Too valuable to part with, yet not perfect
At times, the stipulations imposed by a prospective buyer can be quite concerning. It’s typical for vendors to shoulder all their expenses without any assurance that a contract will ultimately be granted. Additionally, a buyer often retains the right to halt the purchasing process at will, without any obligations or reasons provided. Such conditions, among others, can be disheartening—especially when you sense that these terms favor one or more of your rivals. What steps can you take in response?
First and foremost, you are not obligated to meet every request from a buyer. If the suggested process or terms are completely unappealing, it may be best not to submit a formal response at all. Often, an opportunity can seem too good to pass up, even if some of the stipulations are frustrating. While your general approach should be to accommodate as much as possible, there may be certain conditions that go too far. This could lead to additional stress if those conditions are deemed ‘knock-out’ criteria by your potential client. Refusing these terms might disqualify you from consideration, and you can trust that your competitors will be closely monitoring whether the criteria are enforced. Therefore, any decision to deviate from the established rules must be intentional, with all possible repercussions carefully evaluated.
Suggest modifications to the conditions
That doesn’t mean you have to accept every demand placed upon you. If you choose to take the risk of being excluded, it’s because you’d rather be removed from the list than stay involved under terms that don’t sit well with you. In such situations, it’s important to assert your position: clarify what you’re unwilling to accept and outline what alternatives you’re offering in return. Highlight why these alternatives would be beneficial for all parties involved. Often, there’s an opportunity to initiate a separate process outside of the RFP that could prove more advantageous for both the buyer and the vendor.
Based on our experience, it’s often beneficial to look for a deeper motive behind the RFP. There is usually a business objective driving the inquiry at hand. For instance, a bicycle manufacturer seeking designs for a new model may have realized it’s losing market share due to its delayed response to emerging trends (a real-world example). Similarly, a leader in robotic manufacturing might not only be after technical skills, as stated in the RFP, but could also be searching for a strategic partner capable of attracting new customers (another real scenario). If you can offer something that aligns more closely with what your potential client truly needs from a business standpoint, there’s a good chance you’ll have an engaging discussion about it with your prospect.
Two real-world examples
Just to spark your imagination and explore the possibilities that may arise from this.
Case 1: A major multinational financial institution issued an RFP for storage hardware to meet its increasing IT storage needs in the office environment. This surge in demand was largely driven by unchecked email usage, poor collaboration management, a rise in graphics and video content, and, most notably, the unrestricted creativity of end users who were developing IT solutions that the official IT department was unable to deliver.
Rather than simply supplying the requested hardware, the hardware vendor partnered with a service provider and initiated discussions with the customer on how to manage the rapid growth in storage needs. In summary, both vendors ultimately secured a long-term managed storage outsourcing contract, valued at least ten times greater than what was originally outlined in the RFP.
Case 2: A small bank had invested several million euros in a new payment and savings system that provided them with a notable competitive edge in the market. However, due to their restricted business volume, they found it challenging to manage the maintenance costs of the new system. As a solution, they initiated a ‘beauty contest’ to choose a service provider capable of assisting them in lowering these expenses.
Instead of competing with other providers and responding to numerous (in the provider’s opinion) irrelevant questions, one service provider presented a completely different proposal. This provider had recently acquired a company that had also invested in a similar system using the same technology. Their offer to the bank was: let’s collaborate in Europe and establish a Shared Service Center for payments and savings. They proposed utilising the bank’s investment for the Bank’s local market while leveraging the provider’s investment for other European markets, thus sharing the advantages of economies of scale. The outcome? The bank and this provider formed a strategic partnership, leaving the original competitors unmentioned from that point onward.
Creativity brings rewards
The takeaway from the above is that while it’s typically wise to adhere to the buyer’s established rules, there are valid reasons to attempt altering them. Even if this poses a risk of being excluded from the buying process. When contemplating how you would like these rules modified, you might as well consider crafting a significantly improved offer that better addresses your customer’s business needs. Focusing on your customer’s strategic goals and making an effort to align with them can truly yield beneficial results.
