Understanding how to evaluate an RFP in order to make a better decision about participating is the number one way to keep your sales costs down, and your win percentages and profit up.
In order to make better “Go vs. No Go” decisions about RFPs I suggest you consider the following five decision making filters.
Things to Consider: If you did not respond would this compromise a long-term relationship or signal disinterest in a potential client in which you are interested? Do you even have the time and resources to write and submit a proposal?
Things to Consider: Schedule for completion, current capacity to deliver, sufficient expertise in the required area, appropriate licenses/registrations/insurance, potential conflicts of interest, etc.
Things to Consider: Will the work be profitable, does it align with our marketing strategy, will it strain our resources and impact on other projects, is there strategic value to getting this work, is this a way to introduce/position our firm to a potential new client for future work, do we not want our competitors having this work?
Things to Consider: This requires some bench marking by your firm to get a “best guess” as to how you and your competitors will rank in the competition.
Things to Consider: When calculating your cost to submit use the opportunity cost which is the “retail value” of writing this proposal not your internal hard costs. Would winning the project mean 10X the cost of writing the proposal? 20X? 30X? And what fee multiple does your firm need to cover the cost of writing a proposal as part of the project delivery cost so that the project remains profitable?
If you’re interested in keeping your sales costs down, and your win percentages and profit up, consider joining us at one of our upcoming RFP seminars – If You Must Respond to A Request for Proposal, Make Sure You Win.
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"This should be required reading for consultants AND their clients - especially the part about RFPs." - Blair Enns, Win Without Pitching