Government agencies and most large companies require RFPs for all large purchases. But for all others, an informal proposal can avoid the time, effort and expense of developing an RFP and managing the evaluation and decision process.
Factors favouring an informal proposal include:
- Existing relationship: Current clients are more likely to waive the need for a formal RFP—especially if they are satisfied and the requirement is well understood by both parties.
- Strong value proposition: A strong ROI or cost savings compared to the current contract may be enough to avoid an RFP.
- Time pressure: RFPs take time—and even well-organized RFPs seldom run on schedule. If the need is pressing, buyers can often find ways around procurement rules.
- Disruptive technology: New-to-the market technology is a logical candidate for an informal proposal. In fact, it may be the only way to sell, since the solution may not comply with RFPs built around known approaches.
Never a sure thing
An invitation to submit an informal proposal is not an automatic sale. Many such opportunities have slipped away because a weak or incomplete informal proposal raised concerns that prompted the prospect to keep looking—or to take the less risky option of a formal RFP.
Learn as much as you can
Think beyond the key contact to consider other likely decision makers. Enlist your contact’s help in learning as much as you can about the following and their issues:
- Economic buyer—the individual who will focus on strategic fit and value for money, and who will make the final decision
- Technical buyers—gatekeepers who will assess your offer against functional requirements, and advise on contracting and other risks
- User buyers—those whose daily work lives your solution will impact most
Instead of relying on your contact to advocate for you with each of these buyer types, anticipate and address their questions in your proposal.
Be sure to understand what size proposal is expected. You may hear “simple” and think 5 pages; you prospect may be thinking 25.
Prepare content in advance
Time is often an issue when a prospect invites an informal proposal. Even when there’s no rush, submit as soon as possible to forestall competing offers or a change of heart by your prospect.
To respond quickly without sacrificing quality, pre-build your proposal, and then tailor it to suit each opportunity.
In the coming weeks we’ll show you how to do this.
Remember the prize
If these ideas sound like a lot of effort, remember: The work it takes to build strong informal proposals is well worth a sale without the far more labour-intensive (and riskier) process of responding to a competitive RFP. Also, once built, much of the content in an informal proposal can be reused.