You know that old line—sex is like pizza, when it’s bad it’s still pretty good? Well, just as it’s wrong about pizza—Papa John’s anyone?—the same sentiment applies to RFPs (aka, request for proposals). Bad RFPs are just plain bad all around. By their nature large, capital IT project already contain risk. A bad RFP does nothing except add risk to an already risky situation.
In the last two years, I have led the response to more than a dozen RFPs for digital projects with budgets in excess of $150,000; I’ve also declined to bid on three times as many more.
Each agency has their own golden rules on what RFPs to move forward with but we all want to know that we have a good shot at winning and being a good fit for the project. Since we can’t logistically respond to all RFPs (with a thoughtful approach), we can’t work on the ones that obviously trigger a red flag. I’m still occasionally seeing RFPs ask agencies to submit their response on a CD-rom in the mail—seriously, this is still happening in 2018. I pass these RFPs on to my dad.
That’s the whole point of taking your RFP seriously—you’re potentially missing out on the best talent with a poor RFP. So increase your odds of landing the perfect partner by building an ecommerce-platform RFP that follows these rules.
Rule 1: Start with an RFI
Responding to an RFP takes a big time investment and involves people across an organization: a CEO or other leader who provides overall response direction, an editor to improve the writing, engineers to provide estimates, designers to do the same, a strategist to provide insight, and a creative director to give thought to pitches. It’s a lot of man hours, particularly for agencies, as they live and die by the billable hour.
An RFI (a request for information) is a lower lift than an RFP, and often organizations ask for one to limit wasting agencies time. Once the RFIs come in, then they ask a smaller pool to commit to the full RFP.
Issuing an RFI is a strong indicator to an agency that the organization will value the expertise of outside partners. It will also save you time, as RFIs take far less time to evaluate and help you better understand what kind of agency you actually need. (This can be hard to tell at the outset, much like with dating).
What to do instead: Send a concise RFI to your vendor list, and use the responses to narrow it down to three finalists. Worried your RFI might be missing a question? Forget about it and issue the RFI. If you have an additional question, just ask. It doesn’t bother us because we’re already saving a ton of time by not filling out a full RFP at this stage. Simple.
Rule 2: Specifically target who receives your RFP
At first blush, this approach — known derisively as “spray and pray” — seems like a great way for an organization to get a large variety of responses to a proposal. The more the better, right? We disagree.
Eating that much agency time just isn’t respectful. Plus, this approach skips an important step; if you’re not forced to limit your list in a thoughtful way, you won’t be considering what agencies might actually be the right fit.
But worst of all, by asking lots of agencies to respond, you’re optimizing selection for the wrong attribute. Instead of finding an agency that is thoughtful and skilled, you are selecting for agencies that are great at responding to lots of RFPs with low chances of success.
What to do instead: Pick the three most important attributes you are looking for in an agency (Location? Headcount? Specialization? Industry knowledge? Culture? Cost? etc). Don’t worry if you have more than three criteria, just pick the three most important ones to ease your selection process. Now, explore the partner directories on each of the technology platform’s websites you are considering against your three criteria.
Rule 3: Disclose your budget (yes, it's worth it)
The hesitation over disclosing your budget is understandable: If you disclose a budget, the project will inevitably end up hitting your budget ceiling. That is real and happens often.
So why should you disclose your budget up front? Because solving your problem is the thing that matters. You have decided to allocate a certain pile of dollars to solve a problem, so you should go out and find the best solution possible. Disclosing a budget is a simple filter for agencies to know whether they are the right agency to respond (they could be too small or too big), and helps improve the quality of responses by focusing on agencies that believe they can solve your problem at your budget level.
What are the challenges if you don’t disclose a budget and try to “get an honest price”?
One major risk is you get excited about an agency that is too expensive, and it’s too hard to make it work. You don’t want an agency that tends to work with larger clients to try to shoehorn their process into your smaller budget. The compromises required will always impact quality or end up within budget creep later in the project. You will be frustrated.
Another risk is being too tempted to proceed with an agency that is far under your budget to save dollars. What’s wrong with saving money? Absolutely nothing. As a business owner, frugality is my daily obsession. But there is a big difference between low-budget and value.
You may not have heard of them, but Capital Cities was one of the most successful businesses of the 20th century. Warren Buffett has described the Capital Cities CEO/COO team of Tom Murphy and Dan Burke as potentially the greatest managers in the history of capitalism. The company was famously frugal. In its early days, the main headquarters building was in need of a paint job. Instead of painting the entire building, Tom Murphy decided to paint only the wall facing the street. Advertisers (prospects) never saw the other walls, so why bother spending the money?
And yet, Tom and Dan never hesitated to spend money to improve quality (Capital Cities owned regional TV stations), like investing in talent and acquisitions. Why? Because it is important to spend money on what matters to your bottom line. That is the difference between being cheap and providing value.
Cheap is when the value you get is equal to the cost, value is when you get more than you paid.
What to do instead: Take your allocated budget for the project and disclose 85% of that value as the project budget. This way you have reserve for unknown unknowns (and there will be some).
Rule 4: Make the RFP concise
Brevity is a beautiful thing. Never forget that the purpose of your RFP is to elicit proposals from agencies that can solve your problem. And do it well. Do not include information in an RFP “just in case it’s useful.” Don’t worry about missing something; people can ask about in the questions and answer phase.
The added, sneaky benefit of brevity in RFPs is you can get a sense of how an agency thinks by the questions they ask you.
What to do instead: Play devil's advocate constantly. With each block of text, ask yourself, “If I was the agency responding, would this help me write a great proposal?” If the answer isn’t a quick yes, it’s a no, and you should not include that text.
Rule 5: Share questions and answers with everyone
A good RFP should have a process for submitting questions (by email—we are all busy). Typically, organizations send answers to the specific questions asked by the bidder and don’t mention the other questions.
What to do instead: Compile all of the questions into a single document, put your answers in this document, and send all questions and answers back to each bidder. This will improve the quality of all responses by providing information some bidders may not have thought to ask.
Rule 6: Turn a "looser" response format into part of the evaluation
The urge to detail the sections of the response, the order, the content, and the composition—is understandable. You want to be able to compare responses as easily as possible. The main problem with this approach is that you are optimizing for response evaluation efficiency rather than response quality.
When you are getting bids to install a pool, you don’t demand that every pool company bid in an identical format because you know it would be a waste of time. Why would a website project be any different? Don’t create extra work.
If you want high-quality responses, you need to let organizations respond the way they feel is best. Diversity of thought is a proven competitive advantage.
What to do instead: Make it clear what information you want the response to contain, but don’t be prescriptive about the response order, format, or composition.