per year or where the sales team is required to put together the RFP response themselves. Often companies with annual revenues greater than $100 million have a dedicated proposal department to manage the submittals. These apply whether you are working on public or private sector proposals.
5 Best Practices for Proposal Success
1. Deals valued over $1,000,000 in the 1st year
Bid ONLY if you have at least 3 of the following variables in your favor:
· You have worked with the client before and know the “hot buttons”
· You know the competition
· You have “done your homework” before the RFP was released
· The work location is within a 2-hour plane ride or less from your office
· You know for a fact you will be placed on the short list by submitting
· You have won this type of business before and have the qualifications to prove it
· You can comply fully with all requirements
· You helped write the RFP
2. Deals valued under $1,000,000 in the 1st year
Bid ONLY if you have at least 3 of the following variables in your favor:
· You know the customer
· The work location is within a 4-hour car ride or less from your office
· You know for a fact you will be placed on the short list by submitting
· You have won this type of business before and have the qualifications to prove it
· You have some knowledge of the competitors
· You can comply fully with all requirements
· You helped write the RFP
3. Packaging
When packaging your proposal, make sure its presentation matches your value. Many companies work on their response up to the last day, then overnight it to the contract office to beat the deadline. Focus on the proposal structure (color, dividers, PDFs, etc.) as well as the content. When sitting in on RFP reviews, I noticed that the best looking physical presentations always seem to get more attention. Remember, proposals are invisible salespeople.
4. The Offer
When writing the financial section in your response, consider giving them 3 price options, not one . . . even when they tell you to give them only one. Why? Because once you submit a proposal — it’s the “don’t call us, we’ll call you” syndrome and you may not have the opportunity to resubmit alternatives they may not have considered or that your competitors have suggested. By supplying three options, you position your response differently than others who only offer one.
5. Over-Produce
When creating your proposal - the key to success is to over-produce, yet companies barely get the finished document out the door. To increase your closing ratio, consider the following: build a better presentation, supply audio CD, DVD, or MP3 file testimonials of your clients, add a 5 minute CD from your President explaining why the prospect should buy from you, create a website specifically for your response to provide additional information, provide the URL in your proposal and track it to see when it was visited. Give the buyer more than they asked for – added value up front.
One business metric we see that seems constant is that companies that respond to too many RFPs, normally do so because the rest of their lead generation programs are weak, and they try to compensate for their lack of revenue growth and lead generation by incorrectly assessing their potential proposal success and respond to everything.
To close more proposals . . . respond less, qualify more and over-produce when you submit!
So, stop saying how great you are and start proving it before the sales cycle begins . . . and you will sell a lot more.
Walter Wise
President
BPI Strategy Group
617-532-0918
A great salesperson inspires the buyer to see the benefits as their own.” –Anonymous
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