#73: Listen as Kathryn Bennett, Director of RFP Excellence at Loopio, discusses her experience at winning with RFPs. She explains how to streamline the RFP process, the differences between RFI and RFP, and how it applies to public and private procurement efforts.
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Check out the full transcript of this episode below:
The Sales Lift Podcast
How to Win with RFPs w/ Kathryn Bennett
Hosted by: Tyler Lindley
[00:00:00] Tyler: Hey, Sales Lift Nation, it's your host, Tyler Lindley. Today, I have Kathryn Bennett on the podcast. Hey Kathryn, how are you doing? It's good to see everybody today. Yeah. Great to have you here. Kathryn is the Director of RFP Excellence at Loopio and that's exactly what we're going to be talking about today. Is RFPs.
Kathryn. I've been in sales for a long time and I still barely know what that means. What the hell is an RFP? I think it means request for proposal, but what does that mean? Exactly
[00:00:30] Kathryn: RFP. It would be the request for proposal that we get from enterprise organizations typically, or. Entities a lot of times in the sales domain, you'll hear it referred to as an RFX, which kind of encompasses the entire umbrella of types of responses that they might be soliciting.
So there's things like security, questionnaires, or DDQ issues like qualifications, documents, really what we're talking about when we're talking about the RFX, our RFP process is a formalized procurement process. That's designed to advantage the buyer. By providing specific types of information. It's a little bit more complicated.
The sales cycle is typically a little bit longer than your usual sales process, and it requires a little bit more documentation simply because the entity is trying to do their due diligence by thoroughly reviewing their options. There's a lot that goes into it and I'm happy to discuss. RFPs and how to win them today.
[00:01:20] Tyler: Ooh. How to win them. I'm sure our audience will want to know all about that. Interesting. One thing you said there that I want to double click on advantage the buyer you say advantage of the buyer. Talk to me more about that buyers. Are they supposed to have an advantage? This seems unfair.
[00:01:34] Kathryn: In the RFP process, what it does, ultimately buyers are looking to save money by making more responsible decisions.
That's the point of a formal in-depth procurement process, like what we're talking about today. And ultimately when it comes down to it that the government buyers tend to save about 20% off the cost of any project when they use a formal procurement process. So a lot of us look at this and we think, gosh, it's such an onerous.
Burdensome activity, but really what it does is it gives the buyer the powerful information that they need to move forward with better decisions and it saves them in the longterm. And so when you're participating in a proposal, what you're doing is really helping that organization. Um, to get the best possible value for what they're trying
[00:02:16] Tyler: to buy.
That's awesome. 20%. I know you said that for government. Do you think that holds true for for-profit businesses as well?
[00:02:23] Kathryn: I would be surprised if it wasn't more than that. Oh really? Wow. We're talking about pricing strategy for proposals and this is something we're going to dive into can early in the chest, dive into it.
Typically when you're proposing using a request for proposal or some kind of formal procurement mechanisms, these are not small projects. People don't put out RFPs, RFQ. For $5,000, it upgrade. It's generally a large capital projects, large software expenditures, high risk campaigns. So when we're thinking about the way that we price this, oftentimes we're putting a flag in the ground to say, look, we have captured.
Of this magnitude of this size. So when we're thinking about pricing, just keep in mind that the buyer, again, on average saves 20% by using this procurement mechanism and adjust your pricing accordingly. Really what we want to do is make sure that we're communicating the best value through our RFP documents.
So there is a pricing strategy that will go into this. You're going to want to accommodate the buyer in this
[00:03:18] Tyler: case. Interesting. Are you saying. When companies are submitting to an RFP, they should take into account that 20% and the companies are seeking the best value to that means they should lower their normal rates, increase their normal rate price.
It normally, how should they go about thinking about
[00:03:32] Kathryn: that? Of course. And again, just keep in mind that the buyers in this case are probably being. More accountable for the bottom line when they're procuring through RFP. And so if you have the ability to be flexible on price while still really demonstrating value, if it's a strategic capture for you, that sets you up for more success.
I think it's also really important when we're talking about pricing strategy also is that one very compelling statistic is that RFPs aren't as competitive as we tend to believe for most public procurement efforts, there are only four 70. That's the average for on the outside. Sometimes you're seeing nine, although you may be lowering your price, your odds of winning are much higher when we calculate it.
It's not a straight across one in four chance. There are contributing factors, but you are often in a much more controlled environment because you've had to qualify to use. Attempt to propose to these folks. And therefore your pool of competition is much smaller and you are in a better position to win the business.
So again, public procurement efforts, you usually see an average of four applicants, sometimes only one or two other competitors. Wow. It's a pretty good deal. If you're in the early startup environment to think about presenting.
[00:04:46] Tyler: Let's talk a little bit about that. A lot of our listeners out there are skewed toward startups and scale-ups, they've got product market fit, but they're still trying to figure out how to grow their revenue engine growth, their sales efforts.
Should they be using RFPs? Does that work? In all cases, there's only work if you're selling to enterprise or government, how should they be thinking about RFPs as a strategy for.
[00:05:05] Kathryn: One of the first things that you need to consider in this instance, how do I find the opportunities? If I'm selling into the business community?
Usually I have to get invited to submit to an RFP. In this instance, it may take additional time and you need to target those specific businesses through a capture management plan so that you can get invited to the table, walking it back. You need to start thinking about how your business developers are treating those longer term, big fish type of opportunities to get involved in RFPs as a startup, when it comes to the public sector.
All you have to do is look online. There are so many portals and so many different opportunities that are listed through state, federal local websites. I used to work for an asset management software company. It was very easy for us to find opportunities. I don't believe that it's ever too early to start thinking about proposals.
And here's why it's because proposals offer secure ways to get money into your. The government has set aside that money it's been allocated. It's not discretionary spending. The taxpayer says that we are going to pay for this. So the project isn't at risk from that perspective, number one, lower risk, number two, the dollar value of these contracts.
Although again, you may be discounting your pricing on the larger scale, the sheer revenue that comes along with the multi-million dollar projects, but how do you position yourself to be competitive? Because Hey, I'm startup acts. I've only done a few projects. I really don't know. Okay. Here's the hack for that is if you have the ability to tackle.
On with a larger customer, for example, say I'm a plumber and there is a company that's building a police station. And I say, Hey, constructor X, I would like to do the plumbing. And here's my very good rate. And here's my very reliable reviews. And here's how I'm going to support you. You can get one small component of a larger project that helps you build your past performance and get your resume built up just like you might do for an individual job.
And then when the time comes for us to start seeking independent projects for our plumber out there in the world to do the plumbing for the city of Milwaukee public works. Now we have that experience with the other entity partnerships are, if you're in that early startup environment and you're looking to win through RFP partnerships should be a key component of your strategy.
[00:07:12] Tyler: One thing you mentioned a minute ago was the capture development plan, which it sounds like that's where there's the government side of RFPs, which those are publicly listed on government websites. And then there is the private side where it's invite only, or you have to be in the know to find those out.
Is there a specific strategy you'd recommend for this capture development plan or what have you seen as some best practices? Typically
[00:07:33] Kathryn: when we're going through the RFP process, we think of it in terms of three stages. First is the capture phase before the RFP is released. So once that document hits the streets, if you're responding to it cold, you're probably at a disadvantage.
So just a red flag, real quick list, small departure here, a red flag is if a company calls you up and they say, Hey, can you respond to this RFP? But you've never talked to them before, because what they're probably doing. Only complying with internal regulations that required to get three to five bids.
Please don't be hopeful if they just call you up and ask for a
[00:08:03] Tyler: cold Bish and put an RFP together for you. Yeah. Let me spend all this time doing that
[00:08:09] Kathryn: and RFPs costs on the order of five to $10,000 of labor. Materials put together. They're not a small endeavor. And so at least to those for larger enterprise efforts, that's why the capture process is so important.
It's no different than if you're going to look for a job for yourself. And you're probably going to prospect into a certain company is saying, gosh, I'd really like to work there. Let me get to know who the people are. Let me learn about their products. Maybe I'll set up a virtual coffee with someone to get, to learn them.
It's very similar to the traditional sales process, various emotionally, if you're trying to find yourself a job. And so capture management helps us warm up that lead so that when the RFP does hit our email inboxes, it's not just compliance requirement from the buyer. It's actually guests. We are engaged.
We're familiar with your product or service, and yes, we really do want to solicit your. So the third stage of that, then it's going to be probably your demo phase, your interviewing phase and your close out and debrief phase. So again, the three phases of capture RFP completion and then demo or interview.
[00:09:10] Tyler: Gotcha. Are the buyers typically whittling down the competition at each of those stages or these stages where it goes from 10 to five to one, or they keep an everybody in the game throughout this process?
[00:09:21] Kathryn: Yeah, that's a really good question. And it depends a lot specifically when it comes to the government, it can be a legal requirement that you shortlist three firms.
We can think of this a lot as a candidacy for a job. There are different stages of the interview process, similar to the RFP process. And in fact, a lot of entities will put forth an RFI, which is at the top of the buying funnel request for information as an RFI. And they're just trying to see what's available on the.
And maybe you fill out the RFI documents and you never hear from the company again, that's also pretty common. So don't be discouraged in that. And
[00:09:52] Tyler: it sounds like an RFI. Is that a more streamlined process than the RFP? You mentioned the RFP can take a lot of time, five to 10 K to put one of those together of internal labor RFI is that.
Higher level, just some basic information or is it still just as
[00:10:05] Kathryn: extensive? It goes in down the sales funnel and down the marketing funnel in terms of the amount of effort, the three main types of documents that are going to see in this context will be the RFI, which is at the top of the sales funnel.
It's again, the buyers just doing research, the public, going to send you a questionnaire with some check boxes that you need to fill out and basic information to find out what your product or service offers that they might need. Then they will use that information. To craft the RFQ stage. So RFI and RFQ stages don't always happen.
Okay. They're optional.
[00:10:34] Tyler: They're for
[00:10:35] Kathryn: very conscientious buyers or very regulated buyers. Then they may send it out to RFQ, which is a request for qualifications, where we get a little bit more information. Now we're learning more about your past performance. We're learning more about the team you might use to implement the software RFQ.
Neither of those include. Um,
[00:10:51] Tyler: traditionally it's just information on the actual organization. What kinds of
[00:10:55] Kathryn: things do you sell? Where are you located? Can we contact you at certain times of the day, this kind of thing. But then by the time you get to the RFP, you're building on those foundations and you're moving down the marketing funnel.
And by the time you get to RFP, the buyer has decided that they are actually going to buy an RFI stage. They may not have allocated the funds yet, but by the time the RFP comes out, it's very low risk that the funds will go away, but they are going to be asking for price at that time. And again, We'll be building foundations in order to refine the message.
So you present the
[00:11:23] Tyler: RFP. Got it. That makes sense. Once we get to that, there may be an RFI. There may be an RFQ. Now we're at the RFP. How do we know if it's worthwhile? You mentioned the cost of going through that, especially for a smaller organization, they may have to pick and choose. How do you know if an RFP is going to be worthwhile?
What should you be looking for in that RFI, RFQ, RFP or FX to make sure that, okay, this is worthwhile for us to even throw our name.
[00:11:48] Kathryn: Very good question. And I think it's particularly salient considering the facts that many sales leaders will try to chase every RFP that comes through the door because they see it as a marketing opportunity.
And I just really want to make it clear that proposals by the time RFP has come out, you no longer have the opportunity to market. It is now a dedicated, allocated amount of money that's available and the funds are out. The marketing is done. The sales is in full swing. What we call a go? No go process is the most rigorous approach.
Just like you would qualify a traditional sales lead using your ideal customer profile. You're going to use the same types of approach with. If you've never had contact, I mentioned earlier, if they just send you an email, say, Hey, apply for this. Maybe it's not the best. I don't know who you are. Maybe not.
If you've never had contact with the buyer before, that's a huge red flag, but also do they fit into your traditional market? That's a hundred thousand population municipality and you traditionally serve 5000% municipalities. Are you actually going to be. Uh, furthermore, and this is one that we miss a lot when we have this discussion, but do you have the staff to complete the project?
It's extremely important because you may have the staff to complete the RFP and I have seen it happen where organizations say, oh yes, we can do this. And then the implementation gets delayed for two years and oh yeah. Having a bad experience through formal procurement process can end up in federal records.
You really want to make sure that you're well positioned to actually complete. We're thinking about, does this fit our ideal customer profile? Are we able to complete the proposal document itself? Do we have the staff and do we have the staff to complete the project?
[00:13:27] Tyler: That's awesome. One thing that in my very limited knowledge of RFPs, one common school of thought is that RFPs are already decided on before it even gets to RFP that, oh, we've already earmarked this vendor, but.
Some extras just to check that box and stuff. Do you feel like that's always the case you feel like it is a competitive process typically? Or do you think that a lot of times when governments or enterprises are putting out an RFP, they already have an asterisk by their preferred vendor, unless someone else really Wells them in the process?
[00:14:00] Kathryn: I think it's really important to differentiate in this case between public and private procurement efforts, because private procurement efforts, it's entirely possible that that's the case. I do think that that's a superstition though, to some extent. And I did use to subscribe to that. People will try to read into RFPs and say, oh, this is a sign that our competitor got there.
First. A lot of people share. Between companies between the municipalities, the same document makes the rounds between county a county B there's a lot of superstition. Do I advocate for chasing cold opportunities? No, just like I would not advocate for chasing cold sales opportunities that don't fit our market.
That it's not a good fit. First of all, private sector. Buying, they didn't have ethical rules around it, but they don't have any legal prohibitions against public sector buying. If there's even a whiff of impropriety about the fact that maybe this person is in there influencing the sales process unfairly, those procurement people's jobs are at risk.
And in fact, they could be legal liability. I would say when it comes to public procurement, yes, it makes sense to warm up. But no, the decision is not made before you walk in the door, which is why would you craft your proposal? Can I jump into the three ways
[00:15:07] Tyler: to win? Yeah, sure. Let's dive in. Yeah. Three ways to win an RFP.
What are the
[00:15:11] Kathryn: three components that you need to win
[00:15:13] Tyler: the RFP? I have no idea. Why don't you tell us Kathryn? There we go.
[00:15:16] Kathryn: They're super easy. Think of it like a three legged stool. Number one, compliance with the documents. The documents are going to require you to maybe use aerial size 12 font and not include any more than 20 pages and get a signature on.
Make sure you just check all the boxes that they ask you to check. You include all the forums. It's a gimme, read the proposal, include all the forms. It should be
[00:15:35] Tyler: a gimme.
[00:15:37] Kathryn: If you lose on compliance, that's your own fault.
[00:15:39] Tyler: You can get a bigger issue.
[00:15:43] Kathryn: I'm not going to say I've never, I forgotten some forms in my life.
[00:15:49] Tyler: So compliance is number one. Yeah. If you don't
[00:15:51] Kathryn: comply, it makes it really easy for them to say, because a lot of these people are inundated with proposals for certain projects. Okay. You didn't comply now. I just don't even have to look at this. It just makes it easier for me to kick this out of the system.
So just comply with what they ask second. It has to be on point. We've already talked a little bit about the strategies behind that, but price, obviously specifically for government agencies. If they're looking for a low bid, you have to take them to a council, the right price, the right documents, the third, and this is very common among all sales processes.
So everybody should know how do I communicate value and solve the customer's needs. Now, the way that you can get the information, if you're applying for an RFP and you know the customer, but you're not best friends with them, first of all, you will often find clear. In the RFP itself, they often have a background section that describes why they are choosing to buy now why they are choosing to buy this particular thing when the decisions were made and you can go back and reference in the case of public procurement city, council, state records, you can go and find those things.
Second, one of the least utilized and most powerful tools you have in an RFP is the question. Okay. Period. Hmm. So what you can do for private procurement, you can often just email the person who's leading the charge and say, Hey, can I ask a question about this? Maybe they'll put it out to the rest of the buyers.
Maybe not for public procurement. You need to be cognizant of the fact that they will publish your questions that you ask, but you can strategically ask questions that torpedo your competition or that support your position. And you can make yourself seem like a more credible and useful vendor during the QA stage three ways that you would.
Complainants number two, price, number three, solve the customer's problems and describe it clearly.
[00:17:29] Tyler: Awesome. Cool. Simple enough. All these lists, you're making it so easy for us, Katherine. I appreciate it. Heather, what haven't we talked about, a lot of our listeners are gross stage companies, their owners, CEOs, sales leaders, out there.
Anything else that we haven't talked about as it relates to RFPs that you think that our audience should know about?
[00:17:47] Kathryn: I think it's really important if you intend to move again into the enterprise space or if you're selling. Space with governments that you have a good content management system. And so I represent Lou PO, we are a proposal automation, software and technology, and we integrate with Salesforce and a variety of other products that are out there on the market today to help you manage your content.
The earlier that you start managing content for your sales. And proposal efforts, the more reliable and sustainable your processes will be. And so this doesn't pertain necessarily just to loop you. There are also tools like seismic that help us support content management, but here's what happens is if you start applying to RFPs and then you start wasting time by not being able to find the information that you need later on what you're not doing is setting a strong foundation for yourself for the future, whether it's Lupino or whether it's another content management system.
Think about your technology. Early and to invest in an early we advocate that if 30% of your revenue is coming in through RFPs, it's probably time to start thinking about.
[00:18:49] Tyler: Gotcha. Awesome. That makes sense. And we'll link to the Loopio website. If folks want to check out more about that. Catherine, also just a side note here, strong woman that should a little bit of your background.
Tell us a little bit about that. I saw that in your back. Can I get,
[00:19:01] Kathryn: so I am actually a world record holding strong woman athlete. Yes. I hold a world record in a grip discipline that's grip sport, where we grab strangely shaped objects and just pick them off the ground. Oh wow. Which is pretty much the same as strong man.
We just pick up rocks and. And either walk around with them or put them right back down. Very cool. Thank you. I've been doing strong man for about four years now. I'm headed to the national competition in June and I am also going to have my book dropping on the, at the national contest is going to be called working title is productive pain, but it's going to be talking about how strong men helped me succeed in my career.
[00:19:37] Tyler: awesome. Yeah. We'll definitely link to that and yeah. Wish you all the best of luck at the competition and with the book launch, Kathryn, if my listeners want to find out more about you online, how can they be.
[00:19:46] Kathryn: If you're on Instagram and you want to see wild and ridiculous feats of strength, you can join me at KB lifts.
That's at K a Y B E lifts. And then if we want to join up on LinkedIn, that's a great place to find me. It's linkedin.com/ Kathryn Bennett writes. One word. I'm happy to set virtual coffees. I'm happy to chat about RFPs at any time and having to answer your questions and plug in with the right resources.
So let's get going.
[00:20:10] Tyler: Awesome. I know where to send folks. Now, when I have questions on RFPs, Catherine's dig so much. You truly are the director of RFP excellence. I see. Now why you have that job title. Thanks so much for coming on. Cheers. Thank you. All right. Thank you. Thank you so much for listening to today's show.
You can find all the links discussed and the show email@example.com. That's T H sales, S a L E S. Lift L I F t.com have questions for me. Email firstname.lastname@example.org. We look forward to seeing you back here next week, and we hope today's show brings you the sales lift. Your business needs.
Remember ideas. Plus action equals. You've got new ideas. Now it's time to take action and the results will fall. See you
[00:21:03] Kathryn: next time. .
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Don’t feel like listening? Read the Episode Cliff Notes instead below:
What is RFP and Why Does It Matter? (0:22)
RFP is the request for proposal that you get from enterprise organizations or entities often in the sales domain.
You’ll hear it referred to as an RFX, an umbrella of types of responses that they might be soliciting.
So there are security, questionnaires, or DDQ issues like qualifications and documents. The RFP process is a formalized procurement process designed to advantage the buyer by providing specific types of information.
It requires a little more documentation simply because the entity is trying to do its due diligence by thoroughly reviewing its options.
In the RFP process, what it does, ultimately buyers are looking to save money by making more responsible decisions.
We want to make sure that we’re communicating the best value through our RFP documents.
You are often in a much more controlled environment because you’ve had to qualify to attempt to propose to these folks. And therefore, your pool of competition is much smaller, and you are in a better position to win the business.
RFPs in Startups and Scale-Ups (4:46)
One of the first things you need to consider in this instance is how you’ll find the opportunities. For example, if you’re selling into the business community, you usually have to get invited to submit to an RFP.
You may be discounting your pricing on a larger scale, but how you position yourself needs to be competitive.
You can get one small component of a larger project that helps you build your past performance and get your resume built up. Then you have that experience with the other entity partnerships.
So being in that early startup environment and looking to win through RFP partnerships should be a key component of your strategy.
RFPs cost around $5k to $10k of labor and materials put together, and they’re not a small endeavor. And so, at least to those for larger enterprise efforts, that’s why the capture process is so important.
Maybe you fill out the RFI documents and never hear from the company again. That’s also pretty common, so don’t be discouraged.
RFI vs. RFP (9:52)
It goes down the sales and marketing funnels in terms of effort. One of the three main types of documents in this context will be the RFI at the top of the sales funnel.
RFI and RFQ stages don’t always happen. They’re optional and for very conscientious buyers or regulated buyers.
By the time you get to the RFP, you’re building on those foundations, moving down the marketing funnel, and the buyer has decided that they are going to buy.
Many sales leaders will try to chase every RFP that comes through the door because they see it as a marketing opportunity. Kathryn makes it clear that by the time RFP has come out, you no longer have the chance to market.
Public vs. Private Procurement (14:00)
It’s vital to differentiate between public and private procurement efforts.
First of all, in private sector buying, they don’t have ethical rules around it. But they don’t have any legal prohibitions against public sector buying.
If there’s even a whiff of impropriety about the fact that maybe this person is in there influencing the sales process unfairly, those procurement people’s jobs are at risk. And in fact, they could be a legal liability.
When it comes to public procurement, it makes sense to warm up. But no, the decision is not made before you walk in the door, which is why you would craft your proposal.
For private procurement, you can often email the person leading the charge and say, “Hey, can I ask a question about this?” Then, maybe they’ll put it out to the rest of the buyers. That might not be true for public procurement.
You need to be cognizant that they will publish the questions you ask, but you can strategically ask questions that torpedo your competition or that support your position.
If you intend to move into the enterprise space or sell space with governments, you have to have a good content management system.
The earlier you start managing content for your sales and proposal efforts, the more reliable and sustainable your processes will be.
Kathryn Bennett, CPSM, is a proposal management expert and lean six sigma green belt with more than 13 years of sales and communications experience. As the Director of RFP Excellence at Loopio, she promotes best practices, advocates for the use of marketing automation, and spreads the good word about process improvement.
Kathryn believes that every proposal manager deserves a 40-hour workweek. In her free time, Kathryn is a world-record-holding strength athlete and competes on the national level in the sport of strongman.