You know the drill... you get an RFQ(request for quotation), RFP(request for proposal) or RFI(request for information) and you're wondering whether or not you should respond? As you ponder, you decide that if you don't comply you'll lose the opportunity to have a shot at the business! You know a lot of these are really nothing more than "price checks" but you're "afraid" that if you don't respond you may seem "dis-interested" and they'll take you off their list. So, you do the work and "hope" that the outcome will be in your favor. Once again you've become the "hunted" rather then the 'hunter".
Through our work with hundreds of companies in a wide variety of businesses, we have learned and identified that much of this "quoting or proposing" ends up being a waste of time and does nothing more than provide leverage for prospects to beat up their current vendor. Or worse, we provide unique ideas or solutions that become a "shopping list" which allows the prospect to take our ideas and share them with the competition. An unfortunate and expensive process we call "cloning" or "free consulting". Expensive because it not only wastes your time but allows them to "commoditize" your offer and drive your margins into the toilet!
We regularly ask our client companies what their experience with these "undeveloped opportunities" has been and the answer is always the same, "low closing percentages"! On average we're told that closing ratios average between 10-20% (often lower), but because they "close some" they feel like they need to respond to all. They have a tough time distinguishing between the ones that are "likely to close" vs. the ones that are "unlikely to close" and because of this see no alternative other than to respond. Most of our clients tell us it is "part of the sales game" and a necessary cost of doing business.
So, the strategy would be to win a higher percentage of our quote, propose requests and stop wasting time and resources on "low percentage" opportunities. The tactic that we have created to implement the strategy is called a "filter". Filters are used to take a large quantity of substance and separate good from bad or high quality from low quality. It all starts with making a decision to "not respond" to RFP's or RFQ's in the way you have been asked (remember, you always have a choice). Responding with information does nothing more than make you look and sound like everyone else and has you losing control of your information asset! Your zeal to respond quickly and demonstrate your capabilities ends up costing you a lot of money!
Let's start by responding to these requests with one of our own... a "filter" if you will. Let's start by responding with an "RFM", or "request for meeting". Rather than just sending what you've been asked for "call to request a meeting". Anyone truly interested in doing business with you should also be willing to spend some time with you. Anyone who will not take the time to meet with you clearly identifies themselves as someone who feels you are not worth their time, which I would suggest means they are not really a good opportunity for you. This simple tool (followed up by other tactics and filters that we will discuss in future posts) will quickly help you "filter" real interest and opportunity from "smoke screen, time waster, column fodder and price check".
Action Step: Stop responding to those RFP's, RFQ's and RFI's with what you have been asked for but instead respond with an "RFM". You'll quickly know where you stand and will save your valuable time and information!