Request For Proposal – 3 Reasons It’s Killing Your Business
Request for Proposal
A Request for Proposal (RFP) from a prospective buyer, whether verbally in a meeting or more formally through a written RFP, is usually welcomed by both Sales People and Sales Management, as a positive sign that a sales opportunity is progressing through the sales process. In some cases it may well be a positive sign, however in most cases this is not the case and furthermore, answering your prospect’s Request for Proposal could in fact not only lose you the sale, but can also be hugely damaging for future sales. The most successful Sales Professionals all have an in depth understanding of the Request for Proposal process and use this knowledge to both manage their time effectively and beat their competition repeatedly. Here are 3 reasons why responding to a Request for Proposal is killing your business:
1) Your Prospects are sharing your answers to the Request for Proposal with your competition.
If you have been in sales long enough then I am sure one of your best clients will have shared with you a proposal from your competition. It would surely then be naïve of us not to believe that some of our proposals are being shared with our own competition. In the same way that you do, your prospects and your competition use the information against you.
2) Buyers Due Diligence.
When you or your own buyers go to market you are frightened of making a mistake or paying too much so you get three proposals. Every time you get three proposals two companies lose out. These two losing companies have allocated time and resources to undertake the Request for Proposal, which could have been used elsewhere on better qualified sales opportunities. This is why Sales People are always busy but not always effective.
3) Requests for Proposals are a Distraction.
From the very minute the sales person agrees to respond to a Request for Proposal the Sales Person is distracted. They are distracted from asking further qualifying questions that would disqualify the opportunity. They are distracted from prospecting for new sales opportunities that actually can be qualified. They are distracted after completing the Request for Proposal while they try to manage the opportunity through the sales pipeline. They are distracted when they buyer refuses to return their calls for weeks and despite what they have been told, they still take it personally which lowers their self esteem and thus performance.
Request for Proposals can be properly managed if Sales People and Sales Managers make one simple change to their belief system: “Prospects have no right to a proposal – they have to earn the right to a proposal by sharing certain information with the Sales Person”. This information from the prospect, allows the Sales Person to effectively qualify or disqualify the opportunity. Whilst the idea behind this may be simple the implementation of this is by no means quick and easy.
Effective Sales Management should provide the criteria for responding to any Request for Proposal and coach Sales People in Consultative Selling Skills, to help them uncover the necessary criteria from the prospect. Responding to any Request for Proposal without properly qualifying each one will serve to keep Sales People busy, but it won’t make them effective and ultimately it won’t help them hit Sales Targets necessary to grow the business.
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