I have already written about how unhealthy the Request for Proposal process is. It doesn’t work well for the company making the purchase, and it sure doesn’t work well for the company that is selling. Yet we both continue along as if everything is fine. It isn’t; it’s broken.
Here is how to fix it.
What Purchasing and Buyers Should Do:
Stop Treating Service Providers Like a Commodity: When you treat the companies you are buying from like they are commodities, they behave like commodities. When you make price the focus of the competition, you eliminate the profits necessary to generating the best results possible. By treating a company who doesn’t compete on price like they compete on price, you ensure that they can’t deliver, and later you will fire them for this offense.
Stop Buying on Price: Buying on price ensures that you get the very best deal for your company, provided what you need is a commodity. If what you are buying is subject to different results based on how different companies approach the problem, then you need to shift from price to cost. True, the salesperson should know how to demonstrate that; you need to be more open to selling it within your organization when it is right.
Don’t Do Discovery Alone: You don’t really know what you need. By doing discovery alone, you eliminate the outside views that might help you to frame both your problems and your solutions another way. A fresh set of eyes, or a set of eyes informed by working on similar problems with lots of companies, will improve what you ultimately decide you want. Sending the list of must have’s isn’t enough to get you the best result possible; most of the time, it doesn’t get you a much better result.
Remember: Everybody Looks Good at the Starting Line: Every company that steps into your boardroom to present will look good. Some of the worst performing companies you can choose will impress the living Hell out of you in the boardroom. The sales organizations performance in the boardroom tells you nothing about how they will perform for you or whether you have a cultural alignment.
Don’t Do Discovery Alone II: If adding what you believe would solve your problems and cure your dissatisfaction to a list were enough, you would have already solved the problem, which brings us to . . .
Buy From People With Whom You Have Relationships: If you want the best results, take the time to develop relationships with the people who provide the services you buy. I don’t mean let them show up to the boardroom table armed with a PowerPoint slide deck that speaks to your RFP. Spend time helping them understand your business. Let them speak with your people, and make sure they a get a real view of the constraints and the opportunities. Encourage lots of meetings, on and offsite.
The best results will be obtained by building these relationships. There is no shortcut that produces the same result. I tell salespeople that they must build the relationships that they need before they ever compete for an opportunity; you also have to develop the relationships you need before you get the partner you want—and the results that you need.
What Salespeople Should Do:
Stop Pretending RFPs Are Opportunities and Ask for What You Need: Pretending that RFPs are really an opportunity is delusional. Your sales process has to require more of you than you being at the office when the mail is delivered. If you are going to respond, throw down the gauntlet and ask for what you need to do good work. You need access. You need information. You need relationships. Ask for these things. You will lose some opportunities for doing so, but you were more than likely going to lose those opportunities anyway.
Start Developing Meaningful Relationships Now: If you aren’t calling your dream clients before an RFP is every a possibility, you don’t deserve to win their business. Waiting to call on the clients you know that you should be serving is your primary mission. You need the relationship to win, but more still you need the relationships to develop your understanding and to know how to create value when the opportunity does arrive. When the RFP hits your desk, it should be old news, and you should be able to respond with a rock star response that includes business intelligence that could only have come from your deep relationships.
The process doesn’t have to be broken. Together, we can fix it.
For Buyers: What would make this buying process more effective in getting you the outcomes you need, while allowing salespeople to do a better job at works to create better results after the buying process has ended?
For Sellers: Is it possible to allow the buying process to continue this way and still create as great of results as are possible with a better buying process?