6 Ways to Determine if an RFP Is Worth Responding To

Katie Flood
Katie Flood

Picture this: you’ve just received your fourth Request for Proposal (RFP) this week. While reading through the document, your mind runs through a quickfire list of evaluation criteria. Client relationship, the opportunity value, and timeline all race through your mind. After a quick review, you decide: This proposal is worth responding to.

Pause. What’s wrong with this RFP process?

As David Allen, author of Getting Things Done, once said: “Your mind is for having ideas, not holding them.” And your process for responding to RFPs should be no different.

The reality is, writing RFP responses takes up valuable time, resources, and collective energy, so it’s important to evaluate bids using a consistent, scalable approach that the whole team is aligned with. (Otherwise, the RFP process can get messy as different employees use a range of evaluation criteria.)

So, how do you respond to an RFP with confidence? Read on for industry insights, recommended criteria, and advice to make the go/no-go process easier in six simple steps.

 Table of Contents:

Learn the Industry Standard

Determine Your Evaluation Criteria

    1. Assess Customer Fit
    2. Examine the Relationship
    3. Consider the Competition
    4. Gauge the Timeline
    5. Scope Team Resources
    6. Determine the ROI

Put Your RFP Criteria Into Action

The Industry Standard: 72% of RFP Teams Use a Go/No-Go Framework

Research shows that 72% of teams use some form of go/no-go decision framework before starting a response to RFP. This shows that almost three-quarters of teams believe it’s valuable to assess customer fit before investing resources into a proposal.

Adoption of Go/No-Go RFP Process (2021 Proposal Statistics)

Establishing criteria upfront (to determine if an RFP is worth responding to) helps teams be more impartial and consistent in their RFP process.

Responding to an RFP: Determine Your Evaluation Criteria

While there’s many factors to consider when evaluating and how to respond to an RFP, we’ve narrowed it down to a few critical actions.

1. Assess Customer Fit

Consider whether this opportunity is the right fit for your business. For example, if you cannot deliver immediate (or future) value in the required timeframe, the customer may be a bad fit. Or, if you’ve done business with a similar company in the past, take a deeper look at your previous RFP success metrics. If the data indicates that it’s a poor fit and seems like a long shot, approach the document with caution.

Plus, how much do you know about this industry? This will also help you assess if the RFP opportunity is a good fit because it’s important to understand if the issuing business is actually part of your target market. If you receive a proposal for an industry that isn’t relevant to your business, you could be doing your company a disservice by responding.

Risks of bringing on an ill-fitting customer include:

  • They’re more likely to churn
  • They could point your product in the wrong direction
  • They may negatively impact team morale

Questions to Assess Customer Fit:

Is this industry a fit for your business? Do you know enough about the industry, its challenges, and how to best solve them? Does the customer fit your strategic and sales goals? Consider if you’ve had success with similar companies and industries in the past (or if the issuing company is outside your target market).

Do you have project insight? Did you anticipate that your company would respond to this RFP? Do you have distinct insights into the potential client’s needs and expectations? Or is the project information based solely on solicitation?

2. Examine the Relationship

Your relationship with the prospect can have a strong influence on the success of a submitted RFP. Access to the decision-maker, stakeholders, or influencers in the process can all give you a leg up on the competition.

With an existing relationship in place, you’ll have a better sense of the prospect’s needs and timelines, as well as opportunities to ask (important) clarifying questions. For example, Qualtrics, an experience management software, sends hundreds of RFP responses every year. In their experience, they found that relationship is the number one influencer in winning a response to RFP.

Questions to Assess Client Relationship:

✓  Have you worked with this organization in the past? Does your team have a well-developed relationship with this potential client? If you have never worked with the company and the RFP is your first touchpoint (also known as a “blind RFP”), your chances for consideration might be lower.

✓  Do you know who the decision-makers are? Can you speak to key contacts for more information? Do you have access to any stakeholders that can share insights or influence the decision-making process?

3. Consider the Competition

Watch out for competitor language in the RFP. You might notice references to specific product features or terminology that a competitor is known for, which can signal a predetermined choice by the prospect (or even worse, a competitor’s involvement in creating the requirements). While it’s possible that the customer is already considering another product, remember—you don’t know for sure unless you ask.

Questions to Assess the Competitive Landscape:

✓  Do you have competition? Be sure to evaluate the RFP for any references to specific features you’re known for—or that your competitor has instead.

✓  Is your team qualified? It’s important to self-evaluate your team and ask whether you’re superior to most (if not all) of your competitors. Do you have relevant experience, or are you marginally qualified?

4. Gauge the Timeline

Teams may have just weeks (or sometimes even days) to submit an RFP response, so the deadline is another important factor. A request with a tight timeframe will mean a rushed job and a higher likelihood of missing the opportunity. Last-minute requests can also signal the prospect has already selected their vendor. If this is the case, they may only be issuing an RFP to comply with their internal procurement process.

Questions to Assess Your RFP Process Timeline:

✓  Does this timeline comply with your team’s typical turnaround? Before thinking about how to respond to a RFP, consider if this proposal is possible within your team’s service level agreements. (For example: providing your legal team three business days to review.) If not, can you make a case for why your team should make an exception for this particular bid?

✓  How often do you win bids with a tight deadline? Look back at past RFPs that your team has rushed. If your win rate is relatively low on these bids, you should consider passing on this opportunity.

✓  Can you reuse existing RFP content? If you can reuse content from past proposals, you may be able to respond to an RFP faster than expected. Are there little-to-no new requirements, or will you need to spend time customizing the document?

✓  What stage of the sales cycle is the RFP received? The stage of the sales cycle in which an RFP is received also dictates how you should proceed. For example, if a tech company has already been through a demo and is nearly halfway through the sales cycle, there’s a good chance that they will move forward with the product.

5. Scope Team Resources

Next, you need to determine if you have the right resources available—including access to your Subject Matter Experts (SMEs) within your RFP’s timeline. According to new RFP management trends, measuring qualitative metrics like RFP contributor capacity is becoming increasingly important.

Questions to Assess Team Resources:

✓  Do you have resources available? How much bandwidth do you and your team have to spare? Are your core team and additional resources available? Or are you stretching your team too thin?

✓  Do you have buy-in? Do you have buy-in from the right internal stakeholders to meet this deadline? Or is this an important client for your team to retain?

6. Determine the Value of Winning

Take a step back and ask yourself, what is the cost of pursuing this opportunity? Spending 15 hours on a potential $5,000 deal is less efficient than spending 25 hours on a proposed $200,000 contract. That’s why weighing your time against the opportunity will allow you to better prioritize which RFPs to pursue.

To calculate this, you’ll need to understand your return on investment (ROI) for this particular bid.

Want to learn how to calculate return on investment for each proposal? Read this guide on RFP metrics.

Questions to Assess the Opportunity’s Value:

✓  What is the cost of pursuing this opportunity? Based on your odds of winning, is the cost to submit reasonable? Or is there a high cost of resources for a bid you’re not likely to succeed with? Consider whether the cost is worth the gain for this opportunity (which brings us to our next point).

✓  What’s the value of winning? By submitting this bid, are you likely to meet or exceed your team’s profit goals? Or is this a low-value RFP that won’t help your team reach its target profit? Compare the value of this RFP to your team’s overall revenue goals.

Remember: You Don’t Have to Decide Immediately

It’s important to keep in mind that you don’t have to decide to move forward with an RFP opportunity right away. It’s okay to take the time to ask the potential customer some questions about the proposal (or any other context that you may need).

Download Loopio's 2021 RFP Response Trends & Benchmarks Report [2021 Proposal Best Practices]

Putting Your RFP Criteria into Action

Now that you know the criteria for assessing an RFP, you need to make your framework actionable. Here are the two steps you need to take to put your new evaluation criteria to work.

1. Create a Standardized RFP Intake Form

In an ideal world, your RFP process should start before the RFP arrives. Prepare an alert system so that every time you hear about a potential proposal, key stakeholders are notified to start the RFP assessment process.

One way to do this is to create a mandatory intake form. That’s what the Qualtrics team does to handle their massive volume of hundreds of proposals each year. When someone becomes aware of an RFP, they fill out the form, even if the RFP itself isn’t yet available.

This will help you start the evaluation process early, so you can determine if the team even has bandwidth based on the timeline. Pro tip: if you include critical questions about the deadline and opportunity value [$] in the intake form, it’ll save you from backtracking later.

Create your intake form through Salesforce, Microsoft Dynamics, or any Customer Relationship Manager (CRM) of choice. (Google Forms will also do if you’re in a pinch.) Use it to capture essential information about each RFP. We recommend including:

  • Due dates (including those for questions and preliminary forms)
  • Company name
  • Sales routing information, including geographic region, vertical, company size
  • Type and format of the request (e.g., web-based portal, spreadsheet, or word document)
  • Notes on the prospect’s needs and potential key themes
  • Opportunity $ value (if known)

If you don’t already have a clear RFP process to capture incoming projects, now is the time to start one. Visit RFP Academy (Lesson 1) for advice on implementing an intake process.

2. Draft Your Own Go/No-Go Framework

To determine which RFPs are worth their time, many teams create a “go/no-go” decision framework using the key questions we covered above. This framework helps consistently focus on the bids most deserving of your team’s time and attention.

Looking at the evaluation criteria we just covered, which are the crucial questions that you’d like your own go/no-go framework to cover?

Make sure your questions include the following categories:

  • Customer fit
  • Relationship
  • Competition
  • Timeline
  • Resources
  • Opportunity Value

P.S. Too busy to create a custom go/no-go framework? Download Loopio’s free template now.

Go/No-Go Decision Template for RFPs

How to Respond to a RFP (And Say ‘No’ Gracefully)

If you go through an assessment process and still feel uncertain about an RFP, consider revisiting the opportunity with your team. Be honest about your hesitation—there’s no shame in backing out gracefully.

Letting your prospect down gently builds trust and can help you establish the foundation for a future relationship. It’s important to remember that writing an RFP response isn’t just a big lift for you—it’s also a big lift for the folks reviewing the RFP. Try and do your part to make their job easier.

You can let them know your company doesn’t have the right solution by submitting a no-bid letter. No-bid letters have the advantage of helping you maintain your relationship with the customer—while also providing candid feedback about why this RFP doesn’t suit your business.

Send this polite submission through the same channels as you’d submit the RFP—you may be surprised how this approach reaps rewards in the long run. In some instances, if the potential customer wants your business, they may cancel the RFP and reissue it based on your feedback. (Pro-tip: templatize a friendly no-bid letter declining the opportunity so you can personalize it anytime you need to say no to an RFP).

For more strategies to improve your process from beginning to end, sign up for RFP Academy (it’s fun—and free).

Improve RFP Responses & Process [Loopio's RFP Academy]

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