RFP Response (Part 1) - Self-Qualification
With tighter budgets dominating the current economic climate, many organizations are embracing the use of RFPs to identify and evaluate their suppliers. Responding to RFPs can be time-consuming and resource-intense. Chasing leads that do not profit your organization (monetarily or otherwise) is a waste of your valuable resources and distracts you from leads that are more attractive, and likely to close (Racki, 2017). This decision model helps your organization make collective and informed Go/No-Go decisions about responding to RFPs.
This model guides organizations through the following steps:
- Assessing whether an RFP is a good fit for your organization
- Assessing your likelihood of winning
- Assembling your RFP response team
This model is intended for sales managers, project managers, proposal managers, and capture managers of organizations responding to RFPs.
Organizations often have to make hard decisions on resource allocation. With several RFPs at the door, it can be tempting to respond to all of them, but the investment of time, energy, and the cost is not worth it if the chances of winning are too low (Austin, 2011).
The decision to respond is made based on three factors: opportunity fit, likelihood of winning, and availability of winning resources (O'Guin & Kelly, 2012). Responding to opportunities that are not a good fit can dilute your brand and undermine your credibility (Warrillow, 2013).
Determining your likelihood of winning in an objective manner is crucial because this directly influences your decision on whether to proceed. Protect yourself from wasting resources, and protect your margins, by responding only to RFPs with a good chance of winning (Signorelli, n.d.).
If the RFP is a good fit and your organization has an acceptable probability of winning, you should next determine if there is irrevocable commitment of resources in support of that decision (Spetzler, Winter, Meyer, 2017). If the winning RFP response team cannot be formed in time, you will have to pass the RFP.
Formalizing this Go/No-Go decision making process brings greater focus to debate, greatly increases the quality of the discussion, and improves your win rate (O'Guin & Kelly, 2012).
Assess the opportunity fit:
1. RATE a set of criteria to qualify this opportunity’s fit for your organization.
- 0 = Not at all true. We shouldn’t respond
- 1 = Slightly true. This may be a waste of time
- 2 = Half true. We could still respond
- 3 = Mostly true. The RFP is worth a shot
- 4 = Absolutely true. We should respond
2. DISCUSS RESULTS and review alignment. As a team, decide whether or not there is a good fit. If there is, proceed to the next step.
Assess the likelihood of a win:
1. RATE a set of statements to assess your chances of winning.
- 0 = We have no chance of winning
- 1 = We have a minimal chance of winning
- 2 = We have a decent chance of winning
- 3 = We have an advantage over the competition
- 4 = We will definitely win
2. DISCUSS RESULTS and review alignment. If the team thinks that there is an acceptable likelihood of winning, proceed to the next step.
Assemble the RFP response team:
- NOODLE/COMMENT: For each of the departments listed, identify who should be involved in creating the proposal.
- DISCUSS and decide who should be on the RFP response team.
If your group's decision is to respond to the RFP, use our decision model “RFP Response (Part 2) - Creating a Winning Proposal” for the next steps in the RFP response process.
- An informed Go/No-Go decision on whether to respond to the RFP
- Objective assessment of the chance of winning the business
- Development of an RFP Response Team, should the organization decide to respon
BENEFITS & IMPACT
This exercise will enable:
Quality – Make a well thought out and informed decision on which RFPs to respond to.
Efficiency – Make the best use of your organization’s limited and precious resources by responding to RFPs selectively.
Engagement – Easily engage the right stakeholders at the right time, synchronously or asynchronously in the decision-making process.
Agility – Develop a repeatable process to vet all potential RFPs and identify the high-value ones worthy of your time and resources.
Austin, J. (2011). When NOT to respond to an RFP. Law Practice Today. https://www.americanbar.org/publications/law_practice_today_home/law_practice_today_archive/september11/when_not_to_respond_to_an_rfp.html
O'Guin, M., & Kelly, K. (2012). Winning the big ones: How teams capture large contracts. (n.p.): Knowledge Link.
Racki, K. (2017, April 11). How to qualify a lead before sending a proposal or RFP response. Proposify. https://www.proposify.biz/blog/how-to-qualify-a-lead-proposal-rfp
Signorelli, T. (n.d.). How to win the RFP game [White Paper]. Thomson Reuters. http://info.legalsolutions.thomsonreuters.com/pdf/managing_partner/L-389740.pdf
Spetzler, C., Winter, H., & Meyer, J. (2017). Decision quality: Value creation from better business decisions. New Jersey: Wiley.
Warrillow, J. (2013, March 7). Death by RFP: 7 reasons not to respond. Inc. https://www.inc.com/john-warrillow/death-by-rfp-seven-reasons-not-to-respond.html