As a supplier, how often have you received a bad RFP? A bad RFP can be poorly written. It’s more likely the case that it asks the wrong questions (and fails to ask the right questions). How do you educate your customers so that they can write better requests?
Put yourselves in the position of the buyer. They may lack access to market research. They certainly don’t have a lot of spare time. Perhaps they issued a Request for Information to try to overcome these deficits. Even then, the buyer may have gone down the wrong path.
Frequently, the only thing that the RFI manages to accomplish is to give buyers a false sense of confidence in their approach, even as they burn through supplier resources by making them respond. (We’ve written previously about how the typical RFI is a counterproductive waste of time and money.)
What if there were a better way for suppliers to educate their customers before the RFI gets in the way?
Do it properly and buyers can benefit from access to information, even as suppliers shorten and simplify the sales cycle.
From the supplier’s perspective nothing should be more important than educating the customer. Yet, according to prior research, only 14% of sales organizations think that “a majority of their customers are educated adequately.”
The article continues:
“Presale educational materials, for example, could convince potential customers to convert by making a complex, technologically advanced product more approachable. Organizations should focus on presale educational materials because products are becoming more complex and technologically advanced.”
This kind of customer education is vital for products that are complex and/or products that require behavioral modification.
It is something that can accelerate the customer from a lead to a closed sale, potentially even upselling the prospect to entertain a more comprehensive solution.
What would the ideal customer education tool look like, if we were to design one from scratch?
It should have at least the following four characteristics:
Simplicity: We would make it very easy for customers to obtain and trust the information they need to make the purchase. Suppliers should be able to impart this knowledge with little effort.
Speed: Customers should be able to obtain the information they need to make an informed judgment s. Suppliers should be able to establish whether they are the right fit for the customer’s problem on a timely basis so that they can optimize their allocation of sales resources.
Completeness: The information suppliers give customers should include everything they need to know, without the distraction of information they do not require, to make an informed decision that is correct for them.
Authority: The communication must convey to the buyer that the vendor has the authority and the leadership she can trust.
- Knowledge bases
- Video blogs
- Trade show appearances
- Case studies
There is nothing wrong with these, of course. People use them because they work. But they may not be the most efficient tools.
There is another way, although it might seem counter-intuitive.
Imagine a scenario in which an individual supplier could develop a “Model RFP” or “Golden RFP”. It would ask the questions suppliers think buyers should ask and only those questions. The supplier could pre-populate this Model RFP with their answers.
Once the salesperson has qualified the buyer as a potentially good fit, he could send the customer access to this document.
One of several scenarios could result.
The buyer may decide that she has enough information to decide. Using the Model RFP and its response, the line manager in charge of the purchase could conclude that she had everything she needed. If necessary, she might invite procurement to inspect her work. She then proceeds to a sole-source procurement.
If the buyer’s organization requires execution of an RFP process, the buyer could use the Model RFP as her own to execute a reverse auction quickly.
Or she may elect to develop her own questions, relying in part on the input of the Model RFP.
How do you educate your customers? Maybe you don’t have to. Perhaps the most interesting scenario would be if the buyer invited several suppliers to send her their individual Model RFPs. Instead of having a single, common RFP document to which every supplier responded, each vendor could simply send their Model RFP and their related answers. In reading multiple Model RFPs, the buyer would garner a tremendous amount of market intelligence from the questions that different suppliers included.
Instead of one RFP, there would be multiple RFPs. Suppliers could respond instantaneously with pre-set answers. It would be effectively costless to respond. Of course, the buyers would have to read through many more responses, but the buyer would consequently make a much more informed decision. One day this scoring could be automated, as well.
With the Model RFP approach, buyers get the suppliers to do all of the work. It is potentially much more informationally efficient and much faster.
EdgeworthBox is an exchange like the CME. Instead of developing liquidity in financial contracts, we focus on making acquisition of goods and services more efficient. Our model has the flexibility to enable the Model RFP approach, wrapped in a very friendly user experience.
Are you a buyer or a salesperson and you’d like to learn about how we can help you become more efficient? We would love to speak with you.