Sales Essentials Blog

Should clients pay for tender and RFP submissions?

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In principle, and ideally in practice, yes they should.

Why?

Because there is a lot of time, effort, money and IP that goes into preparing a tender or RFP (request for proposal). This also includes RFIs (request for information).

The companies requesting these tenders, RFPs and RFIs are freely benefiting from the expertise of suppliers if they are requesting highly detailed responses and expecting to pay nothing for this information. With the advent of software these companies can easily compare offerings and strip mine the IP to serve themselves at the suppliers’ expense. Basically they are getting knowledge and expertise for free and this is not a fair exchange of value.

As suppliers, we should be able to choose to put in as little or as much as we like; however, we are often constrained by the parameters of the Tender or RFP process.

If we don’t include certain information requested by the prospective client company we cannot participate in the tender process.  We are in a bind. Especially if the information being requested is our ‘secret sauce’, our processes, our ‘how to’, our IP. Do we submit or not?

Tenders have gotten out of hand in many instances, with supplier companies being ‘held to ransom’ by prospective client organisations. Much of what is being requested today is completely unreasonable.

Healthy, effective relationships are the best course of action because they are about a fair exchange of value where both parties respect each other. No relationship can function or work well if one of the parties is taken advantage of by the other.

There are many and diverse ways to pitch and bid for business today; but we need to become more discerning about what sales opportunities we go after. Discernment* is the ability to judge well. The ability to stand up for what is right and be courageous in the face of adversity and ethically compromising situations; this can mean saying ‘no’ to opportunities that do not serve us or our clients or our communities well.

Nothing is for free 

There are some industries, like architecture, where draft ideas and plans are drawn up and a fee is paid whether the plan is accepted or not, there are marketing agencies and designers of different denominations that have adopted this model as well. But not often enough across most industries.

Smart clients and procurement teams are recognising that engaging with real people to solve complex problems is worth something and should not be subjected to a bidding war. Some supplier companies are now charging for a briefing session, especially where their expertise and IP will be used to help sort out a project. This means that at least you get paid for your initial work up front before you embark on anything more time consuming and expensive.  

So what can you do?

If you cannot get paid up front for your submission then maybe pull back on what you are giving away at that stage. Especially in the first submissions. This saves time and money and lowers the cost of sale. It also protects your IP. If the prospect wants more information or you get to the following stage you can then go into detail, preferably in a meeting.

Always assess the viability and probability of any tender

It pays to always assess the viability and probability of any tender, RFP or proposal process before you embark on an expensive tender or proposal submission campaign. Assessing the probability of winning and knowing what you have to do to win it before you really start is a sobering experience.

Author: Sue Barrett, www.salesessentials.com

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