Stop competing on price! Learn how to combat commoditization — exemplified by the Makino’s effect on the manufacturing industry.
Killing the RFP: Part 3 of 3
Kinesis is in an enviable position: we’ve crafted a business model that steers well-clear of the RFP treadmill. While many businesses aren’t so lucky, I've made it my mission to help rid the world of RFPs. If you’ve had years of chasing RFPs and are ready to move on, start here:
- Don’t respond to red flags. If you must respond to RFPs, or are making an effort to phase them out, begin your process by eliminating all RFPs that do a poor job of defining the client’s problem. Vague goals like, “build a website that establishes Acme co. as a leading brand” are unachievable goals doomed to fail.
- Identify the source of the RFP. Find out early who wrote the RFP. Talk to them. Determine how many firms have received the RFP. Ask them why they picked your firm – what made you stand out? If you discover shotgun approach to selection, pass on the RFP.
- Craft a “no RFP letter.” Politely inform prospects why you are no longer responding to RFPs. Frame the communication in terms of how thoughtful RFP responses take considerable time, and that the demand for your business’ services has resulted in prioritizing client-related work. It’s also advisable to (politely) allude to the fact that RFPs don’t foster a deep understanding of the client’s needs and that your clients value long-term partnerships. Here’s a sample letter you can modify for your business. (Big thanks to Eric Karjaluoto for his excellent wordsmithery).
If you’re committed to abandoning RFPs entirely (congratulations!) it’s time to make some substantial changes to your business. I suggest following the advice of John Warrilow whose book, Built to Sell, outlines a fantastic framework for escaping the RFP trap. I’ve abbreviated Warrilow’s advice, and added my own thoughts:
- Differentiate like your life depends on it. If your business’ services are a mirror of the competition, it’s time to reinvent what you do. Spend significant time understanding how you can offer clients a profound answer to their biggest needs.
- Define your process. Successful businesses have processes, but winning businesses leverage their processes day in and day out. Make sure your processes add tremendous value to your clients, employees, and community.
- Name your process. If you’re a professional service provider, begin to think about what your business provides as a series of “products” that you and only you can provide. Kinesis, for example, is in a crowded field – marketing. But, by using a proven process and tool set - the Kinesis Marketing Blueprint and Strategic Focus Plan - we ensure that our clients achieve their goals.
I’ll end this series with with a few words of wisdom from the owners of the Seattle-based architecture firm, Build (here's a photo of some of their amazing work)
The northwest has an oversupply of architectural firms, but owners Kevin Eckert and Andrew van Leeuwen have managed to survive (and thrive) in a difficult economic climate. Last week I asked Andrew his perspective on RFPs. Surprisingly, Build doesn’t respond to RFPs – their success is built on a smart business model that emphasizes transparency and client collaboration. When asked about the industry as a whole (architecture tends to be a field rife with RFPs) here’s what Andrew said:
From what I hear out there (we’ve got several friends who do larger public/institutional work) if a firm has to actually submit an RFP in this financial climate –they’re already out of the running. The projects are won through personal relationships with people/companies and the RFP process is just a post-decision formality. Which makes sense, as most projects are being groomed by hungry architects long before they go public.
Moral of the story? R.I.P. the RFP.