What's the greatest challenge to selling value? Many sales teams put the blame on RFPs.
And no wonder – RFPs are designed, not to uncover value, but to level the playing field and squeeze the lowest possible price out of suppliers. They do this by binding sellers to a set of rules specifying the format and font suppliers must use in their responses, the information that must be included, the deadline and, most frustrating for value sellers, a prohibition on additional research. "The rules were created for value companies to lose," laments Dan Kosch, cofounder of Impax.
That's the bad news. The good news is that rules are made to be broken, and RFP rules are no exception – as long as you know how to do it right. Kosch and Impax copresident Mark Shonka detail four strategies value sellers can use to fight back against the constraints of the RFP and win the sale on value:
- Don't get trapped in the first place. Look at your existing customer relationships from the perspective of the RFP trap. How can you manage those relationships so successfully that your clients are delighted? How can you build walls to keep your competitors out? Kosch advises regularly researching clients, both the company and the relationships that exist between your company and theirs. He also advises giving a relationship/value presentation on a regular basis, such as once a quarter or once a year, to review the health of that relationship and ensure that the client understands the value you have delivered. "The only value you bring to a relationship is the value you get credit for," explains Kosch.
- Don't play if you can't win. Don't blindly go after every RFP that comes your way. One company did this only to discover that at the end of a year, it had responded to 103 RFPs and won only seven of them. Yikes! To avoid that fate, lay out the criteria an opportunity must meet in order to pursue it. For instance, is your product a good fit? Is there a budget available? How urgent is it? How easily will you be able to manage this account if you get it? Do you have the right information to win the RFP? How strong are the gatekeepers? Are you aligned with influence? Did you influence the RFP specs? Is there a philosophical fit? One Impax client created a formal RFP assessment grid on which it now rates each RFP according to these kinds of criteria; the resulting score determines whether the company replies to an RFP. By taking this kind of measured, scientific approach, says Shonka, you avoid getting caught up in the "emotion of the moment." Don't be afraid to walk away.
- Change the ground rules. Start by ignoring the "no research" rule. When you sell on value, you'll need more information and a bigger picture than what's provided in the RFP. Start with analyst data, SEC filings, and calls to people in your network who might have some insight into what's going on in the company. Then go ahead and call into the prospect's company.
When one sales rep worried about doing this since the RFP expressly forbade it, his manager replied, "I'll pay you either way; go ahead and challenge it." So the rep called an executive and explained that he would like to reply to the RFP, because it looked like there was a good fit, but he needed to do some research. The executive agreed that this made sense. When the rep stated that the RFP forbade additional research, the issuing company's exec said, "What? Let me see that thing. Who wrote this? Do what you need to do." The rep wound up getting some great insight that led to a winning response.
- Deviate from what the client has asked for. Modify the response format or include an executive summary that emphasizes the ways in which the prospect's business will be impacted by working with you. In cases where you feel you can't win but you need to respond to the RFP for reasons such as visibility, consider sending in a partial response. Finally, push to do a presentation. Tell the prospect, "We are happy to put in the dozens of hours necessary to give you an effective response. We would like just one hour back to present our response." This approach works almost every time for one Impax client.
The key to success in handling RFPs, conclude Shonka and Kosch, is to deal with procurement in a way that's different from what's expected. You may think you're boosting your chances of success by toeing the line the department's drawn, but all you're really doing is getting lost in the crowd. Instead, sell to procurement; involve the team members in your process, treat them like businesspeople – or avoid them completely. By being different, you'll stand out and boost your chances of winning the sale.
For more information, visit www.impaxcorp.com