You’re Invited to Submit an RFP—Now What?
Through the years, I have worked with many salespeople who receive a sudden call from a company’s procurement department inviting them to participate in an RFP. Many times, these salespeople get even more excited when they read the RFP overview that states the company's promotional spend is projected to be north of $1 million. The train of thought from the salesperson is, hey, I am getting a decent chunk of business now. If I could get the whole thing, that would be a game changer.
The buzzkill usually takes place when the salesperson reads through the RFP and sees questions like "What is your markup?," "Are you willing to own inventory?" or "Can you perform a punchout with our ERP platform?" Where it gets really cringeworthy is when the RFP requests you to price out a hundred vaguely described products, request a rebate or ask for a signing bonus. To add a cherry on top, you find out 20 or more of your closest competitors have also been invited to participate in the RFP. That feeling of elation can quickly turn into apprehension or even not wanting to participate anymore.
As a salesperson or distributor owner, you have a choice. Do you make a run at filling out the RFP when it could take weeks to complete, but at least have a chance at new business? Or do you walk away from the RFP in the hope that you will continue to obtain maverick spend from your core buyers?
At Boundless, I look at RFPs on a regular basis, and I ask myself these simple questions:
- Do we have a history with this customer?
- Do we have buyer champions within the company that will vouch for me?
- Do we have expertise in this industry?
- Can I execute on the majority of what they are asking and still make a profit?
The more affirmatives I make in response to these questions dictates whether I allocate the time and resources to put together a professional RFP. Make no mistake, to compete in an RFP takes resources such as time, expertise and financial investment. This means we take time to address all the questions and, hopefully, make the cut to present to the client. We have access to team members that have the expertise to address technology (i.e., single sign-on) and supply chain (i.e., compliance) questions, and the financial investment to put together creative storyboards and product sampling.
If we don’t have an existing relationship or any champions within the prospective company, if we cannot do what they are asking for (i.e., own inventory, provide punchout integration, etc.), or if we are not willing to be in a bidding war with countless other distributors, we pass on it. There is nothing worse than spending countless hours filling out an RFP when we have no shot at winning the client. An even worse scenario is winning an RFP that is barely profitable and takes away a salesperson’s time that might be spent cultivating more profitable business elsewhere.
So, here’s the takeaway: Be smart and don’t chase shiny objects. One thing you cannot control is the hours in a work day. Spend those hours on opportunities that are financially fruitful. The good news is there is a wealth of opportunities to be had out there!
Pat is currently executive vice president of sales at Boundless. Prior to joining Boundless, Pat was vice president of sales for Toppers, a Top 20 industry supplier. Prior to Toppers, he served as vice president of national accounts for Norwood Promotional Products, one of the largest promotional products suppliers in the industry. In his free time, Pat enjoys drinking a cool beverage while attempting to play golf.