Daily Archives: October 12, 2015

8 Reasons Best-in-Class Suppliers are Ignoring Your RFP

Today’s guest post is from Brian Seipel, a marking project expert at Source One focussed on helping corporations achieve both marketing and procurement objectives in their strategic sourcing projects.

Imagine you’ve spent hours crafting an RFP defining exactly what you need and finding the right mix of suppliers best able to provide a solution. Despite your efforts, top suppliers are either unresponsive out of the gate or go dark early in the initiative. Suddenly, your supplier pool is shrinking, and key players in the market have thrown in the towel before your RFP even got off the ground. Why is this, and what can we do to ensure sourcing events bring in the best possible candidates?

Failure to Launch

It’s easy to look at an RFP as a way for suppliers to “wow” you, but keep in mind that an RFP is a two way street — You need to “wow” them as well. Your RFP is your first shot at communicating your needs to potential suppliers. As such, the goal of your RFP should always be to attract the best possible suppliers and quickly establish why they should participate.

As soon as your RFP lands on their doorstep, you can bet suppliers are vetting you just as hard as you vetted them. They have a short list of red flags to determine whether they are a go or no-go — if your RFP trips too many, you can bet these suppliers will go dark, even if they are a perfect match. Knowing what these red flags are will help you craft an RFP that draws them in and ensures participation.

Before Distributing the RFP

Prior to reviewing the RFP itself, let’s discuss your potential supplier pool. Two red flags will ground your RFP immediately if not addressed before would-be participants see it.

  • Lack of proper fit.
    How sure are you that the suppliers receiving your RFP really are a good fit for all your requirements? Discovering supplier fit all but a few critical needs late in the game will be a huge time waster, so consider arranging a quick conference call with any suppliers you haven’t worked with before as a measure-twice-cut-once vetting process. Not only will you identify partial or all out bad fits, you’ll be able to establish a level of rapport early on.
  • Lack of a relationship.
    Speaking of rapport, participants know they are likely to run up against incumbent suppliers during the initiative. If you don’t begin building a relationship with them quickly, they may feel they are only being brought in to help you build a case to beat the incumbent down on price. A little glad-handing goes a long way: while you’re reaching out to participants to ensure they are truly a good fit, spend time describing why they were included in the RFP, and get them excited about the opportunity.

Hidden Landmines Within Your RFP

Now that suppliers are fully vetted and raring to go, take a step back and consider what red flags are sitting in your RFP documents.

  • Too much boilerplate language.
    Any supplier who has been in business for even a short time can spot boilerplate language — it isn’t hard to pick out. Boilerplate language creates the appearance of slapdash work, and suppliers won’t want to spend resources crating a thought out into a response when they don’t think as much thought went into developing it in the first place. Unless the boilerplate is needed to fulfill certain legal needs, strip it away.
  • Lack of clarity.
    New suppliers don’t know you, your needs, or what it will take to win your business — and they will bolt if they don’t get this information quickly. Your RFP should be clearly written and organized in such a way to fill in all three of these blanks in short order. At a minimum, include an elevator pitch about your organization, and follow with the reasons behind this RFP and what you hope to accomplish before leading into the scope of work. Lay out the initiative’s key milestone dates, and the deliverables required for each.
  • Poorly defined scope of work.
    It is all too easy to gloss over fine details when building out a scope of work. Stakeholders who are intimately familiar with the initiative from the inside may not consider an outsider’s (very limited) point of view when constructing this section. Nothing sends suppliers running faster than a weak scope, which gives the impression of a poorly defined project requiring too much of a time investment in gathering enough information to participate.
  • No opportunities for communication.
    Even the clearest RFP and most detailed scope of work only tells half the story. Open communication is needed to flesh out requirements and delve deep into the underpinnings of a winning proposal. Are you building time for Q&A sessions into your initiative, and clearly spelling out your availability to participants? If suppliers get the sense that they can’t engage you, they won’t risk spending time drafting a proposal only to learn later on that they missed the mark entirely.
  • Needlessly extensive questionnaire or requirements.
    The longer your questionnaire, the more time and resources suppliers will have to spend responding. Include too many, and you may make responding too difficult. Is each question strictly required to determine if a supplier can meet your needs? Cut out any superfluous questions with extreme prejudice.
  • Requests for financial information.
    The first requirement on the chopping block should be the need for one, two, or even three years of financial information if you don’t actually intend on examining them. Private companies often balk at this requirement, and RFP issuers often subsequently drop it after they decide they don’t truly need them. There are other ways to ensure financial stability, such as Dun & Bradstreet checks and reference checks. So ask yourself, do you need all those years of financial information? Now ask again, do you really need them?

Strategic Sourcing is a Two Way Street

Remember that an RFP is a two way street. Just as suppliers are trying to win your business, you need to ensure they see the value in doing so. Clearing away the red flags above is the first step in meeting that goal.

Thanks, Brian.