A few years ago, I said no to £100k, switched off the laptop and went home.
It was a conscious decision. I was a commercial manager in a B2B agency, we were behind on target, any commission that quarter was looking unlikely and I’d taken it upon myself to say no to a potential sack of cash. I’d just said no to replying to an agency RFP (request for proposal) with a budget of £100k.
What was I thinking?
As with many things in life, a little bit of context goes a long way here. In the media space, projects and budget can come through a variety of routes. The big two are via client direct or via their chosen agency.
If the latter, the agency then goes out to media partners with the RFP. And frankly, I’d had enough of the whole shebang. Too many late nights, last minute deadlines and monumental efforts to get a pitch deck together. This effort came hand in hand with tying ourselves in knots while attempting to get the brand / content calendar / audience / publication architecture (delete as appropriate) to ‘fit’ the brief and give us something approaching a fighting chance of winning the damn thing. (And often it all had to be summarised into a single cell on excel – but that’s another chat for another day).
This, folks, is the unglamourous side of B2B that they don’t mention in the agency show reel.
Just say no?
Looking at the numbers, responding to tenders just didn’t stack up. Win rates were low and effort was high. Of course, some of this was on us and the quality of the response. But after some time the reality hits that the vast majority are simply never going to go our way.
As I’ve gotten older (and wiser?), I’ve learned to place more value on both my own and my team’s time. Just because there’s a big £ number at the other end, it does not mean you should always chase after it.
To RFP or not to RFP? Let’s ask an expert.
I recently sat down with Alexandra Allen, someone who knows her way around the stormy seas of the bidding world. In a previous life Alex headed up the bid team as Business Development Manager at Sustrans and has recently taken up a senior operations role at Bristol cleantech scale-up, Sennen.
I asked Alex about RFPs and how to put some structure around decision making. How do you know whether it’s worth putting the effort in and responding?
“There are so many factors to go through. At Sustrans we had a process of assessment which included dedicated teams assigned to work through the opportunity vs a scoring matrix. However, that level of resource intensity isn’t the right move for all businesses.
What I have found really helps is to simplify this down to asking four questions:
1, Does it fit with the company’s strategic priorities?2, Do we have the resources to write a good bid?
3, Do we have the resources to actually deliver the project?
4, How likely are we to win this project?”
Expanding on each of these a little.
Does it fit with the company’s strategic priorities?
By winning this work is it going to help us deliver the wider business plan?
Do we have the resources to write a good bid?
If something comes in at short notice, the reality is it will be very challenging to put together a high quality response. Consider that we may be up against others who have had a full three weeks to work on their own response.
Do we have the resources to actually deliver the project?
Project management resource, technical resource, account management resource. Do we have this ready in-house, or can we bring it in at pace if the project came our way?
How likely are we to win the project?
This is a bit more of a judgment call. On one hand this is about the quality of the proposition; how much of a stand out do we feel we are compared to the opposition?
On the other, there is the context of the extent of the relationship to date between us and the prospect. Here, there is a spectrum of opportunity. At one end is applying cold into a tender found on the web and the other is sitting down with the prospect and writing out the RFP with them, building the question sets and creating their must have / should have / would like to have, wish list. It’s pretty obvious which end of the spectrum is the place to be.
Make the call
The reality is even with the application of process, a majority of RFP tenders will still land in the ‘maybe’ pot. What to do then? Alex suggests:
“You have to look at why it’s a maybe. Is there consensus across your team, are they agreed on those four areas? Has everyone even read the documents properly? Is what the client is asking for realistic within the budget and timescale? Can we resource it?
To help this process, at Sustrans we developed a scoring sheet which was then referred back to when making the final decision. We tweaked the tool over time, periodically assessing our assessments themselves to further iterate the score sheet. The goal here was to end up with fewer ‘yes’ and ‘maybes.’ We would then be able to focus on those minority that came out as ‘yes.’ “
Consider the opportunity cost
Opportunity cost is often overlooked. Do so at your peril. Opportunity cost is not just the time taken responding to the brief but also means the team has been distracted from core work. Alex again:
“The nature of RFPs is that they always seem to land at the most awkward time and with an annoyingly tight turn around. Even when you’ve been tracking the opportunity over a period, and just when you think it’s going to arrive in the first week of June, instead it arrives in the third week of June, just before everyone is about to take holiday. The effect is like a bomb dropped on the planned work for the week.”
If it’s possible to get a grip on opportunity cost and weigh it against win rate AND profit margin of the potential work then it may well be the informed choice not to participate at all. It simply isn’t worth it.
In my own experience, there is an inverse relationship between how much of a deadline is given and how likely it is to be won. RFP lands on a Friday at 3.45pm with a Monday 9am deadline? The reality is we are just making up the numbers, the ‘third quote’ to satisfy someone in management on the other side.
Ask for feedback
To improve the odds of winning, feedback is key. Ask for feedback when the RFP is lost, ask for feedback when it’s won. All feedback is good feedback and can then be fed directly into the next tender, be it layout, language or key deliverables.
Play the long game (sometimes)
It would be easy at this point to become quite negative and just turn down RFPs en masse. However, thinking more strategically, there may also be merit in taking part even if just ‘making up the numbers’ for a particular brief.
What if we’ve identified a potential long term partner and we’re prepared to put the ground work in to build a relationship? Alex’s view:
“By showing willingness and responding, you are starting to build the relationship. While you might not be expecting to win, taking part could still be worthwhile. It goes back to the first of the four questions – what is your strategy?
If the answer is to grow the client base with key partners, then taking part and doing the proposals is all part of raising awareness of what you do.”
A key point here is the strategy needs communicated from management to junior members. Those junior team members will likely be the ones having to take on the heavy lifting of creating the response – they need to know why it’s important even if on the face of it, it could be seen as a lost cause.
Place value on your own time
Losing bids can have an impact on the team. We all like to feel we are winners. If the win rate is less than two in three, there is a real danger that a feeling of ‘we’re not very good’ will start to pervade.
This is why it is so important to concentrate on taking on a smaller number of responses and doing them well.
The best place to be is on the inside
If it’s possible to be on the inside, then the chances of winning are significantly higher. If you can position yourself as the confidante who helped scope the brief, provided technical knowledge, helped write it, added ‘must haves’ that play to your strengths etc, then you are in a strong position to win.
Bid writing is a skill
Bids are written in a very particular way. A bid is both a sales document offering our solution while at the same time responding to specifics listed in the RFP itself. Alex makes the point:
“Blending those two things is a skill. We have to give them what they need to see to score highly and win the work. It’s really easy to go off track! Having a review process is important to check back: have we answered the questions and does the pricing add up?”
At the same time, don’t be slow in cutting some corners. It’s a good goal to set out to have a ‘mega-deck’ resource bank ready to go from which whole sections can be dragged and dropped in with minimal tweaking into the response.
A similar approach should be applied to pricing. Anyone in the team should be able to price a proposal, it should not be reliant on a single senior person. If this is currently the case, then remove the bottleneck, it’s self-created.
And finally, if there’s one thing to do…
“The number one bit of advice is Answer the Questions!”
Thanks Alex!