“Think creatively what you can do during each step of the process.”- Mark Schenkius in today’s Tip 823
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The Other Side of Sales
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823: The RFP Process Explained (Part 1)
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip is part two of a two-part series from Mark Schenkius. Mark is the founder of ROI 10 where he helps sales professionals get better at dealing with buyers. He’s also the author of “The Other Side of Sales,” where he shares his perspective after 15 years in procurement. Here he is:
Mark Schenkius: Hi everyone! I’m back with part two of the 16 steps of an RFP process that you didn’t know existed. Last time I covered numbers 1 to 8, so I encourage you to listen to my previous sales tip if you haven’t done so already. Today, I’ll be covering steps 9 to 16. These are the steps a buyer has taken before you actually get to see the RFP. They are in chronological order. Although the actual process can vary from buyer to buyer.
Step 9: Specification creation. As soon as a time plan has been created, the team can now develop the specification. As a minimum, this should include three elements.
- A technical specification, which details all the operational and technical details of what needs to be bought.
- A commercial specification that includes all the terms and conditions as well as the contractual element.
- A quality specification, which focuses on all the specific quality requirements that you need to adhere to.
Step 10: Spent calculations. In order to calculate the savings achieved by running the RFP, a buyer needs to understand their spend figures. The two most common ways to make this comparison is to compare to last year spent or to plan budgets.
Step 11: Agree on selection criteria. Next up in the process is how the team decides on what basis they will make the final decision. This information is absolutely crucial for you as a seller. Is at 100% based on pricing or to service, quality, cost of change, sustainability, or even cultural fit play a role here.
Step 12: Contract creation. In the background, all the contractual requirements are put together. Sometimes buyers use template contracts in specific cases, a contract will be tailor-made. It’s important to know that professional buyers send a contract beforehand. So they have more leverage to negotiate. It’s harder for buyers to negotiate the contractual terms after a deal has been agreed.
Step 13: Tender tool selection. At this stage, buyers will select a tool for running the RFP. It can be as simple as an Excel spreadsheet. Although these days there are various used sourcing platforms to choose from.
Step 14: Supplier long list creation. Here, the buyer will draw up a list of suppliers against the minimum and preferred requirement. This is called a long list. Depending on the market this is usually a list of 10 suppliers or more.
Step 15: RFI set up. An RFI is a request for information and aimed at doing a pre-selection of suppliers prior to inviting them for the RFP. The RFI usually contains questions on quality surface, financial, sustainability, and more. After an RFI buyers will have a shortlist of suppliers they want to invite for the RFP.
Step 16: Communication plan creation. The last step in the process is a communication plan. This includes both internal and external communications. It’s about defining when and what information you are going to share with your stakeholders. After this step, the RFP process will be visible to you as a supplier, so that you’ll receive a first notification and perhaps even all the specifications.
So why am I sharing all of this?
Well, it’s because many sellers believed in negotiation starts as soon as they received the RFP. So after step 16. I’m just giving you a different perspective that this is actually not the case. Throughout the 16 steps, there are many possibilities to influence the RFP process and decision-makers. Think creatively what you can do during each step of the process. Happy negotiations everyone!
Scott Ingram: For more insights from the professional buyer’s perspective. Definitely check out Mark’s book: “The Other Side of Sales,” and as always we’ll have links to that and more for you at DailySales.Tips/824
Once you’ve done that. Be sure to come back tomorrow for another great sales tip. Thanks for listening!