Are RFP’s evil?

According to a few blogs I ran across today, RFP’s are evil. Read these posts here

The three articles above are written by some folks in the Marketing industry but their points about RFP’s and/or proposal’s being worthless are very good and can be applied across many industries. One of the best lines from the articles comes from the RFP’s are Evil post when the author (Spike Jones) writes:

companies still issue them and agencies still scramble to answer them. And in scrambling to answer them, they give away the only thing that they get paid for – their time and ideas. Is that really good business? If you don’t get the account, then you’re out all that time and money. If you win it, then you spend the first two years trying to recoup the money you lost.

I’ve been spending a significant portion of my time lately responding to RFP’s for my employer (a very large IT Outsourcing company)…at times, there have been upwards of 20 to 25 people on a conference call to talk about the response…and these conference calls last for hours and are very frequent (sometimes 2 or 3 times a day). In addition, a ‘solution development meeting’ was held in an office close to the potential client and close to 30 people flew in for this meeting to ‘develop a solution’.

I wonder about the time that is spent on responding to this RFP and whether this time would be better spent doing something else. Large IT Outsourcing deals seem to always be handled using RFP’s, but I wonder whether these RFP’s would be necessary if these large IT organizations would take the time to develop relationships with potential clients?

Most of the organizations’ that I’ve been a part of have responded to RFP’s and have won some business from them, but I think the success rates for winning a proposal is probably around 20-25%….not a good ratio when you look at the amount of work involved compared to the amount of business won.

The most profitable clients (and the best clients) that I have ever worked with are those that I (and the organization) had a personal relationship with. Now…some people might say that it is tough to have a relationship with every potential client out there….but is it? If a person truly believes that then perhaps the marketing & business development teams aren’t really doing their jobs…or perhaps the organization is trying to do something that they aren’t capable of doing.

I hate RFP’s but I understand that within some organizations, they are a cost of doing business….but I hope to one day be in a situation where I can create that trusting relationship with my clients and potential clients so that I never have to submit another response to an RFP.

Lewis Green, the author of the “Dirty Little Secrets about Proposals” article has this to say about proposals and RFPS:

My proposal writing begins as soon as I decide to go after a certain client’s work. Here are the steps I take once that client is identified:

1. Background Research on the business, especially financials, press releases and media articles.
2. Through that research, identify an area where the business needs help that I can offer.
3. Look for a way to meet the decision maker (networking, referral, lead, or, if necessary, a direct mail campaign followed-up by telemarketing.
4. Get a meeting if that decision maker is interested in my services, and listen, listen, listen.

I love it…especially number 4 -> Listen Listen Listen. If organizations were listening to their clients and potential clients, perhaps they wouldn’t have to respond to so many RFP’s.

[tags] business development, RFP, proposals, relationship based selling [/tags]

2 responses to “Are RFP’s evil?”

  1. Spike Avatar

    Nice additional thoughts, Eric. Relationships are sometimes underrated, but always pay off.

    Great post. Keep up the nice work!

  2. Eric Brown Avatar

    Thanks Spike! Thanks for the idea for this post!