You're About to Be the Third Column of the RFP Evaluation
A Request for Proposal (RFP) has landed at your desk and it’s a huge opportunity for your company. You’ve already calculated the commission you could earn if you win this deal and started to list out in your mind how you are going to spend it.
We’ve all been there ... You cannot win if you don’t play, right?
Last week in a Sales Effectiveness training during the Objection Handling session, one of the sales reps mentioned that it is great to be able to handle objections more effectively, but asked, “What if you don’t get any objections?”
I was curious to find out more. How is it possible to not get any objections? The possibilities: First, your company really isn’t being considered in the first place. Either they’ve determined already your solution doesn’t meet their needs or they perceive a gap between your solution and what the competitor is offering. Or the most unlikely scenario, you blew them away with your first meeting and they are ready to sign the contract.
Chances are that they’ve already narrowed down to either the top one or two providers, and the RFP is a just formality to justify their decision. A potential deal with 0% chance of winning. That would equal exactly $0 in commission.
What causes defect in the sales process isn’t what you know, it’s what you don’t know.
What the rep didn’t know in this case was that he was already the 3rd column on the RFP evaluation. Here is the scenario:
- The rep thought he understood their needs (he had been sent a scope document that had everything outlined)
- He knew the evaluation criteria (because it was included the RFP document)
- He’d had a live conversation (with the RFP contact in the Purchasing department)
- The solution was a perfect fit
Cha ching, cha ching!
Not so fast. He did respond to the RFP. He received no objections. And, they didn’t win the business. After digging in a little deeper, we found out what really happened:
- The prospect wouldn’t agree to a meeting to discuss their needs
- The information contained in the RFP was only one person’s perspective and didn’t fully represent the selection criteria
- He had not ever been in contact with any of the Key Decision makers
- The scope document the prospect provided was old and hadn’t been updated
- The prospect just needed the price to be able to fill out the 3rd column on the evaluation because their internal procedures required it
In hindsight, the rep knows he could have invested his time better working on opportunities with a higher chance of winning. All of the signs were there, but he got caught up in the emotion of catching this big fish.
In the article written by Mike Jacoutot, Why Responding to RFPs Hurts Your Sales Organization, he shares that the average fully-loaded costs to respond to an RFP is in excess of $24,000. That’s $24,000 dollars!
Do you know how much it costs in your company to respond to an RFP? Are you winning all of them? Do you have an objective process that everyone can follow to determine which ones are worth that investment? If you answered no to any of those 3 questions, contact Butler Street before you throw more money down the drain just to be a 3rd column on an RFP evaluation.