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Request for Proposal (RFP) – Discuss things that should be considered when responding to a request for proposal in writing and why. Describe what is considered the single most important aspect of resp...

Request for Proposal (RFP) – Discuss things that should be considered when responding to a request for proposal in writing and why. Describe what is considered the single most important aspect of responding to a request for proposal.

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Things which are to be considered when responding to a request for proposal:

1. Understand the process.

RFPs basically lay out all the specific project needs and questions the customer has, in one document, which is sent to numerous competing bidders. From there, the customer typically narrows down the submissions to a handful of finalists. The finalists are then allowed to ask any questions they have, and the customer may also ask additional questions of the finalists, by way of comparing and contrasting the various proposals.

2. Make sure you find out about RFPs in the first place.

You can’t close sales if you're not aware of the RFPs in the first place. So, you need to identify all prospective customers in your space, and make sure you are on their radar; ask to be included in their RFP requests. Oftentimes, bigger companies will engage third-party RFP process-management companies to run the process for them. Uncover those third-party companies active in your industry, and make sure you get on their radar, as well.

3. Prepare for last-minute requests, and tight deadlines.

RFPs can often come in last minute, with tight deadlines for submission (e.g., two weeks). The more complex the project, the tougher it is to pull together a thoughtful response in such a short period of time. For this reason, you need to have a template RFP on the shelf. Then, when the RFP comes in, you have 80 percent of the standard materials all ready to go and can focus on the 20 percent that needs to be customized for that particular proposal. Prepare for RFP responses to be a big distraction while they are happening; the better prepared you are, the less of a distraction they will be.

4. Have ready a well-written, thoughtful response.

A good response will typically have the following sections: (i) information about your company; (ii) what makes you better than competitors; (iii) your specific thoughts on the RFP project, and how you are uniquely qualified to succeed; (iv) answers to any of the customer’s specific questions; (v) your pricing section; and (vi) your "happy client" references.

5. Don’t disclose your “secret sauce.”

At the same time you are trying to distinguish yourself from your competitors, be very careful not to give away your “secret sauce” in your response. There are high odds that the customer will spot your unique advantage in your response, and may ask the other bidders if they can provide the same thing. That does two things: (i) educates your competitors on what you do; and (ii) gives the competitor the chance to say, “Sure we can do that!" whether or not its people were actually planning to do that in their initial response.

6. Bundle price where you can.

The more details you provide in your pricing proposal, the more specific the line items that the customer can try to negotiate down. So, as an example, if you are a platform technology vendor, don’t detail pricing for all your various features and functionality in isolation, line by line. Instead, aggregate pricing for the platform as a whole.

7. Don’t quote your lowest price.

I have previously written about the art of negotiation. The point is, you need to leave the customer room for a “win.” And that win typically means letting the procurement department look smart to its boss, by having its members negotiate further price savings from the original quote. So, let’s say you normally like to price your business with a 50 percent gross margin. Instead, put a quote into your RFP with 60 percent, knowing that procurement will be expecting at least a 10 percent haircut from there during the process.

8. Strategically leverage the Q&A process.

There are two parts to consider when asking and answering questions during the Q&A process: (i) protect yourself, and (ii) make life miserable for your competitors. As for the former, all questions asked and answers answered will normally be shared with all the competing bidders. So, be careful not to ask any question where the questions themselves, or the answers therefrom, will educate your competitor on how exactly you do your work -- an advantage you want to keep secret.

9. Beware the procurement department.

There are typically two departments involved in the purchase decision: (i) the businesspeople needing the solution; and (ii) the procurement department negotiating the contract. Procurement's job is to save the company money, and oftentimes, its staffers' personal bonuses are tied to the quantity of those savings.

10. Leverage back channels.

During the RFP process, you are typically disqualified if you reach out to the customer, trying to push or promote yourself. The customer's people don’t want to be distracted by numerous bidders while they are trying to do their work. But, you need intelligence during the process, so you can act on that information before it is too late.

Most important aspect is that you shouldn't unveil your secrets, even to your close ones.

Note: I tried my best in answering the question. It'd be appreciated if you leave an upvote. Thanks in advance.

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