The question is especially common for smaller organizations, which must make hard decisions on how to allocate precious — and very limited — resources to the RFP process. Larger organizations often have whole dedicated RFP/RFI departments. So the focus of this article is the individual or small vendor.
The technical answer of course is — it depends. Depends on your organization, the RFP requirements, the risk of getting vs. not getting the RFP award, the size of the RFP, and many other factors. For many organizations, it’s really challenging to make a simple and clear decision.
Over the years, I’ve worked with literally hundreds of RFPs — from both sides of the table. I’ve created them with and for companies, responded to them as part of our own company, combined forces with other small companies to respond to really big RFPs, been the person doing the actual work in a successfully won RFP, and all points in between. This article shares a few points and “lessons learned” along the way. May you find them useful when planning your next RFP response.
There are many different definitions out there, but I like to keep it simple:
RFP — Request For Proposal. Company A (or government/organization/non-profit, etc.) has something it needs done. The need may be any type of work or project, from building a building, to creating software or moving a data center. Company A collects its requirements and “nice to have” items into a big formal documented and sends it out for bid.
There are numerous posting services for bids, or, Company A may directly invite particular companies to bid. Typically, the company creating the RFP knows what it wants, but may not know how or in what ways the work will be done. The RFP will request guidance, and suggested plans for how the responding vendor will solve the problem or do the work.
Companies interested in bidding or making proposals on the RFP, will submit an RFP Response. Note, the RFP itself can be a very large document, requiring 20 − 100+ pages in response. The bigger the project (and money involved), the bigger the time investment.
RFI — Request For Information. Company A contacts Company B and asks for information about its work history, existing clients, ability do a particular project, etc. Typically, the RFI is designed to learn more about particular vendors, and help the RFI creator decide if a vendor can actually do the work. An RFI can be as simple and informal as an email inquiry, or a more formal document. An RFI requires a much smaller time commitment than an RFP and may just be a simple research request.
NOTE: There is a variation called “RFQ” or “Request For Quote.” The RFQ can occur after a RFP, RFI, or as a completely separate process. For example, if you are shopping a particular kind of car and call 3 dealers asking for their best price on the car, you are placing a “Request For Quote”.
I refer to the RFI as “tire kicking”. Companies submitting an RFI are often just price shopping, or doing general vendor research. Nothing wrong with that approach — we all do that — but don’t spend too much responding to general RFI inquiries. If you have a good reputation and relevant information to share, then pass it on and suggest a formal consultation.
If the RFI requestor is serious, he’ll be back in touch with a real project and real money behind it.
On the other hand, there is another school of thought which says to be overly helpful, and shower all inbound questions and answers with hours of “overhelping”. The idea is that “overhelping” will make the RFI requestor strongly biased in favor of your company.
The reality is that many RFI requestors are hamstrung by limitations. Budget limitations, committee limitations, rigid vendor selection criteria, rigid procurement and payment criteria, whether or not the RFI vendor is on the “approved vendor list”, etc., etc. Also, most “tire kickers” don’t have the direct purchasing authority to write a check to your company. And, often the tire kicker doesn’t even represent an actual, fully-funded project. She may just be trying to decide if she’ll do a project at all.
When a company submits an RFI, I recommend insisting on scheduling a high-value, complimentary consultation. If the RFI requesting company is really serious about an actually funded project, they should be serious enough to engage with you on a consultative basis. The consultation may be complimentary (this is our company’s approach), include 1/2 to 1 hour with all key decision makers, and deliver actionable information. (That is, if it’s a company you would want to work with.) That way, even if the company doesn’t hire you, you can often get a referral or recommendation that will help you win other projects.
The answer is different for products and services. Here is one suggested approach for each:
RFI and RFQ decisions are generally pretty quick (or should be). For RFP responses, consider all the facts, get “under the covers” to find the real RFP information, then decide.
Yes, RFP responses can be difficult and time consuming, but the payoff can be HUGE! Nothing really worthwhile is easy. But deciding whether to respond requires careful consideration. There is significant cost to doing — and NOT doing an RFP response.
Need help deciding? Or, have you already decided and are ready to create a winning proposal? Contact me to get it done. Want more information first? Check out out the RFP Services section on my consulting page.
To your RFP bidding success!
NEW Training! – Sign up for my FREE 6 Weeks to 6 Clients Master Class
High Performance Elixir Recipes
Don’t hate on the ‘selling’ — embrace it! Here’s how…
When opportunity comes knocking (how to answer the door!)
Can’t-Miss Job and Client Interview Strategies – Your Definitive Guide
Knowing Where You Are + Doing What Works + BIG Announcement