Independent Thinking Blog

The Problem with RFPs


Does your business rely on Requests for Proposals (RFPs)?

Law practices, management firms, PR agencies, and other big consulting-based businesses rely a lot on getting and winning work this way. It’s a numbers game. Respond a lot. Win some. Lose some.

There are a couple challenges with this approach:

  • It’s time-consuming and expensive to execute.
  • You’re (primarily) competing on price.

Now, I’m not suggesting that price trumps smarts. It’s just that all the people who are invited to submit bids are typically prequalified to do so.

Anyone see the problem?

Your qualifications matter, but you don’t.

RFPs can be lucrative, but an RFP-based strategy discounts the relationships that are at the heart of much of business. Strip out the value-add, and you’re going to be squeezed to beat out your competition by being the cheapest option.

At an event recently, someone remarked to me that while she used to attend a lot of networking events she no longer invests the time because her company has an RFP culture.

Yep, that’s a problem.

You don’t want an RFP culture.

As you can probably tell, I don’t rely on RFPs. My business will occasionally submit a proposal in response to an RFP. Usually it happens either because there’s a preexisting relationship or because I’ve calculated that the team expertise is right on point. Guess which of these I tend to win?

Photo by haley (Flickr).

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