In the world of sales, it’s easy to get caught up in the possibilities of an unsolicited RFP. But, if you find yourself dealing with procurement, you might want to save your energy.Some years ago, out of the blue, I was invited to participate in an RFP for a $13 billion apparel company. If you're unfamiliar, an RFP is a Request for Proposal by a company looking to hire someone to complete an important task for them. It was a big deal because my company wasn’t ranked #1 in the market nor were we a household name. This would be a big break for us. And, if they accepted the proposal, I would make my quota for the entire year.
Excited, I knew I had to make some compelling arguments for them to pay attention. And, to do that, I needed to understand their needs. I began by getting on the phone with the person who controlled the budget. We had some pretty good conversations at first, but before long, that person stopped talking to me. Suddenly, my access to the company was restricted to the procurement department.
Dealing with procurement is never easy. In this case, procurement was not very forthcoming and did not answer my questions. In fact, all I learned from them was that the RFP was due in a week. With such short notice, I scrambled to get my team firing on all cylinders. We spent a significant amount of time and resources putting together an RFP we were proud of. And, because I knew I had to come in at a low price to have a chance, I managed to come up with a way to offer a quote lower than list price.
After a few weeks, the procurement department reached out to say they liked what I’d submitted, but that they needed me to lower my price even more. It wasn’t what I wanted to do, but I figured even with a lower price, I could make my quota for the year. So, I lowered it.
After a couple more weeks, the company got back to me to let me know they were going with their incumbent. It was disappointing. The worst part was, later I found out that I had no chance of winning that deal. My sole purpose for being asked to submit was so the company could leverage my lower price against the incumbent’s, essentially making them lower their price.
It was sneaky, and I should have known better. There were red flags all over the place.
Sales forces lose extraordinary amounts of energy, time, and overall productivity dealing with this exact scenario every quarter. At Holden Advisors, we call being in this situation The Rabbit. As The Rabbit, procurement has selected you to run around in the hopes the preferred vendor will chase you to the lowest price possible.
Before wasting your time with an RFP you can’t win, look for these red flags. If you see more than one, consider focusing your effort elsewhere.
- The company has no prior experience with you or your firm. It’s not totally unbelievable that a company could be interested in you solely based on what they’ve heard anecdotally. But, more often than not, a company comes to you because there is a connection.
- The RFP deadline is quick. Any company that wants an honest chance to review your proposal will give you the appropriate time to deliver it.
- The company doesn’t want to talk. Meaningful conversations with decision makers are paramount to demonstrating value. If a company is really interested in you, they will be happy to have those conversations.
- You’re told procurement will make the final decision. Procurement will try to control the process, but they are rarely the final decision maker. More often than not, business leaders are. If they won’t allow you access to business leaders, it’s time to walk away.
- The buyer has a well-established incumbent. An established incumbent doesn’t mean you can’t win, but it is a red flag. Are you supplying something that is recognized by the buyers as truly different? If you don’t know and can’t get the answer to how the buyers perceive your offering, it’s time to walk away.
Curious about how to not be The Rabbit? Here are some tips!