The third step of the B2B Purchase Process is the Request for Proposal (RFP). As our dear readers have learnt, just because the job description is detailed and you check all the boxes, you do not get a job interview! Similarly, from the point of view of the B2B Marketer responding to RFP’s does not mean that there is equal opportunity for all vendors.
Unless there is a huge demand for your product or skill.
For example, in the early days of the coronavirus pandemic , if you could supply PPE (Personal Protection Equipment) like N95 masks, gowns and you responded to an RFP, you were likely to get a positive response. Because health systems worldwide were in crisis for these supplies.
In normal times though, two words : “Forget it”.
So how does this RFP thing really work? Who uses it? How can you get into serious consideration? Here are some pointers:
Why and Who uses RFP? Any entity that needs to have a paper/documented trail that there was no nepotism or corruption in supplier selection uses RFP. Auditors don’t look kindly when you purchase high value stuff from the cousin of the CEO. But if the company is privately owned with the CEO’s family owning 100% shares- there is no need for a systematic, documented purchase process. Although it’s desirable to keep things transparent for family member owners, to avoid future family conflict.
These entities include Federal and State Governments, Government owned agencies. The oversight process include formal audits, opposition party and media watchdogs all have a job to do. This encourages the purchasing function to follow documented procedures and proper authorizations before contracting to spend organization funds.
The US Federal Government is the largest B2B buyer also B2G (Business to Government) buyer in the world. The US Federal Government’s 2019 spending was $586 Billion as per the US Government Accountability Office.
How do you keep up with relevant RFPs? In the post COVID world you can expect that RFPs will be available online. Once you have a clear idea of your target market defined by company, government agency etc. it is possible to create Google alerts to learn about upcoming opportunities. The US GSA offers useful advice , as do avariety of vendors. Just search for “Open RFP in (name of your product or service) in ( locations that interest you).
Will you get an order the first time when you respond to RFP? The short answer is No.Read on to understand why.
So all the effort of responding to the RFP is a waste? Responding to RFP becomes a lot of work for the team. In old industries like construction there are estimating softwares developed over the years. In new industries like artificial intelligence and biotechnology it can be hard to estimate how much an expert employee will cost.Or even if you would be able to find the employee, once you start searching. After getting the order! And No, the responding to RFPs is not a waste. Because the procurement folks have to read, analyze your bid as part of their job. Your company’s name comes up in documents and discussions with the rest of the Buying Center members. Thus, responding to RFPs build your brand awareness. Frequently, you should be able to get a face-to-face meeting which becomes your pathway to get a trial order and regular orders.
Be prepared for a long sales cycle of several RFP rounds. Many B2B marketers get dejected after their first failed RFP submission to an organization. As explained in the B2B process steps, there is a lot of context to what goes on in organizations. Be prepared for a long haul and follow-up every failed bid. So that your next bid is better. The reason the sales cycle is long, is because the buying center needs to get to know your brand.
Persistence, in dealing with RFP opportunities is the key to long term orders for B2B marketers. And eventual equal opportunity as a supplier!