RFP? Sales Rep: No Thank You
Based on a true story ... An RFP arrived in the mail (or, RFQ if you prefer, “Request for Quote” over “Request for Proposal”). The salesperson looked it over and gave it quick consideration before choosing his response: He wrote, “No thank you” across the cover page and mailed the entire package back to the name at the bottom.
No thank you? What kind of response is that? Who would turn down the opportunity to provide pricing? Isn’t this what we are all hoping for? The sales rep must be either cocky or crazy or both to make such a ridiculous choice.
If this is your thinking, you are not alone. Upon receipt of the returned RFP, the buyer had the exact same thought.
The recipient of the proposal request was a veteran salesperson from a commercial printing company in the Northeast. The RFP was for dozens of different printed pieces, each in multiple quantities.
It would have been a nice account, clearly worth hundreds of thousands of dollars. A salesperson can work 18 months or longer to get this kind of opportunity and, here, this one is casting it aside like another one will show up in tomorrow’s mail.
A few days later, the phone rang. It was the buyer from the company that sent the RFP. He was dumbfounded at the sales rep’s response, polite as it was, and was curious to know why it was rejected.
The rep explained: “I’m flattered that you thought of me and my company. We are certainly able to do this kind of work. In fact, this fits our equipment perfectly. However, we have no relationship - you and I. We have never met. I don’t know anything about your buying style or vendor selection criteria. Why us?
“What you are asking me to do is to spend hours of time sourcing material, a task that involves my purchasing department, and price each printed item in different quantities, requiring that my estimator push aside other work for this major commitment. I could not ask either of these gentlemen to get involved if I first didn’t think that it was worth their time. Since there was little chance of us earning this business, I wanted to at least get back to you and let you know we would not be participating.”
“I’m not sure whether to be intrigued or offended,” the buyer replied with a chuckle to indicate that he was more the former and less the latter. “I’ve never experienced this kind of thing before and I just had to call.”
Then, he paused before adding, “This bid is not due for a couple of months. Would you consider coming in for a conversation? I need to meet you.”
The sales rep agreed and the meeting time was arranged.
When the day finally arrived, the salesman was ushered into a conference room where the buyer soon joined him. They shook hands and exchanged some small talk before getting down to business.
“You know, I’ve thought of little else since our exchange the other day,” began the buyer. “I have told the story to other buyers and received reactions ranging from the incredulous to the admiring. You’ve already made quite an impression here! I’ve got some questions regarding your capabilities and equipment list. I’d also like to know about your turnaround times and whether you can handle our international needs.”
“I’d be happy to provide this information,” responded the rep. “In return, I’ve got some questions of my own: Why am I here? Are you unhappy with your current vendor? How do you choose the company that you decide to work with?
“My accounting people will want to talk to yours, and my production team should also speak with their counterparts here. Let’s make sure that this is a good fit. In getting back to the issue of your current vendor, if I provide favorable pricing, will they get the opportunity to match or beat it?”
The buyer sat back in his chair, once again dumbfounded at the approach of this salesperson. Was it hubris or overconfidence? He responded, “In 25 years at this job, I have never been interviewed by a vendor!”
Building Long-Term Relationships
“I am sure this approach could be taken the wrong way very easily,” replied the sales rep, “but this is not false bravado. I work very hard for my clients and have an important core belief: A good vendor is as important as a good customer. This means that we choose our customers every bit as much as they choose us. You see, my goal is not limited to earning your business through this RFP. My goal is to be doing business with you 10 years from now. In order to do so and to make that happen, this needs to be a special relationship - one that is not transactional, but rather a strategic alliance.
“There are lots of print manufacturers out there and I’m sure you have contacted several in order to get the lowest price possible. I can tell you right now, that’s not going to be us. That’s not to say we won’t be competitive. We absolutely will be. But if this is strictly about price, it will be a short conversation. Providing low prices alone will not get us to that 10-year goal. Tell me, what’s the average tenure of your vendors?”
The buyer frowned and said, “I’ve never thought of it in those terms. Let me think for a minute ... I’d say somewhere between two and three years.”
Now, it was the rep’s turn to frown. “That’s not good,” he said. “Every time you change vendors, there is disruption which causes a chain reaction that ripples through every department of your company as people have to get used to new standards and new personnel. There are costs associated with this disruption that never show up on a purchase order, but which absolutely affect your bottom line.
“One key reason to do business with my company is that we will continually challenge the status quo and provide your people with new ideas and new ways to solve your production challenges. We can meet with your product and/or marketing teams to provide input for future growth or development. We have ideas for improved efficiencies that we are happy to share. And, once again, it’s important to understand that the work we do in this capacity saves you money and increases your profitability. However, since this, too, takes time, we want to make sure that we are working with a customer who appreciates and rewards us with their loyalty.”
“When I first started in this purchasing role, vendor relationships like the one you speak of were common,” mused the buyer. “We considered our suppliers to be a key part of our success. Slowly, as the years have gone by, we’ve gotten away from this dynamic and changed the focus to something that begins with a dollar sign. Perhaps it’s time to rethink that strategy.”
For further information, please visit BillFarquharson.com