Page 303 - Writing Winning Business Proposals

294 Appendix G

of Health, the National Science Foundation, or the National Endowment for the
Humanities won’t be much help to you if you are a consultant who wants to know
how to respond to an RFP from a prospective client. Books and articles that focus
on specific kinds of RFPs in specific situations tend to overemphasize the impor-
tance of RFPs. The author of one of those books believes that by simply receiving
an RFP, a firm is so advantaged that it should ask, why wouldn’t we devote the
necessary resources to respond?
Well, for many reasons, not the least of which is that selling consulting work via
RFPs is a relatively low-value, high-risk exercise. As an example, consider these
two scenarios, in both of which you are a consultant. In Scenario 1, you build a
trusted relationship with a senior-level potential client, working closely for weeks
if not months with the prospect’s team to develop custom-made objectives and
methods for addressing one of the firm’s agreed-to problems or opportunities. At
the same time, you are creating barriers to entry for other consultancies, many of
whom are unaware of this particular sales process in the first place. The eventual
proposed engagement has a price tag of more than US$1M. If you win (and your
hit rate in such situations is greater than 70 percent), you can expect consider-
able follow-on work because your pricing strategy builds in “face time” during
the engagement to deepen your relationships, allowing you to uncover additional
opportunities, perhaps none of which will require competitive bidding.
In Scenario 2, your consultancy receives on Monday an RFP “over the transom.”
Not until Wednesday does that document get to you, the subject-matter expert who
can address the objectives indicated in the RFP. Not until Friday can you assemble
a team whose responsibility is to respond. Because the proposal is due the follow-
ing Monday, your team writes it over the weekend and delivers it without a single
conversation having taken place between you and the potential client. You are one of
15 bidders. The RFP was written by the incumbent, who tailored the requirements
to the incumbent’s strengths. You and 13 other bidders are column fodder. That is,
on the prospect’s evaluation sheet, the incumbent is listed in column one; every one
else owes their existence to due diligence or legal requirements. Those consultancies
in the other columns have little chance of winning. The engagement will be a “one
off” with little likelihood of follow-on work. All the consultant-selection team are
middle managers, and there will be no opportunity to sell upward, either during the
current engagement or during subsequent ones, should they even exist. Given the
relatively low-level scope of the work, your bid will be less than US$60K, and given
the large number of competitors, your hit rate in such situations is at best less than
25 percent.
Of course, these are extreme scenarios, but they are not unlikely ones: They
happen all the time, and I hope you’ve had considerable experience with the first
one. Nevertheless, there are many reasons for responding to an RFP. First, busi-
ness might be in a lull, and you have many people on the beach (i.e., unengaged)