Product Managers & RFPs: It’s A Love / Hate Thing

RFPs have to be carefully evaluated before you spend time on them
RFPs have to be carefully evaluated before you spend time on them

One of the unique things about being a product manager is that we wear many hats during a given day. The sales hat is one that we can find ourselves wearing a lot if our product is new, technical, or just basically foreign to our sales teams. As we find ourselves in unfamiliar sales territory, one of the jobs that keeps coming up over and over is how best to deal with a Request For Proposal (RFP) from a customer.

Responding to an RFP can take a great deal of time, energy, and effort. That’s why it is so maddening when you find out weeks or even months later that some other company won the opportunity or that your proposal was never seriously considered because the customer just used it to drive down the other guy’s prices. Arrrgh!

So look, as excited as all of us generally are when we first see an RFP, we really need to understand its background. Your company’s sales rep for that account needs to have asked some critical questions. Is this RFP just being issued so that the customer can do some price shopping before going back to their current vendor and beating them up on price? Or (even worse) is this just a company process that they need to go through and they really have no intention of leaving their current vendor? These are the types of questions that you need answers to BEFORE you start pulling all-nighters to create a response.

If you know your product’s competition well, than you can save yourself a great deal of grief. If the customer has already effectively selected one of your competitors and this proposal is just for show, then there is a good chance that the proposal was written with your competition’s products in mind and it will quickly show through in the questions that they are asking. Don’t forget your old friend Uncle Google: do a scan of past customer press releases and see if they’ve awarded contracts to your competition in the past. If so, then re-read the proposal to see if it is slanted towards that competitor.

The best way to make sure that you only spend your time working on RFPs that represent real opportunities is to develop a “Go / No-Go” checklist. This is a checklist that you fill out for each RFP before you start working on it. The checklist can contain questions like “Does the RFP align with my product offering or my competition’s product offering?”, “What is the dollar value of this opportunity?”, “What is our relationship with this customer?”, etc. Once you have all of the answers to these questions, then you can decide if it’s worthwhile to respond to an RFP.

Side Note: If you’d like a copy of the 10 questions that should be on every product manger’s RFP Go / No-Go checklist form, then fill out your name and email address below, hit “Submit” and I’ll send you my list via email.

Life is strange and sometimes RFPs arrive in the mail (postal and “e”) out of the blue. STOP! Before you spend even a minute working on that RFP you or your sales team need to do some digging and find out why your firm got a copy of it. Make some calls to the company that sent it to you and find out why. Trust me on this – responding to blind RFPs rarely ever results in a sale of your product. Good questions to ask include “How did you hear about my company?”, “How many vendors have you asked to respond to this RFP?”, “What is the decision making process that you will use to evaluate responses?”, “How will you narrow down the list of potential vendors?”, and “What are your next steps?”.

If you decided to go ahead and respond to an RFP, then it’s time for you to do some research. After all of the product information has been provided, there is one final critical section that too many product mangers skip over: the request for references. You need to understand why that request is there: the customer is trying to validate their decision. The more closely matched to the customer that your references are, then the better position your response will be in. Simple things like providing a CIO as a reference if it’s the CIO that is driving the RFP, or providing a firm that is as large or larger as the customer as a reference in order to show that your product works well with companies that are the customer’s size.

One last thing: if you don’t win the RFP, then by all means call the customer and ask why. The selection process is all over and done with by now and so often times their defensive shields are down at this point and you might get an honest answer if you ask the question nicely.

Have you ever spent a great deal of time responding to an RFP that turned out to be a waste of time? Looking back, was there a red flag that should have told you that this wasn’t going to work out? Have you ever decided to not reply to an RFP – why did you make that decision? Leave me a comment and let me know what you are thinking.