What is an RFP? What Salespeople Need To Know
Yes, another sales acronym that we all need to know. If you’ve just received an email that has you asking what is an RFP? You are not alone. This is what they are asking you for and what you need to do next.
Asking you to submit a response to an RFP or “Request for Proposal” is a request from a potential or current customer to provide them a formal proposal to purchase your product or service.
Why Did My Prospect Create an RFP?
At large corporations that are implementing sizeable projects, there needs to be a formal and fair way to procure products and services. For example, if your customer is purchasing software, it may be used by multiple departments with different needs. An RFP allows your customer to put everything they want into a single document. From there they are able to distribute this document to all potential vendors and ensure they get everything they want.
Think of it like dating: The big company knows what they’re looking for and they are evaluating potential suitors. All the potential suitors, including you, are trying to impress the company with their best qualities and skills. The “proposal” is like your dating profile. You will specify what you do best and what you can offer the company. In the end, the company will choose a winner and accept their proposal.
Note: Writing Proposals Takes a Long Time
Often an RFP will come with a long list of requirements your product or service must meet. Even if you have templates or sales engineers to help, these will take a lot of time to prepare. As a sales rep, time is one of your most valuable assets and you need to be very careful how you spend it. You need to have a firm grasp on how competitive you are going to be when submitting an RFP. If you don’t meet the requirements, you may want to pass.
Tip: Don’t Write a Proposal Unless You HAVE to
It may be tempting to write a “proposal” for your solution, even though the prospect has not asked for one. As a buyer of many different types of products and services, I can tell you that every single time I have received a long, fluffy proposal (when all I asked for was a quote) I skipped every single page but the pricing page. If you are at the point where you are delivering formal pricing information to your prospect—more often than not—they know all about you and your company, they just want the price.
What are These Related Documents? RFQ? RFI?
The RFP has two related documents that you may be asked for at one point in your sales career:
- RFQ “Request for quote”
This is very similar to an RFP but it typically requires less information. If you are purchasing 1000 computers and you already know the make and model, it’s not necessary for a lengthly proposal, so just your best price in an RFQ response is fine.
- RFI “Request for information”
This is often used in very large projects where a potential customer needs a lot of information from vendors before they can even begin to ask for a quote.
The Bottom Line
If you want to close big deals, the odds are you will need to respond to an RFP, RFQ or RFI at some point. Spend your time wisely and you can take advantage of these opportunities!
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