There are more responses in heaven and earth than are dreamt of in your RFx, to badly paraphrase Hamlet. In an enterprise sale or government bid, you’re likely to run into one or more of the following: request for proposal (RFP), request for quote (RFQ), and request for information (RFI). How your organization responds to these requests has direct implications on your sales process: Improve how you respond, improve how you sell.
What is an RFP?
RFP stands for Request for Proposal.
For the proposal team, this is the be-all, end-all of responses that stirs up everything you can possibly imagine about your organization. Pricing, functionality, technology, security, company basics, competitive differentiators, case studies, references, implementation, SLAs…phew! As the owner of the RFP response process, the proposal manager must ensure that ALL of these questions are tackled.
For the deal that’s already several touchpoints in the making, this response can either help seal it or kill it for the sales team. The importance of the RFP in the overall sales process varies according to industry. But across the board, it’s one of the touchpoints—along with product demo, pricing, and references—that every stakeholder will take into consideration when deciding on vendor selection.
Bottom line? No matter how awesome a response turns out, it alone cannot win the deal. Alas, a subpar response can indeed kill a deal all by itself.
What is an RFQ?
RFQ stands for Request for Quote.
If you receive an RFQ, then one of two things have likely happened. One, your RFP passed muster and you’re a finalist. Or two, there never was an RFP and you’re being approached because yours is a known solution for one reason or another. Either way, details are important in an RFQ. The issuer wants to know exactly what they’re getting at what price.
Lean heavily on subject matter experts (SMEs) to ensure accuracy. In some cases, you may need to complete a table of specific line items and include a cost for each. Your industry dictates your details. The point is that you need to be ready to deliver those details in an RFQ. There’s usually no room for creativity like you might have in an RFP. And remember, anything you commit to in the RFQ will have to be backed up down the line during implementation and support. You’re setting up expectations for the customer experience moving forward, after the hand-off from sales.
What is an RFI?
RFI stands for Request for Information.
There are two schools of thought regarding RFIs. The first school says an RFI is a fishing expedition for organizations who have questions but don’t know who to ask. In this case, RFI responses usually end up forming the basis of an RFP.
The second school says that RFIs are closer to RFQs and are used only with RFP finalists. In this case, the open-ended questions may try to clarify something in your RFP or may give you an opportunity to explain use-cases of how your solution solves specific challenges.
The RFI is usually more casual than the RFQ and will give you room to be creative. In some cases, it can even be your last opportunity to set yourself apart from the competition. End on a high note!
What is the difference between an RFP, RFI, and RFQ?
Obviously, there are many differences, based on the definitions above. But the biggest difference between these three requests is in the content of your response.
- RFQs will be structured; content will likely be technical, financial, and legal.
- RFIs are more casual; content will be more along the lines of solution briefs, case studies, and custom answers to open-ended questions.
- RFPs will be structured and formal, but they’ll also provide opportunities to show off your creativity and competitive differentiation. Content will be in the form of answers to many, many questions. Hopefully you have a response management solution in place to automate and manage content. It makes your life much easier.
Ways RFPs, RFQs, and RFIs help your sales process
Back in the days of paper forms and manual processes, if an RFP was involved, then you could count on a long wait before knowing if you won the deal. That’s not necessarily the case anymore. Digital transformation has introduced three new trends with regards to the RFP as it relates directly to the sales process.
- Deadlines are sooner: Issuers expect vendors to have technology and expertise in place to turnaround RFPs faster than ever. Besides, in some instances, the ability to respond fast may be part of an issuer’s filtering process.
- RFPs are more complex: Lots of reasons for this. More complex problems, competitive industries that have more vendor options, and the ability for issuers to do a lot of research on solution providers prior to launching an RFP (thanks a lot, Internet) are the biggest, in my mind.
- Globally, more organizations and agencies are using them: Actually, there’s a flip side to that idea, too. More solution providers are able to respond to global RFPs. Few of us are limited by borders anymore when it comes to conducting business. If you offer a product or service that the world needs and you can deliver it, then go after the business!
Regardless of your RFP vs RFQ vs RFI predicament, if you work on the following two things, your sales process will be the better for it.
#1 Know your competitive differentiators
There’s a high probability that you will be asked to state your competitive differentiators when responding to an RFP. Here are some examples of how that might look:
- What is the competitive advantage of your solution?
- Describe your competitive position relative to your competitors.
- When comparing yourself to the market, what are the unique selling points?
- Briefly state how you are differentiated from any competitors.
- Why should we work with you instead of one of your competitors?
A generic RFP response to any of these will only benefit your competitors who are able to dazzle the issuer with a great response. Instead of using jargon-y adjectives that everyone else uses, focus on demonstrating the value your solution provides.
Knowing company differentiators is half the battle for many organizations—take the time internally to explore what these are and how to communicate them. Once you have these locked down, make sure the best versions are readily available for your team to grab and tailor appropriately.
“A value proposition offers clients something they want and gives them a good reason to choose you over your competitors. In the executive summary and in your full proposal, communicate a strong value proposition that matches your client’s needs and demonstrates your unique offer.”
– APMP Body of Knowledge
#2 Build and use an Content Library
How do you make sure the best versions of your competitive differentiators are easy for your team to grab and tailor? Make sure they’re in your Content Library, of course. It won’t be long before response management software will no longer be a choice; it’ll be an imperative.
Most RFP-specific technologies include an Content Library component. This is where all the content is stored and organized for use in RFPs or other responses, depending on the flexibility of the solution. Much of the content in these libraries exists as Q&A pairs. For the sales process, using AI functionality from an Content Library improves:
- Repeatability: Build your response process around the foundation of your response management software. It will help establish steps for how you develop a response, access content, and collaborate with writers, editors, and experts time and again.
- Efficiency: Make everything easier and faster—from finding content and assembling documents, to working with collaborators. Teams that do so are often able to increase efficiency by 40%.
- Quality: With much of the time-intensive activities of responding offloaded to AI-enabled software and rock-solid processes, you can spend more time on personalizing responses and generating revenue.
Improve how you respond, improve how you sell
We found that organizations using RFP software submitted 43% more responses in 2020 than those without. We also found that organizations averaged a 45% win rate in 2020. From a sales perspective, that’s a huge opportunity for improvement: submit more responses, win more deals.
To learn more about how response management can benefit your sales processes, schedule a demo today!