November 1, 2010

Responding to Web-based RFPs

Sometimes you do everything right but it all comes out wrong. You write a fabulous proposal and you still lose. True, it’s not fair.

That’s our topic this time.

Regards,
Tom Sant


Responding to Web-based RFPs

A proposal specialist at a major health care company recently sent me a copy of an RFI (request for information) his team has to fill out. It’s a Web-based form that’s required of all health care companies who want to bid for contracts from any of the dozens of companies who have agreed to use this thing. Called eVALUE8, which is too cutesy to be tolerated in a license plate much less a business document, it’s basically a big checklist.

The document starts out, “Members of the National Business Coalition on Health (NBCH) and Watson Wyatt (WW) eValue8 group have embraced a common set of core health plan performance expectations and have worked collaboratively to develop the 2006 NBCH/WW eValue8 Request for Information (RFI).” Just reading that opening sentence, you know we’re in trouble. The sentence is 40 words long, contains three acronyms, not counting the “eValue8” thing, and uses some pretty bizarre business clich├ęs. And how about the weird syntax? The members claim they have “embraced” a “set of core…expectations.” I’d probably buy a ticket just to watch them do that.

Anyway, lots of big companies are involved in this thing, so healthcare companies feel like they’re bullied into filling it out. It consists of page after page of tiny fields where you enter all kinds of obscure data: the percentage of your practitioners who work in a staff model or in a captivated multispecialty group, or in a captivated IPA, whatever that is. Or the number of plan members you have enrolled in a commercial HMO/POS arrangement, or in a commercial PPO, the total number of Medicare members, and so on. It goes on this way for page after page, little boxes and lots of numbers. All in all, it’s over 150 pages long!
If nothing else would do it, filling out eValue8 would make you eager to see healthcare reform in this country.

What about you? Are you getting similar RFPs and RFIs in your business? What should you do with them?

One tempting answer is to pitch them in the trash. Requiring vendors to fill out reams of data and complete spreadsheets on pricing is a lousy way to buy anything. I've always believed that this kind of granular RFI or RFP really gets in the way of making an intelligent buying decision. And there are a couple of sneaky aspects to them that make them even less palatable.

First, a checklist RFP is based on the assumption that what you and everybody else in your industry offers is a commodity. For these buyers, value has no value. They deny the relevance or importance of any value-added components, any differentiators, and any distinctions in service delivery models. They refuse to acknowledge that prior experience is a good thing. Typically, all they want is pricing data and confirmation of technical specs. With the increased power procurement groups have grabbed during the recession, we're seeing a lot more RFPs that are written this way.

Second, this kind of RFP is often written by a consultant or some other third party.
Unfortunately, it’s in the consultant’s self-interest to make the buying process as complex as possible and to minimize the meaningful differences among vendors. The consultants prefer to keep the vendors at arm’s length from the actual customer and to focus the customer’s attention mainly on the consultant’s ability to manipulate a huge amount of data. That’s why the RFPs they issue are so complex, why they give you so little room to respond, and why they focus on technical details for the most part.

So… back to our question. What do you do with this kind of RFP? Well, it really might be in your best interest to refuse to respond to them. That decision depends on a number of factors, but the volume of effort involved in responding compared to the probability of winning profitable work makes them pretty unattractive.

This is particularly true if you have received the RFP from a client with whom you’ve had no previous contact. Statistically, your chances of winning any business in that situation—you’ve never talked to them, the RFP arrives out of the blue, and it gives you no room to make a persuasive business case—is less than 1 in 20.

It’s also possible you’re being used. Maybe the company issuing the RFP already knows who they want to hire, but they have to get three other bids. Or maybe they want to beat up their current supplier on price. Any way you look at it, it’s not a very good investment of your time, is it?

But let’s suppose you have to respond to it for whatever reason. Is there any way to make your proposal stand out a bit?

Well, first of all, if there are any areas of the RFP where you are allowed to enter free-form text, make sure you write as persuasively as possible. Second, write a well-structured, persuasive executive summary and use it as the covering e-mail when you submit your completed RFP on line. Maybe nobody will read it, but it’s not that much extra work and it might help. Third, if you make it past the first stage of reviews, seek a face-to-face meeting with the client and develop an absolute killer proposal presentation, one that emphasizes your understanding of the client’s needs, the value you can deliver and the differentiators that set you apart.

I hope these form-based RFPs are a passing fad, because it doesn’t seem to me they serve the interests of either the buyers or the sellers.

One bit of good news in all this is the fact that Sant Suite can automate your response to forms, even if they’re in spreadsheets or on the Web. At least that way you’re spending a lot less time on them! You can see an interactive, Web-based demo of how it works at our site, santcorp.com.