Then there’s Death by RFP, which is no treat for anyone. Admittedly, RFPs satisfy more “nutritional needs” than our analogy suggests — still, a diet of nothing but RFPs probably isn’t the healthiest way to do business.
As Mike Brewster points out in the March 2005 issue of Inc. Magazine, the RFP, or Request for Proposal, has “long been used by government agencies,” but “in today’s era of strict corporate governance standards, RFPs are being issued more frequently for private-sector contracts, as well.” Similarly, Brewster adds, “internal control guidelines set by the Sarbanes-Oxley Act…have put the kibosh on single-source, relationship-based purchasing contracts.”
This shift is certainly evident in the advertising and marketing industry. In the past, “relationship-based purchasing” was a desired goal for many vendors and clients, and individual projects were often seen as opportunities to start such relationships. If a project succeeded, and the fit was good, additional work would follow. Over time, trust, loyalty and familiarity would blossom into a long-term, symbiotic business relationship. But in recent years, there has been an undeniable paradigm shift: relationships no longer drive purchasing decisions; for projects large and small, companies rely on RFPs.
In the best-case scenario, the RFP process can bring together compatible service providers and clients who might never have met in the past. And finding a “perfect fit” does justify the time and effort typically expended by both RFP issuers and responders.
But that’s the best-case scenario. Less appealing scenarios are all-too-common. Some RFP processes muddy the waters rather than helping decision-makers distinguish one agency from another. Worse, a flawed RFP process may lead to a decision that is later regretted. For service providers, RFPs often present a frustrating paradox: the form is time-consuming and complex, yet the content it generates seems oversimplified or misleading. It is disheartening, to say the least, to pour valuable resources into an RFP response and still feel that the RFP issuer doesn’t really know your agency.
Mountains of work layered with unsatisfactory results for all involved: that’s Death by RFP.
How can we avoid this unproductive state of affairs? First and foremost, we need to remember that RFPs are a means, not an end. The real goal — for both companies and agencies — is to share information so that a company can find the best agency to meet its needs. The RFP process is one way to share information — but when it starts to become the only way, we’re really asking too much from it.
Companies get the best results when they employ RFPs toward the end of a larger search process. The opposite approach — issuing a blanket RFP to dozens of agencies without prior qualifying — is usually a recipe for failure. A blanket RFP may feel like an all-in-one shortcut when you send it out — but it reveals itself to be a long and winding road after several hundred pages of responses pile up on your desk. Another drawback to blanket RFPs: many of the best-qualified agencies no longer respond to them. Agencies are glad to compete for a project with a select group of peers, but blanket RFPs can feel more like a game of roulette than an honest competition.
Information-sharing outside the RFP process is also crucial because RFP responses alone seldom offer an apples-to-apples comparison. Yes, asking everyone to answer the same questions in the same format will make responses look alike, but that can be misleading. The RFP process also tends to miss important, but intangible, distinctions between agencies while over-emphasizing more easily quantifiable criteria. Bottom line: if you don’t get to know agencies beyond their RFP responses, you may pass right over the best candidate — or select an agency that turns out to be better at manipulating RFP responses than they are at servicing their clients.
According to David Baker, owner of ReCourses, Inc., a management consulting firm that has worked with hundreds of service providers in the communications industry, and Blair Enns, owner of sales consulting firm Enmark Performance Development, and co-author of the book Win Without Pitching, an effective vendor selection process begins with background research to qualify prospective agencies. This “due diligence” may include everything from peer recommendations and agency Web site reviews to a formal, but simple, RFI, or Request for Information. It is also reasonable at this point to ask agencies for capabilities materials, relevant case studies and references. Baker and Enns also note that an agency could be asked to offer a money-back guarantee and/or a phased sale with “opt-out” points as a sign of their confidence in handling the project. However, they add that no firm should be expected to “give away their thinking” before an engagement is formalized — indeed, companies should be wary of an agency whose only distinction is that they offer solutions before you’ve hired them. That, like radically undercutting competitors, is often a sign of financial instability or other serious problems.
Engaging in the steps above should make it much easier to narrow the field to a few, well-qualified candidates. In-person meetings with agencies on your “short list” will help you gauge key intangibles, such as compatible culture, rapport, and personal comfort. Then, if further investigation is needed, an RFP may be the right tool. At this point, you should be looking at only two or three firms and you should know enough about each of them to be able to fairly compare their RFP responses.
As for the RFP itself, a few basic tips can ensure that the responses you receive clarify rather than confuse your decision. First, make the language of the RFP as clear and specific as possible. Second, use the 3 Rs to evaluate each section of the RFP — and the RFP as a whole. Is it realistic? Is it reasonable? And is it relevant? Before issuing the RFP to agencies, ask at least two knowledgable individuals to read it and offer feedback. After you’ve sent the RFP out, make yourself available to answer questions and do so in a timely manner. Finally, gather all key decision-makers together for a day of presentation reviews and make a final decision that day — this helps ensure that decision-makers are all on the same page, and it also shows the agencies involved that you are serious about moving forward.
RFP or no RFP, it’s important to remember that most of us want the same thing: a fair, competitive selection process that matches the right service provider with the right company. Conversely, when over-reliance on the RFP process creates unnecessary burdens or confusion, it usually does so for both issuers and responders. In short, it is in everyone’s best interests to share information as openly and effectively as possible and maintain a healthy business environment where “use of RFP” does not inevitably mean Death by RFP.
