Have you ever received a request for a proposal?
Although it may seem like a good opportunity, there are several reasons why sending that proposal could be bad for your consulting business.
Read this article to hear my top reasons to avoid responding to RFPs.
#1 They can take a long time to write
Have you ever sent a proposal to a client that didn’t go anywhere?
I know I’ve been there and it’s not a great situation to be in.
Proposal writing can be a very time intensive task, so it’s important to only write them when we stand a good chance of securing the work.
So one of the biggest reasons to avoid responding to requests for proposals is that they're probably not the best use of your time.
#2 You’re almost guaranteed to be up against competition
When you receive a request for a proposal, it's probably safe to assume that the client has also asked at least two other suppliers.
This fact alone reduces your likelihood of securing the work before you even begin the proposal writing process.
So the second key disadvantage of responding to a RFP is that there's a good chance you'll be competing with other businesses for the project.
#3 The client probably views you as one of many suppliers
This follows on from the previous point. When a potential client asks multiple suppliers for proposals, it’s likely that they do not see you as being meaningfully different from the competition.
So this is another reason to be cautious.
The real goal is for potential clients to view your offering as the best viable choice because this puts you in the strongest position.
Not only does this enable you to take the lead in projects, you can also charge higher fees and be selective with the clients you work with.
But if a client sees you as comparable to your competitors, it’s clear that they do not view you as the go-to expert in your space.
#4 The client may have already chosen the supplier for the project
Just because you've received a request for a proposal doesn’t mean the client hasn’t already made the decision about which supplier they are going to use.
In some organisations, it's part of their policy to procure at least three quotes. This is therefore an unavoidable aspect of their purchasing process.
So in some cases, the client has already decided which supplier they want to go with and sending out the RFP is merely a paper exercise.
However, if you are the supplier they have in mind, this will work in your favour. But otherwise it's a complete waste of time to send that proposal in this situation.
#5 The client may try to dictate the project
Last but by no means least, one of the key disadvantages of the notion of RFPs is that the client has probably self-diagnosed the problem they are experiencing and already decided on the course of action they want to take.
And this presents a risk that they might try to dictate the entire project.
This isn't a good situation to be in because they're more likely to view you as a vendor rather than an expert practitioner.
Finally, as the client has probably already developed the project brief, they may be inclined to favour the lowest priced option (if they haven't already preemptively selected the winning supplier as mentioned in the previous point).
Conclusion and action point
Although responding to RFPs can be tempting, it’s important that you take a step back and really consider the likelihood of securing the work before you invest time and effort in writing that proposal.
Remember the entire proposal requesting process means the potential client is dictating the terms and you could be treated as a commodity.
So instead of playing the RFP game, think about how you can position yourself as the go-to expert for delivering a certain outcome.
The goal is to create a distinct, one-of-a-kind service that isn’t easily interchanged with your competitors.
This is how you get clients to come to you rather than going to them.
