What Is An RFP: Your Key To Understanding What They Can Do For You

If you would buy it, buy it well
With equal skill to those who sell

Simple steps and careful measure
Save your time and guard your treasure

 

When you read “RFP”… how do you feel?

A. Angry

B. Bewildered

C. Confused

D. Daunted

E. Excited

F. None of the above

(Remember, your first instinct is probably correct.)

 

Playing the percentages, here’s how the answers break out.

A & B (angry, bewildered) are for sellers who respond to RFPs. It’s a ton of work to write proposals, and the process seems unduly one-sided if not plainly unfair. Some companies resist responding to RFPs or try to avoid it completely… though for many it seems as certain as death or taxes.

C & D (confused, daunted) are for buyers who see some benefit in using RFPs, but struggle with the effort required to create the documents and administer the process. They’re often unsure which purchases require an RFP, or how rigorous the follow up needs to be.

The emotions are valid, and they can be strong. Throughout this series we’ll explore common abuses, objections, pitfalls and problems of the RFP.

 

But first, here’s a word on behalf of the RFP (from a guy who answers E.)

For buyers, a good RFP can be a highly-efficient way to find the world’s best solutions to the major obstacles between you and your goals… AND ensure great pricing along the way. This is true for major purchases and often for smaller needs as well.

For sellers, the RFP remains the dominant way that large customers make high-dollar purchases. If you’re selling to governments, the Fortune 500, or even the Inc. 5,000, the RFP is likely to be part of your reality, and accepting it will give you access to opportunities you wouldn’t have otherwise.

So it’s worth understanding RFPs, and this series will aim to answer every question you might have about them.

 

We’ll start with the basics: What is an RFP?

 

RFP stands for “Request for Proposal.” The term almost always implies:

  1. A substantial purchase (the size can vary)
  2. A written document
  3. Multiple vendors
  4. Written responses from the vendors (i.e., the proposal itself)

 

Our main focus in this series will be the traditional RFP used by organizations to buy. But we’ll also use the term as shorthand for a structured buying process, which can apply to any significant purchase, personal or professional. Consider these examples:

  1. Getting three estimates for landscaping your front yard.
  2. Inviting major advertising agencies to compete for a multi-million dollar annual budget.
  3. Requesting menus and pricing for a party from a caterer.
  4. Asking two accountants how they would handle a business reporting need, and how much it would cost.

 

The context and the depth may be quite different, but the PROCESS for those purchases and many others will be virtually the same.

A simple structure can help you buy better and get the most value, at home and at work. We’ll explore this and answer every question about RFPs in this series so you can make them work for you.

 

The NEXT QUESTION: When do you use an RFP versus an RFQ versus an RFI? You can find a great article here on our site that will help you tell the difference between an RFP and an RFQ.

Here is another great article that can help you when creating an RFP: How To Organize An RFP – A Template Overview

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