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RFPs...to respond, or not to respond? That is the Question.

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Every time we receive an RFP (Request for Proposal) for a new project, we have to sit back and think long and hard about whether or not we're going to respond with a proposal. More often than not, the answer is "no". Here's a little insight into why this is often the case.

As a boutique creative firm specializing in strategic branding and design, Luminous helps clients of all sizes succeed by creatively telling their story and helping them connect with their target audience in meaningful ways. We do this by communicating their unique strengths—through our passion, creativity, and talent—in ways that resonate with the needs and desires of their ideal customers.

One of our own unique strengths is our ability to deliver both a creatively, as well as, technically excellent solution. Our clients rely on our experience and expertise in both design and (technical) development, and they've told us so. This is often the reason we are chosen over other competitors who may only be strong in one area.

Unfortunately, in the case of most RFPs, there is no opportunity to interact with the client ahead of time, which makes it very difficult to communicate these types of strengths to the degree necessary to effectively differentiate ourselves from the pack.

For a given opportunity, we first evaluate whether or not the amount of time required to go through the RFP in the level of detail necessary to submit a meaningful response outweighs our estimation of the chances of winning the bid. Essentially we ask, is the risk/reward attractive enough to justify the investment of our time required to respond? If we feel that it does not, then it makes more sense to pursue other opportunities we think have a far greater chance of success.

In general, we respond to very few RFP's for a number of reasons, mainly:

  1. Responding to RFP's is very expensive, and is essentially a sunk cost—an unrecoverable expense. The fact that it's a sunk cost isn't unlike producing any other proposal, however it usually takes an enormous amount more time and effort to respond to an RFP in a way that has any chance of success, versus a non-RFP proposal. This is usually due to the requirements of the RFP and the fact that most RFP's are too tightly structured and poorly written.
  2. RFP's are not very conducive to establishing any kind of rapport with the client because we are usually not allowed to meet with the decision-maker(s) in advance. In fact, in some cases, it is nearly impossible to even discuss the project with the client other than to ask very specific questions via email or some other written method. These are typically only answered via an addendum to the RFP, which must then be downloaded from the client's website. This "disconnected" process, where we cannot meet and get to know the client and let them get to know our firm, tends to mean a much lower chance of success.
  3. In our experience, most RFP's are put together by people who do not have much, if any, experience working with or hiring creative firms. Therefore, they tend to be fairly uneducated about the creative process and what makes for a great solution. We've found that the more educated and experienced a client is in our industry, the better chance of success we have in winning the job.
  4. The scoring systems typically used for evaluating RFP responses tend to look for specific "buzz" words, and you have to be willing to play the game to have a chance to get on the short list. Still, even after making it that far, all too often the lowest bidder is the one selected regardless of the level of talent, expertise, and experience. I'm convinced this is the primary reason so many government and municipality websites are mediocre at best (with a few exceptions).

If an RFP is lengthy and involved; primarily emphasizes commodity components, rather than unique abilities and talent; and the response requirements are extraordinarily time-consuming; we are much less likely to respond. The requirements for the format of the response "package" can also be a turn-off. We are not interested in spending a lot of our own time putting together RFP responses in a bunch of different formats (original hard copy, plus 'x' number of additional copies, plus delivered in a certain electronic format on CD-Rom, and other unusual formatting requirements, etc.). We feel that a response in PDF sent via email should be perfectly acceptable, and is easy for the client to distribute.

If however, the RFP is concise and well-written, the deliverables are clearly outlined, it appears that the client knows what they are talking about and are asking for, and the requested form of the response is not overbearing, we are more likely to consider responding (provided it meets certain other criteria).

The primary criteria that plays into our decision-making about whether or not to respond to an RFP, includes:

  • Do we have an existing relationship with the client?
  • What is the client's experience in purchasing design solutions?
  • What is the potential profitability?
  • How well does it fit within our target profile?
  • How interesting is the project?What potential is there for future work?
  • What other intrinsic value is there? (i.e.: high profile client/project with a lot of market exposure)
  • How well does the client's budget fit the scope of work (if budget is known)?
  • How extensive are the upfront unrecoverable expenses? (i.e.: what will it cost us to respond)
  • What is the probability of winning the job?

We are not against competing for work, which we've become very good at over the past 14 years. But, our experience over this time has shown that RFP's tend to yield very little reward for the amount of time and effort required to respond. Essentially, responding to blind RFP's (where we cannot meet with the client) tends to be very expensive and not very profitable. For this reason, we will only occasionally respond to an RFP where we feel like it is an extraordinary fit and an opportunity that we have a great chance of winning.

Unfortunately, this means that for all of the other clients whose RFP's we do not respond to, they are missing out on the opportunity to work with us. We're a dynamic group of professionals, who are experts in our field, love what we do, and have become particularly good at it—delivering award winning results that dramatically and positively affect our clients' business efforts.

Design is very subjective thing, and most of the time we've found that clients who rely on an RFP process are evaluating and choosing a creative firm solely using objective criteria. Often that results in the client choosing a lesser firm based on factors that aren't really going to matter when it comes right down to doing the work. We think that much more emphasis should be placed on the quality of a firm's portfolio, than on say the amount of experience they may or may not have in a particular industry. The same principles for creating good design are universal, and apply regardless of the industry.

Now that I've said all of this, I'm sure that many of you have an RFP success story to share. One where you had an RFP process that went very well, and you found a great company to work with that delivered an exceptional solution for your needs. If that's true, then I stand corrected, and congratulations are in order.

Either way, I wish you success with your next project, but I encourage you to consider using an alternative to the typical RFP process for determining who to hire. I think you'll get a better quality result in the end.


3 comments so far:

Stefan, You hit this one right out of the ballpark. I couldn't have said this any better. After YEARS of responding to RFP's, I finally stopped making the investment in time, effort and resources. The success with winning the RFP depends on two factors: 1) you need to have an awesome portfolio and 2) you need to know the people reviewing the proposals and making the final decisions.

You're absolutely right Stacy. And even given both of those factors are true, the conversion rate is still lower than a non-RFP opportunity. I still am not exactly sure why that is, but it seems to be the case more often than not.

Someone I was talking to recently who had read this post brought up another good point about RFP's. Sometimes, in an RFP situation, the client has essentially already chosen someone to work with, but must go through the proper procedures (RFP). So, in a case like this, the RFP is then written in such a way where the only firm that could be considered the most qualified is the one they've already chosen. This is the most frustrating because it becomes just a big waste of time for everyone else responding who has essentially no chance of winning the bid.

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