One of the most common questions that salespeople have to consider is whether an RFP (request for proposal) is worth responding to. This process of qualifying in or out of an opportunity pursuit is one of the skills that sets really successful salespeople from those that achieve only moderate success.
Precious sales resources should not be spending time working on pursuing deals that either you will not win or are not truly aligned to your business goals.
Let’s start by considering a few harsh realities:
Given those facts, most salespeople would have to agree that it’s not the best way to spend their time. But, most companies are required to go through a formal procurement process that will involve getting competitive proposals from a number of different companies, so sometimes it’s unavoidable.
As I’ve discussed in my TSIA research paper, "Making the Move to Outcome-Based Selling," we know that a proactive outcome-based selling approach results in a win rate 3-4 times higher than traditional reactive RFP-based selling.
Having said that, one of the hardest things to do as a salesperson is to “qualify out” of an opportunity to “no bid”, but it does become easier the more you do it. Salespeople either reach this conclusion because of the sense of lost time and personal disappointment, or they feel a sense of responsibility for the resources that get involved in pursuits that lead to a “no win”. Working in a pursuit team with a very low conversion rate is incredibly demoralizing and often the cause of high staff turnover. This is one of the unintended consequences of responding to RFPs that you have a low chance of winning.
A proactive outcome-based selling approach results in a win rate 3-4 times higher than traditional reactive RFP-based selling.
So, it’s clear to any experienced sales leader that one of the winning characteristics of successful modern-day sellers is to know what to pursue and what to leave alone. Remember, you won’t always get it right. You will choose not to pursue opportunities that you might have won, but the key word here is “might”.
The very best salespeople will target a 1:1 win rate. This might seem an impossible goal but it’s not, it just takes ruthless qualification and developing a strong discipline for knowing what to spend time on and what is a waste of time and resource. The attitude you find these sellers adopting is a fierce defensiveness of their time and the time of their pursuit teams.
The best practices for responding to an RFP that I’ve seen follow a simple four stage process.
This is something that a salesperson will typically do on their own, and should never take more than 3-4 minutes. It will get refined over time and will involve answering 7-10 questions which you weigh and score. The more you do it, the stricter you become and the more accurate your assessment will be. When you start out, get others to help to offer an opinion, which I call the “Winnability Index”. Some of the questions to ask before responding to an RFP and assessing the deal are:
There are only very exceptional cases that you should ever consider pursuing a deal that is not fully aligned to your business goals. This step will often require the salesperson to involve a few more people, usually a pre-sales or architect resource, or maybe someone with a commercial responsibility. This is still semi-formal, shouldn’t involve more than 7-10 questions, and shouldn’t take more than a few minutes.
You only move to this step for deals that made it through Step 1. What you’re looking to answer here is whether this is a deal that you want to win. I call this the “Desirability Index”. Some of the criteria you consider here are:
Assuming an opportunity has gotten through these first two gates, you now have a deal that a small group of Sales and Pre-sales professionals have assessed as being both winnable and desirable. This should mean that the salesperson is confident enough to engage in the company’s pursuit approval process, and should always start with a formal qualification and classification assessment.
This should not be too resource intensive nor onerous, but is necessary to establish if any resources are going to be allocated, and to what extent. This is a 15-20-minute process if it’s run by people who are experienced and capable of conducting the assessment. This will often prove to be an invaluable “system of record” if you are ever asked to explain the decision to pursue or not pursue, and this data should always be captured in the opportunity record in your CRM.
Based on the results for Step 3, each opportunity should be given a simple classification. There shouldn’t normally be more than 4 classifications; I’ve seen companies adopt 12-15 different classifications, but the reality is that your next action will fall broadly in to the following categories:
For each of the categories you should have a defined RACI model that describes the resources that are required and what role they will play. Obviously, depending on scale and complexity of the opportunity, the number of resources will vary.
The key is to have the salesperson make the initial assessments based on their knowledge of the customer and your ability to deliver value.
Ideally, you should have Sales resources focused on proactive opportunities where they are using an approach based on how a solution you can offer will positively impact your customer’s business outcomes. When assessing whether you should respond to reactive RFP opportunities, you need a simple, resource-light means of assessing whether the deal is winnable, desirable, and the extent to which resources should be allocated to the opportunity.
The key is to have the salesperson make the initial assessments based on their knowledge of the customer and your ability to deliver value. The formal qualification, classification, and resource allocation should be managed by individuals skilled and experienced at the process. This will empower and encourage your salespeople to make better decisions and balance this with protecting Sales/Pre-sales resources from working on deals that they won’t win and will lead to lower morale.
I’ll be sharing more Sales insights like this and more at TSIA’s upcoming Technology & Services World conference, taking place in San Diego May 6-8. Here are a couple of the sessions I will be presenting as a preview of what you can expect by attending:
There’s still time to register and receive a 20% discount, so I hope you’ll join us.
In the meantime, please be sure to reach out to TSIA today to learn about the benefits of membership in our growing Subscription Sales community. As the head of this research practice, I’ve been working with our member companies on developing new Sales strategies for an increasingly subscription-based industry. I look forward to hearing from you!
Read more Technology & Services World blog posts in which I and the rest of the TSIA research team share a preview of what you can expect to learn at the conference:
Post Date: February 19, 2019
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Martin Dove is the vice president of subscription sales research for TSIA. In this role, he works with TSIA members to help optimize their organization’s sales of subscription, or “as-a-service” offers, to both new and existing customers.
Over the last 25 years, Martin has built a reputation for driving business growth across the technology and services industry as a pragmatic sales leader with a focus on simplification and removing friction in the pursuit of sustainable performance improvement.
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