The Request for Proposal (RFP) continues to get a bad rap.
Perhaps this comes as no surprise.
Especially because RFPs typically require agencies to put in considerable time and effort, with an uncertain outcome.
And we often perceive the process as a fishing expedition or rigged if we don’t win the project.
Gini Dietrich’s recent article, Scale Your Agency Without Proposals or RFPs, eloquently maps out an RFP-less growth strategy.
As an agency and startup founder, I’ve been on the RFP goose chase and came up with a lot of goose eggs.
At one time or another, we’ve all spent hours completing RFPs only to see someone else win the project.
I know first-hand that it’s easy to see the process as a waste of time.
So should agencies stop responding to RFPs?
My answer is, not so fast! Don’t throw out the baby with the bath water.
However, the RFP process does need to be more efficient. And, agencies need to be confident they are competing on a level playing field.
Those out-of-the-box approaches to generating new business revenue, along with strategies to build referrals, may well belong at the core of an agency’s new business process.
You might argue they should supplement these with a clear-eyed and strategic pursuit of RFPs which are a strong fit for an agency’s capabilities.
Why Should Agencies Participate in RFPs?
To put it simply, there is business to win.
The PR Council reports that more than one-third of all agency business is still won through the RFP process.
Even if your agency is small or mid-size, RFPs can be an efficient and important method for winning client business.
Well-crafted responses from qualified agencies are a path to winning new business and gaining growth.
A Strategic Approach to RFPs
Generating a return on investment (ROI) with RFPs requires agencies to be selective when it comes to participation.
If you have the urge to dive into public RFPs or submit a proposal on spec when you haven’t been asked – don’t.
If you are not asked to the party or do not know the host, this is the surest way to guarantee no ROI.
From an agency perspective, here are six key questions to consider when making this decision (and for companies to bear in mind when issuing RFPs):
- Are we asked to participate with intent? Has the company done research on your agency to understand your capabilities before asking for a proposal?
- Are we qualified for the business? In the chase to win business, it can be tempting to pitch any opportunity that presents itself, especially when you need the revenue.To increase your hit rate, here’s a simple mantra: Only pitch business for which you are qualified, or qualify yourself for. the business you pitch. The bar for winning is high.
- Do I have the information I need to make an informed decision about participating? Information shared by the client must include the scope of work, budget, measure of success, and selection process. Ask for this information if it’s not there. Consider it a red flag.
- How much time will the RFP process take and what’s the payoff? It’s important to review not only what they’re asking for, but the effort it requires to respond and the timeline for a decision against potential return, in terms of budget. If the RFP is too complex and the decision process vague, unless there’s a compelling reason to participate, the ROI may simply not be there.
- How much do I have to share, just to get to the table? There’s nothing worse then spending valuable time and resources creating detailed proposals or presentations and not getting to present them. An RFP should have enough detail so you can describe how you plan to tackle a project. And allow you to provide relatable case studies and highlight your area of expertise, but still respect your time.
- Is the process fair and transparent? The RFP process should include the ability to ask questions of the client. Top of the list: Why are they looking for an agency? Is there an incumbent agency? Knowing more about the reasons for the search, beyond what the RFP requires, is key to having the confidence to engage.
Improving the RFP Process
It is important to acknowledge that, all too often, the RFP process is overly complex and burdensome for agencies. And, frankly, even for the companies that want to use them to select agencies.
To encourage agencies to participate, the process needs to be simpler and easier to manage for both parties.
And, clients should proceed quickly and efficiently to the selection of finalist agencies for presentations – ultimately the purpose of the RFP.
At the very least, it’s one solution to the challenge of streamlining the RFP process.
Why Not Just Give Up on RFPs?
I have worn both corporate communications and agency leadership hats. There are incredibly talented agencies and people who are a great fit and capable professionals.
In an increasingly specialized communications landscape, effective agency search processes and RFP tools can help clients find agencies and consultants with the expertise they need, wherever they are.
This offers new opportunities for communicators.
By making it easier for companies to find and engage agencies, there’s potential to grow the overall communications pie.
New ways of thinking about scaling agencies and strategies that focus on referrals are clearly not the only path to new business.
A more efficient process and strategic approach to RFPs are key to generating a higher ROI from these opportunities.
That’s why we haven’t given up on the RFP. Instead, we’re focusing on making them more productive for clients and agencies.