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There’s a groan of grief that seems to echothrough many organizations’ Business Devel-opment Departments when a Request forProposal (RFP) arrives. Such requests are

sometimes preceded by what is called a RFI—Requestfor Information—often just as time demanding as aRFP and a process that usually determines whomoves to the next stage of receiving an RFP.

Suppliers tend to frown on RFIs and RFPs for tworeasons. First, the time they require can be signifi-cant. Second, current selling prices and margins areall but guaranteed to be reduced. However, the suc-cessful supplier who wins the award may capturesignificant, increased amounts of “predictable work”that was previously unavailable—such as beingselected as one of two or three (or more) suppliers.

Yet, smart senior management of customersincreasingly recognizes that certain suppliers canrepresent a “strategic resource.” From that given,smart customer organizations are working to con-solidate their suppliers and improve the “value percost” they receive from their preferred suppliers.

Evidence is broad and deep that: kMost buyer organizations do not receive the fullvalue available from their suppliers, andkSuppliers tend to fail to provide their target cus-tomers with “maximum perceived customervalue”—including “useful information.”

In other words, don’t expect RFIs or RFPs to goaway. The economic benefits are too meaningful,and measurable to a purposeful, buyer organization.

From this background, I fail to understand why

supplier organizations don’t see such requests asanother opportunity to differentiate themselves—toseparate themselves from their competition, partic-ularly to a desired, target account. If the issue is thetime required to respond to a RFP, then maybe asupplier needs to rethink and reorganize how itsresources are positioned in order to properly andsuccessfully respond.

There are numerous issues to evaluate, andengage in order to determine which RFPs or RFIsrequire a response. In the process of outlining whichopportunities to select to respond to, I would likealso to profile how you might consider responding inorder to elevate your organization’s probability ofbecoming a selected supplier—or at least making itto the next round of competitive review. You can beassured that failure to “professionally respond” toeither an RFI or an RFP moves your organization tothe back burner of potential suppliers to the buyerorganization—possibly for years to come.

Issues to Review and Engage Is there a history with the account? Why did youreceive the RFI or RFP? If your organization has ahistory, and particularly a recent and successful his-tory with the account, then you probably have an“inside position” to receive an award of some nature.This history doesn’t guarantee you to receive anaward, but it does give you a track record and suc-cessful history that a competitor must overcome inorder to “move you out of position.” Customers tendto dislike changing suppliers, particularly suppliers

The RFI/RFP ProcessOpportunities for Those Who Are Prepared

You can be assured that failure to “professionallyrespond” to either an RFI or an RFP moves your orga-nization to the back burner of potential suppliers to thebuyer organization—possibly for years to come.

BY SID CHADWICK

BUSINESS DEVELOPMENT

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who have a strong, successful track record. Note: Ifyou want to improve your probability of winning afuture RFP, conduct Periodic Business Reviews withthe target account’s senior management. There arealways issues that defy quantitative analysis, and thekey value in that process is “trust between supplierand buyer managements.”

Do you have a successful history with otheraccounts like this one? Successful supplier organi-zations tend to specialize in customer markets.Success tends to build future success. What youlearn and accomplish in one account tends to berecognized and valued in a buyer organizationthat’s similarly positioned, but whom you are not

yet supplying. Recognition of these issues can pro-vide you a “competitive edge” that can separate youfrom a slightly lower priced competitor if you explainthese issues in terms of “economic buyer benefits” inyour response. Even if you don’t have a history withthis account but the account fits your desired targetaccount profile, then a top-notch response can pos-sibly position you as an “alternate” for when a cur-rent supplier is replaced.

Does this account “fit” the profile of customers youare working to supply? Every supplier organizationshould have a written profile of whom they areworking to pursue and supply, and whom they areworking to avoid. If this RFP has lots of volume, but

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BUSINESS DEVELOPMENT

does not “fit” the profile of whom you are workingto supply, you may want to rethink many relatedissues that determine whether it is in your interestto respond.

“Potential revenue volume” should not be thecritical factor for investing your precious resourcesinto a demanding RFI/RFP process.

Is there “negative (even indirect) fallout” if youdon’t respond to the RFI or RFP? An RFI or RFP cancome to you as a result of a professional referral.In other words, why did you receive the RFI/RFP?There are often extenuating circumstances that youdon’t know unless you inquire. Make the effort tounderstand, “Why did the customer invite us intotheir RFI/RFP process?”

The answer can be significant, andas innocent and unexpected as, “Ourpeople have attended your educationprograms, which none of our currentsuppliers offer, and we felt an obliga-tion to find a way to send you someof our business.”

Can you offer products and servicesand programs that can elevate this cus-tomer’s performance even if they didn’task for them in their RFI or RFP? Manybut not all RFI/RFPs ask, “What canyou provide us—that is economicallyvaluable—that we didn’t ask for? Fromsoftware education and training towebsite design to lean manufacturingtraining to unusual products andmarket information, your customer isinterested in developing suppliers whocan elevate their economic perfor-mance. Your responsibility is to deter-

mine if you can be meaningful to this customer overtime; and, if so, to explain those issues in com-pelling, business performance language.

Can you be important to this customer? Can youdevelop mutual importance? Mutual importance iscritical, but too few suppliers include the issue intheir pursuit of new business. Everyone might, onfirst blush, want to become a supplier to GeneralMotors, but not everyone can be important to GM.In other words, you want to commit resources inpursuit of RFI/RFPs that you can sustain and thatdon’t find you being replaced every year or two.

Have you evaluated this target account’s perfor-mance objectives, priorities, management team,

and ability to sustain itself in its competitivemarket? You don’t need to pursue customers whoare merger candidates. And critically speaking, youprobably don’t need to pursue customers who arenot leaders in their field.

Sustainable customer revenues are critical, andunderstanding the “business side” of a potentialaccount that’s sent you an RFI/RFP is becomingpart of what your business development processshould be about—in terms of whom to pursue, andwhom not to pursue.

Issues and Options to ConsidersWhat separates you from your competition? Can youdescribe your differentiation in terms that aremeaningful to this target RFP? If you can’t, thenmaybe you need to either ask other questions oravoid this investment of resources. All RFI/RFPsshould not be pursued.

What meaningful value can you provide that the RFIor RFP didn’t ask for? Don’t overlook your resources.I observed one fairly pedestrian envelope manu-facturer win major awards because they hadunusual internal “lean manufacturing” facilitatorskills that certain financial institutions wantedbadly. With that background, the buyers worked tobring this supplier in.

How well is your response information organized, andpresented? What your pages and RFP looks like isimportant. If time allows, make the investment tomake your pages easy to read and your documentwell organized. Also, if there are five members on theevaluation team, send six copies—not one!

When you develop this information for one RFI orRFP, can you use it again for subsequent RFIs andRFPs? Much of the complaining about RFI/RFPs isthe time investments they require. Take a step backand begin preparing this type of information inadvance. Not only should the quality of informa-tion prepared improve, but also your ability to suc-cessfully engage the whole process should improve.

Does responding to this RFI or RFP allow you toimprove your positioning to become a supplier in thenext three to five years? If you are not a current sup-plier, responding to an RFI/RFP can still be the“stepping stone” for moving-up in the potential lineof suppliers. It is in your best interests to evaluatethe cost/reward equation. Is this an account youwould want to be “next in line to supply” in threeto five years?

Supplier organizations should viewRFIs and RFPs as an opportunity todifferentiate themselves—to separatethemselves from their competition,particularly to a desired, target account.If the issue is the time required torespond to a RFP, then maybe a supplierneeds to rethink and reorganize howtheir resources are positioned in orderto properly and successfully respond.

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What’s your history of performance improvement?What are the intellectual content, credentials, and trackrecord of your management team? Buyer organizationsprize suppliers with great credentials, and intellec-tual content worth sharing. If you have a searing his-tory of performance improvement, you need to tellthe story. Heading? “Our most recent 50 performanceimprovement initiatives, and what they mean for ourcustomers.”

Understanding Goes Beyond PriceYou will notice I committed little time to yourbecoming the “low priced supplier.” Low prices cer-tainly count, but overall strategic contributions to thecustomer’s business performance count more.

We have moved into a world in which suppliersand buyers are developing informal partnershipsbased on “mutual importance.” Long term relation-ships are prized; they tend to allow for reliability,trust, and continuous improvement.

Each supplier should give serious consideration toasking, “To whom are you important, and why? Towhom do you want to be important, and why? Andwith whom do you have a track record that says youshould avoid this type customer?

Given these types of qualitative and discretionaryissues, the above outline should be helpful for deter-mining not only whose RFI/RFPs you shouldrespond to but also how to win a higher percentage!

It’s the customer who determines who stays inbusiness, and who doesn’t. So a supplier’s central roleshould include improving the customer’s economicperformance. And smart customers are looking forsuppliers who can best contribute to the customer’slong term performance. That understanding goes farbeyond low price and requires us to understand thecustomer’s business priorities, sources of pain, and per-formance priorities.

What is a Periodic Business Review? On page 23, the

writer mentions the need to conduct Periodic Business

Reviews that allow a supplier and its customer to system-

atically review and renew their respective roles of what’s

happening between them, as well as the macro and micro

perspectives of their respective industry environments. The

primary objective is to improve performance and value of

both organizations to each other through improved under-

standings. For further information about Periodic Business

Reviews, refer to the Customer Service Handbook produced

recently by IPA.

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