Suggested guidelines for responding to RFPs

A former client sent me a request for proposals (RFP) the other day. I don’t know about you, but I cringe when I receive RFPs. I rarely win RFPs, for the following reasons:

- Generally firms send out RFPs even if they already have a preferred candidate in mind. They do so to appear fair and efficient to procurement or oversight bodies.

- Often the preferred candidate works with the firm to design the RFP, which makes my odds even lower (unless I am that preferred candidate).

- Sometimes firms issue an RFP when they have no intention of moving forward, but just want to collect some information.

- If I don’t have an established relationship with the decision-makers, my odds of winning are low — even lower than one divided by the number of vendors who respond.

- People generally hire me sole source, because they see my work or hear about me from trusted colleagues. So it is not worth the time to complete RFPs.

But now here is an RFP from a former client. Of course, that raises a red flag right there. My primary relationship with this client was with executives who have left the organization. So once again, I have some history, but with a “former regime.” So my odds are not exactly high.

I decided to respond, but I realize I’m a long, long, long way away from winning.

Generally here is when you should respond to an RFP:

1. If you are a trusted advisor to the firm and they need to create an RFP (maybe with your help) to show they are being fair.

2. If you have no relationship with the firm, but want to use the RFP to develop a relationship. You won’t win the job, but can use the RFP to nurture the relationship and develop a foundation for later work.

3. You have strong relationships with the decision-makers.

4. You have a massive advantage compared to other competitors that raises your odds of winning — even if you don’t have strong relationships. An example might be a proprietary technology, or an unbeatable track record of specific business results.

If any of those criteria are not met, it is not worth the effort.

In my current case, I’m responding because I know the history of the organization better than anyone else thanks to my work there (#4), and because I want to rekindle the relationship with the new team (#2). I also have some relationships with current members (#3), but perhaps not strong enough to win.

Finally, I’m basing the above criteria on history. I’ve lost too many RFPs — in fact all of them — where the above criteria were not in place. In those cases, I was basically a file folder that the firm issuing the RFP needed to have in order to feel like they were thorough.

What’s your experience? Similar or different?

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  • http://www.tpdevelopment.com.au ricktu

    My experience with them is about the same as yours. Like you I don’t even bother with them unless I have an established relationship with the company in question. I’m flat out working for people who have already decided they want my services before they contacted me so I’m not prepared to spend 3 or 4 hours preparing a proposal for a job that 75% of the time has already been allocated.

  • http://www.sitepoint.com Mark Harbottle

    Great advice Andrew.

  • shadowbox

    I’ve learnt the hard way to not play the RFP game. I’ve never won any RFPs I have completed in the past, mainly because the clients in question were simply looking for the cheapest quote (I’m not cheap) or as Andrew suggests, already had a preferred vendor and were just following policy to get a range of quotes.

    I find the whole RFP process quite infuriating. It bypasses my normal sales process completely – there’s rarely any commitments offered by the prospect, rarely any chance for face-to-face sales meetings, no chance to present my proposal, and quite simply it involves far too much work on my part – maybe several days of research and proposal writing. I simply do not have the time to work for free like this and also do not like giving away free info to companies like this.

    My advice is when you receive an interesting RFP, give the client a ring and have a chat. Ask them some telling questions, like:

    how many other developers have you approached?
    Do you have a preferred vendor?
    Who wrote the RFP for you?
    What is the main criteria you will use in selecting the vendor for this job?
    Would you be willing to let me come down an make my presentation rather than have me write an RFP (i.e. can we avoid the whole proposal writing thing)?

    The above has worked twice for me, both with public sector clients. But in both cases, an RFP had been issued mainly because the clients didn’t have a clue how to source a developer and they were simply clutching at straws, so when I turned up with all the answers, they dropped the whole RFP idea and just gave me the job. But in most cases, this approach probably wouldn’t work, not if the organisation in question requires the formalities to be completed.

    Another option is to contact the company and politely tell them that you do not respond to RFPs, but would happily offer your services as an independant consultant, either to help fine tune the project spec (point out a couple is ‘issues’ with the RFP) or to assist in any way during the project. Again, this approach has worked for me on several occasions, and in fact, this is now my standard response to most RFPs I receive.

  • ikeo

    Awesome comments shadowbox.
    I’m going to borrow your “techniques” if you don’t mind ;)

  • http://boyohazard.net Octal

    At the risk of sounding like a complete newbie, how do you recognise an RFP, or distinguish it from other enquiries? What are the signs one should look out for? T.I.A

  • aneitlich

    Octal,

    An RFP generally says “Request for Proposal for….” right up top. It is a formal document stating what the prospect is looking to achieve and what kind of information they need from the potential bidder.

    Generally big companies and government entities use RFPs, and start by asking people involved in the process for their suggestions of vendors who should be invited to bid. At some very large firms, there is an “approved vendor” list, and RFPs are sent to appropriate vendors on that list.

    Andrew

  • timjpriebe

    I’ve only done a handful of proposals, as I tend to be pretty careful about what potential clients I spend that much time on. So far, I’ve only not gotten one of the jobs, which is apparently a decent track record.

  • http://urbanyukon.com Geof Harries

    I’m not prepared to spend 3 or 4 hours preparing a proposal for a job that 75% of the time has already been allocated.

    3 or 4 hours? For me, I typically spend between 3-7 days writing a response. Some of these are $20,000 projects while others are $500,000 in size, but nonetheless.

  • DeepBlue1984

    I am preparing a summary and asking a fee for preparing the full proposal explaining that the fee will be subtracted from the final cost, if ill win the job.

  • wwb_99

    I am actually usually on the other side of the fence, as I work for a place that tends to hire alot of outside contractors.

    Generally if we do send out a RFP its because we don’t have an in-house favorite to hand the job to rather than to make oversight bodies happy.

  • http://www.revmedia.com dhecker

    I only respond to government RFP’s, and only ones that I think I can get.

  • http://boyohazard.net Octal

    Thanks Andrew.

    This is one of those times when I am actually thankful for the anonymity of the net :D

  • kenzsa

    This post is the first that I have seen from Andrew that strikes me as “off the mark”. An RFP is a legitimate business tool that is used by many (in fact I would hazzard to say most) businesses that are looking to the market for a best of breed product or service.

    To suggest that an RFP is more often a biased process, one often tainted by your competitors, and one that you have little chance of winning, only suggests to me that you have had limited, yet bad experience in this topic.

    I am a middle management contractor and have 11 years of contract experience. In that time i have worked with 8 different companies (corporates and SME’s). All of these have utilised an RFP process as part of some of the projects they ran, and I have yet to see any of the behaviours that you have mentioned – at least by that firm or those we were responding to.

    I am not saying that it does not happen, I am sure it does. However I feel it is significantly rarer than your blog suggests.

  • shadowbox

    Nah, Andrew hit the nail no the head on this one.

    The whole concept makes me whince – client sends out RFPs to at least 8 other developers (maybe 30, maybe even gets mass circulated). no developer is allowed to follow their tried and trusted sales process at all. There’s no commitment from the client (other than ‘they’ll read your proposal’). Quite commonly, you don’t even get any feedback if unsuccessful. You spend a massive amount of time and resources responding. You give up a lot of free consulting and advice. No doubt various ideas from unsuccesful vendors get robbed in the final project. And quite typically, it’s simply a case of lowest quote wins, regardless of solution proposed. Anyone like the sound of those odds? Maybe 10% if you’re lucky? I often wonder how companies who respond to RFPs ever have time to get any actual development work done.

    Personally, I prefer networking and referrals. Quite commonly, I’m the only guy being considered for the job (I like those odds). Worse case, I may be 1 of 3.

    I’m sure eveyone has different experiences of RFPs, but hand on heart, I really don’t feel that it’s a way of finding ‘best of breed’ developers – it’s just a way of finding ‘a’ developer.

  • aneitlich

    kenzsa,

    Your points are well taken in that companies can use RFPs to find developers. In fact, the world’s largest companies usually do — although they are calling on huge IT firms that have resources to produce responses.

    This blog aims for the smaller web designer or developer. For them, the lowest-cost, highest-impact way to get business is through referrals and other high-touch value- and trust-based approaches.

    shadowbox’s comments are a great explanation of why this is so.

  • Allen S.

    On every RFP I’ve responded to, our quoted price comes in as much 2-3 higher than the winning bid. Usually there is not enough information in the RFP to give an accurate quote, so the fudge factor is usually high. Usually, we know that we are going to loose on price.

    However, even when the chances of winning a project are slim, submitting a proposals we think it is a good long-term marketing strategy. It is a way to get our name out there. Submitting a well thought out proposal can be a way to build a relationship for future projects.

    After we’ve submitted a proposal, we “earn” direct access to the “person of infuluence” and stay in-touch for future projects.

    Not sure if this is a good strategy or not… What do you think?

    -Allen

  • aneitlich

    Allen,

    That is a good strategy, per #2 in the original post. You just have to be sure to nurture the relationship, meet the right people, and learn about future initiatives so you can get in there.

    Worth doing for clients you really want to work with.

  • donnad

    Very timely subject, thank you! I just received my first formal RFP yesterday. I live in a small city and I have worked over the years on relationships with other small web companies in the area (there is so much work to go around, at all technical levels, that we give each other new clients when we are overloaded and team up when necessary). I immediately emailed a couple of my “competitors” and we analyzed the RFP, which of course they had received as well. Conclusion? Not a project worth going for, too many questionable decisions already made. After reading this blog, I now realize that likely the preferred candidate helped write the RFP. I agree with the others that most of my clients are already “sold” when they contact me. Now I am sure my decision not to respond is the right one, thanks!

  • shadowbox

    If the RFP was sent as a Word doc, in Word go to File, Properties – it should show the author of the document. This can sometimes be quite a revealing discovery :)

  • Joe

    I am just starting out with my business. What about writing a proposal for a client that comes to you to go along with the contract. Basicly just a plan and why it will work, what is all included, and the price, even if they have a good chance to go with you.

    I don’t like the RFP thing, but just a proposal when a new client contacts you through normal sales to finalize the deal and make sure you are on the same page. After you have talked to them about what they need but right before they sign the contract.

    Also what about the idea of making potential clients sign non-disclosure/non-compete agreements before you submit a proposal for an RFP or otherwise?

  • shadowbox

    I wouldn’t spend any great deal of time writing up proposals for any potential clients, not unless I was getting paid to do so. In 90% of situations, it’s completely unnecessary – you can agree specs verbally, usually at the end of a successful sales meeting. Many web developers simply don’t know how to close a sale and seem to rely on the offering of writing a proposal to seal matters, when in most cases, your prospect is just waiting for you to ask them for the job.

    I think it’s unfair for any potential client to expect you to spend many hours writing up proposals for them. If you are a sole freelancer, time is at a premium, so I would suggest you look into improving your closing techniques and hence avoid the need to write a ‘sales’ proposal and instead write proposals that document an agreement you have to do business with a client. (Yes, there are situations where this won’t cut it, but I’m talking about small scale web developement, dealing with small businesses and the like, not public sector or large corporations who may have more rigid processes in place). http://www.honestselling.com is a great resource for improving sales techniques

    As for NDAs, that is completely unrealistic IMO. The best way to avoid people stealing your ideas for free is to never give them any ideas until they’ve coughed up some consulting fees. As a consultant, you should get paid for consulting.

  • http://websitefaq.com Ronny

    I never write proposals based on an RFP alone. If the request seems reasonable and the project seems profitable enough for us, I try to go into further details, and then a meeting.

    This way I can filter the bad RFPs (and there are a lot, you’re right about that), and race-to-win the other ones. Worked for me.

  • http://www.dannyfoo.com/minifolio/ Danny Foo

    Whenever we produce an RFP, the price factor is always the decision maker of the client. No matter how good the ideas you have and you tell them how you’re going to implement it, their budget just isn’t cut out for the price you’re doing it for.

    Now I’m thinking if the price should be included in an RFP. :|

  • David

    You can’t give up. I land about 1 in 10… but unless someone comes up with a better way of winning cold-call business, this is whatcha gotta do. But if you’re looking for a good place to find new projects to bid on, check out the RFP Database!

  • arrogant?

    Hi, I agree with this post. I often have assisted creating the RFP/RFT with the consultant or company. And are told “you are getting the job” from word go. This process happens a lot and I also am hesitant responding to a tender. I also accept a tender after I call the contact and form a relationship – either we did that work for your competitor or for your alliance partner or for your mate.

    I always ask how many they are tendering to and to whom, often they give me the company names. If the other companies are small operations, run different CMS (eg Joomla vs. dot Net), or are all over the country you can assume that they are going for budget only, will choose the person in their state, or already have a company in mind. I also ask for their budget. If its Government you can assume its worth over $50k.

    Every tender we do we always are 90% sure whether we will get the job or not and for the 10% we use it to build a future relationship.

    Tenders even though we have template responses, documents and copy we usually take a week to refine a document as well. I like to only respond to tenders worth over $50k. Anything else I can get from them coming direct to us and they want us and there is no hard sell.

    I am sure this is all sounding arrogant, but we are too busy to waste time on tyre kickers!