If you ask any salesperson about their ideal lead, you’ll likely hear that the perfect prospect is a confirmed buyer with clearly identified needs and pain points.
Hmmm, that sounds an awful lot like companies that issue RFPs.
An RFP, or Request for Proposal, is a document issued by buyers seeking bids for products or services. Every RFP includes a detailed description of the customer’s needs, and unless someone pulls a plug somewhere, the ultimate goal is to buy.
Confirmed buyer ✅
Needs and pain points clearly identified ✅
If that’s not enough to demonstrate the value of RFPs, here are a few statistics:
- The average sales win rate is around 3%
- The average sales-qualified lead (SQL) win rate is 6%
- The average RFP response win rate is 45%
Still, most companies see RFPs as nuisances, which shows in their work. More than half of customers say the RFP responses they receive are sloppy and riddled with grammatical and spelling errors.
So, when did these enormous revenue-generating opportunities become the business equivalent of pop quizzes that no one studied for?
What is an RFP response?
RFPs and proposals are often confused. An RFP is a request from a potential customer that goes to multiple vendors. Depending on the request, an RFP generally asks for a proposal, which includes pricing, product or project details, information about the bidders’ companies, deliverables, and so on.
RFX is the parent category of several types of response request. Some examples include RFQs, or requests for quotes, which means the customer wants to see the pricing and little else.
Another is the RFI, which is a more formal way of collecting information. Often, companies use RFIs to create preferred vendor shortlists and may pair them with RFPs.
An RFP asks for things found in both RFQs (pricing) and RFIs (information). So the RFP is like a combo of the RFQ and the RFI. Many people use RFP as a more general term instead of RFX.
Components of an RFP response
The components of an RFP vary. However, first and foremost, it starts with what the customer wants. The document may ask for the following:
- Answers to the questions asked
- Sample contracts
- Quotes or a cost estimate
RFP response examples
RFP proposals are sales documents, but that doesn’t mean you can send a customer a bunch of sales collateral with a price quote and call it a proposal.
If you’ve ever had a conversation with someone who endlessly talks about themselves, you know how annoying that can be. It’s the same with RFP response. Instead of responding with boilerplate answers about what you can do for the customer, take the effort to learn about them and how you can best partner with them.
And while you’re thinking about your prospect, the response should be organized and readable. You don’t want a customer to have to work to find answers. Instead, they want to be able to easily compare competing proposals from bidders.
Even though it might be more laborious on your part to put the response in the format they request, they’re asking that format for a reason, and not complying could take you out of the running.
The ideal proposal tells a compelling and engaging story for the reader. It’s informative and inclusive of the customer’s needs. A well-written response will stand out, as will a disorganized one that lacks thought and effort.
An RFP response typically should include the following:
- Cover letter – Explain the type of information that is included in the proposal
- Executive summary – Summarize the proposal and why the customer should choose your company
- The response – Answer the RFP’s questions
- Additional information – Include applicable case studies, company history, your recommendations, etc.
- Attachments – Include exhibits, documents, samples, reports, contracts
For more specific examples, read here.
How to respond to a request for proposal
An effective RFP response is never haphazard. Like any project, it should be organized with clear deliverables and stakeholder assignments. Strategic response management software such as RFPIO takes much of the work off the response manager’s shoulders by documenting and clarifying responsibilities and integrating with existing tools such as Salesforce, Slack, and dozens more.
Of course, project management software is a time- and resource-saving tool, but it can’t replace human beings. A systematic and organized response management system should include these human-managed steps:
Step 1 – Determine whether you are the right fit
It might be tempting to respond to every RFP, regardless of whether your company’s solution is the best fit. For example, the prospect may need a product or service only a large enterprise company can provide. In that case, why waste your resources and risk the chance of wasting your prospect’s time?
This isn’t necessarily a hard and fast rule. RFPIO’s CEO and co-founder, Ganesh Shankar, recently spoke with another CEO whose company strategically responded to RFPs they knew they wouldn’t win as a way to get their brand in front of the customer for future needs and to strengthen existing relationships. The keyword here is “strategic.” Perhaps coordinate with your marketing department to determine the best approach to brand awareness.
Step 2 – Set up your process
Your subject matter experts (SMEs) are vital to your RFP response process. However, if you have yet to choose your SMEs before the RFP is in your hand, you will use up time finding the person in your company that holds the answer. Remember that the clock begins ticking the moment you receive the document.
According to many of the RFPIO customers I speak to on a regular basis, timelines are getting shorter and shorter each year. Companies expect faster turnaround times. You should know your process before receiving your RFP.
While RFPs vary, there are certain elements you will almost always see. For example, you will likely see questions about your company’s overview, history, product or service features, and so on. Know who you can rely on to answer your standard questions, or better yet, have the answers to these questions in your Content Library, so your SMEs will only have to review existing information.
Step 3 – Break down the components
In school we were told that “on time is late and early is better.” It’s the same with RFP response. A late response will almost always be discounted, but beyond that, it could sour the customer to your company for future opportunities.
A late response might cause a customer to question whether you value them and wonder whether you can meet your promises if you win the bid.
An RFP may be hundreds or even thousands of pages long. You must have a complete picture of what is requested and how you should approach it. You should first determine your timeline and work backward from there. Assign team roles, responsibilities, and timelines by breaking down the components.
Step 4 – Determine what you’ll need to include
Once you have determined your timeline, it’s time to determine what the customer is asking for.
- How do they want the response to be formatted?
- What questions do they need answered?
- What exhibits or attachments do they need?
- What additional information, such as financial statements or contracts, do they want to see?
How to improve the RFP response process
Workplace processes have never been more advanced. Messaging apps have all but replaced, or at least minimized, the use of email and phones. Customer relationship management (CRM) platforms track customer interactions from initial lead through their entire lifecycle. Project management software turns distributed and siloed workforces into collaborative teams.
Why? Well, automation works.
- 89% of companies report that their businesses grew last year, thanks to automation.
- 92% say that automation frees employees to focus on more critical and complex tasks.
- About one-third of businesses report achieving a 100% or more ROI in the very first year after investing in automation.
Unfortunately, companies still need to prioritize automating their response processes.
- 84% of companies use inefficient RFP processes.
- 44% of proposal managers use no response software.
That’s not to say software is required for an efficient response process, but it certainly helps–a lot. Nor does RFP software replace jobs; it simply enables employees to focus on generating revenue.
Automate manual tasks
As I said, RFP software isn’t out to steal anyone’s job, but you know those annoying manual tasks like chasing people down for their deliverables or trying to keep track of which documents and question and answer pairs need reviewing? Automation takes care of that for you.
If you are a response manager or oversee a response department, you have a lot of control over what’s automated and what’s not. In a moment, we’ll discuss the sorts of tasks you might consider automating. But first, what are the goals of an efficient response process?
The goals of an efficient process include the following:
- Automating manual tasks
- Keeping content up to date and accurate
- Optimizing time management
To reach those efficiency goals, consider automating:
- Processes involving multiple stakeholders
- Time-consuming tasks that don’t add value
- Anything that might help with compliance
- Anything you feel you are reinventing each time
- Tools and templates
- Answers to frequently asked questions
Let’s drill down a bit and talk about one of my favorite features of advanced response automation, the Content Library.
Depending on how long your company has been in business and how often you audit your content, you could have hundreds of thousands or more records–many, if not most, of which are never used.
I get it. Reviewing content isn’t much fun. Fortunately, as with your home, once you do that deep clean most of the rest is just maintenance.
So, where do you start? A regular review of content. My colleague and friend Monica Patterson recently published a super informative blog post on this topic, but in a nutshell:
- Review the content you use the most – This step is relatively easy because most used content is generally up to date. However, you still want to run it by your SMEs, including every regularly reviewed Q&A pair, document, attachment, or exhibit.
- Review the content you don’t use — Don’t automatically archive never used content. First, ensure it’s no longer relevant and doesn’t have customer-specific or periodic use.
- Schedule regular maintenance reviews – Establish a regular cadence of looking at content, so you don’t have things that are so out of date that you have to find a new answer.
Having the cadence that works best for your subject matter experts is essential, which means having a relationship with your SMEs to establish a mutually agreed-upon time. If not, it will cause them more work in the future.
Optimize time management
When you receive a massive RFP, it’s intimidating unless you optimize your time management plan in advance. RFP response time management tactics include:
- Understanding the scope and timeline of the project
- Determining who to ask for clarifications
- Defining roles within your team and engaging SMEs
- Repurposing and reusing content where applicable
- Tracking and monitoring deliverables and time spent
Response teams and sales teams have a whole lot in common. Every employee in your company should have the same goal: to make the company more profitable.
But for revenue-generating departments, such as sales and RFX response, it’s all about winning business. Unfortunately, in many companies, the two departments are siloed. When responding to an RFP, it becomes even more challenging when the response team is siloed from the SMEs they need to consult.
While collaboration is possible using email and communication tools, response project management is hardly their forte. Response software that contains collaboration tools allows response managers to track and review progress and content across multiple channels, ensuring accurate and timely responses.
Key performance indicators for the RFP process
Boards of directors, C-suites, and everyone else in leadership positions want to see quantifiable results. As for the RFP response process, they want to see:
- The types of projects you work on
- Time and resources spent
- Time to completion
- On-time and late submissions
- Win rate
Some KPIs don’t boil down to just numbers. To best measure the efficiency of your process, survey your team and implement a project post-mortem to identify areas where you can make improvements.
How to choose RFP response software
Before choosing software, take time to understand your process. If you don’t understand what you need, even the most advanced tool will not fulfill every requirement, and you could choose the wrong vendor. Look for agile, scalable software that seamlessly integrates with your existing sales enablement and communication tools.
Make sure that the software company is flexible, listens to customer feedback, and does things with it.
Why you need RFP software
A shared Google or Word document doesn’t exactly lend itself to group collaboration. First, the document could have many pages, and a multiparty editing process is sloppy and difficult to track at best.
In a siloed, distributed workforce, RFP software is a single place to go—a single source of truth. It enables you to gather answers to questions, exhibits, and documents. The software is a place where everyone sees the one correct answer. It’s also a place where everyone can work together without causing the RFP coordinator to pull their hair out.
An advanced RFP response platform is a partner. It shares your goal of quantifiable and qualifiable results with the resources and bandwidth to manage multiple users and projects. Look for several features, including:
- A content management system that serves as a single repository for all company knowledge and documents
- End-to-end project management, including in-depth tracking capability/activity log
- Response recommendation engine
- Customizable analytics
- Tech stack integrations
- Ability to import different formats
- Ability to customize parameters
RFPIO is your partner in proposal management. To accomplish what RFPIO does would require a full-time assistant 100% of the time, and that’s for just one RFP. Teams rarely have just one.
Building response functionality onto sales enablement software would be very expensive and include features you probably won’t use. You want software for response teams and response management. RFPIO offers:
- A best-in-class Content Library – A single company repository for Q&A pairs, company knowledge, documents, exhibits, and other attachments.
- Advanced project management – Built-in analytics, advanced in-app collaboration tools, project tracking, role assignment, and clarification.
- AI-powered Recommendation Engine– RFPIO leverages machine learning to recommend answers.
- Integrations – RFPIO seamlessly integrates with more than two dozen of the most popular business applications, including Salesforce, Slack, Microsoft Office, Hubspot, and more.
- Scalability – RFPIO’s unique project-based pricing model fosters collaboration by providing access to unlimited stakeholders on each response. The system grows with your needs and scales back during slower times.
- Ability to import different formats – With RFPIO, you can import from Word, Excel, other documents, and even PDFs.
- Customizable parameters – Track project metrics in a way that makes sense to you, including by vertical, company size, product line, project type, project stage, number of questions, project value, and so on.
Common challenges of the RFP response process
RFP response involves a lot of moving pieces. RFP response is a collaborative process that requires input from multiple and diverse experts across the organization. Yet, more than half of companies work in silos.
Additionally, not every company has dedicated SMEs, so you could be fighting competing priorities. And then there’s the good old problem of time. Timelines are getting shorter. Things pop up–like PTO, life in general, and, unfortunately, pandemics.
You should also set aside time to update the content library; otherwise, you’ll spend more time in the RFP process, as it’s faster to validate content is accurate than to track down the SME and have them update content you know isn’t up-to-date.
Then, of course, departments compete for their part of the annual budget, and sadly, some companies don’t want to, or can’t, invest in software for small teams, even though response teams pack powerful revenue-generating punches.
In my dealings, I’ve found that RFPIO is mission-critical software, but the proof is in the pudding. Celtra, a creative management platform organization, had a broken RFP response process. Their content was siloed, and workflow and collaboration needed optimization.
The result was rushed responses and a poor success rate. After researching the response management industry, they chose to work with RFPIO. They found:
- They value the support and educational content, especially around best practices.
- They appreciate the industry-leading integrations and clean user interface.
- Now they’re responding to twice as many RFPs in less than one-fourth the time with fewer than half the people.
If you have questions about RFPIO or the general response process, you can contact us anytime. Here are some of our most frequently asked questions:
- What is an RFP? – Organizations issue requests for proposals (RFPs) to enlist bids for specific products or services from multiple vendors.
- What is included in an RFP? – RFPs are highly detailed and contain in-depth project descriptions, background information, specific requirements, deadlines, and so on.
- Why do organizations issue RFPs? – Organizations issue RFPs to obtain detailed bids to compare and contrast before purchasing.
- Who responds to an RFP? – Responding to RFPs requires input from multiple stakeholders throughout an organization. Many organizations have dedicated response teams, while in others, sales teams steer the process.
- How does RFP software help the process? – Advanced RFP software helps ensure quality and on-time response with time management capabilities, collaborative tools, tech stack integration, scalability, a flexible pricing structure, and a robust content library.
- Does RFPIO work with our existing processes? – RFPIO seamlessly integrates with the most popular business applications, and our import/export capabilities ensure that both response teams and customers receive the format that works best for them.
- Do we need to purchase multiple licenses? – RFPIO has a pricing structure that is rare among SaaS companies. Instead of a fixed number of licenses, RFPIO charges by active concurrent project, enabling access to unlimited users.
- How secure is RFPIO? – I could bore you listing our security certifications and protocols, but let’s just say that our platform is secure enough for Google, Microsoft, Facebook, Adobe, and VISA.
Optimize your RFP responses the RFPIO way
Learn more about how your company can break down silos, effectively and efficiently manage time, and create a single source of truth in a platform that scales to your specific requirements without burdening your tech stack.