I used to co-own a small software company and RFPs became so burdensome and expensive to answer that we eventually adopted a policy of refusing to reply. Yes, it cost us business opportunities but I believe that, in the long run, we were spending more money answering the silly things than we made on the sales. Since then, I have done a small survey (OK, a very small survey) and come to believe that companies easily spend 33% to 50% of their sales budgets on RFP responses. In my book, that is just plain stupid.
In a nutshell, the RFP required us to spend an inordinate amount of time answering questions which both the customer and the vendor knew the answers to without allowing us to explore the areas which differentiated one product from another. Put another way, the RFP asked the question (in tedious detail), “Will this product solve my problem?” The RFP failed to ask, “How will your product solve my problem better than any other product can?” The latter can only be effectively addressed through a conversation between buyer and seller.
For a long time, I have been meaning to write an essay on what is wrong with the
That Register article is a good read.
Since that RFP we sent out left my desktop I’ve been feeling a bit guilty about it. Mainly because as they have been coming back completed I really haven’t been giving them the attention on my end that I’m sure the vendors gave them on their end.
I do know a little about the vendor side of the RFP process because on one side of our business we are a vendor. Granted I’ve only ever filled out two of them but I do know that both times it was stressful. Some of questions just didn’t make sense, and I would spend an enternity trying to figured out exactly the best way to fill something out.
The RFP process for our latest venture came from the top down. Personally I wouldn’t have done one for this project. Simply because I’ve done so much reading and been to so many trade shows that I know who the big players are out there. I have my list of technical details that I need to see… but beyond that it all comes down to vendor demonstrations and on-site visits to some of their current customers to see what the scoop is. The kind of questions answered and raised there just can’t be done with a Microsoft Word document going back and forth.