Customer expectations and best practices when answering an RfP

Sharing what I learned as a Sourcing Advisor

Influenced and supported by Simon Masterton, Tony Sykes and Harald Viehweger

tl;dr: Always try to understand what your customers want to achieve with the tender. Are your answers and your actions addressing their needs and expectations? Have you taken care of politics and formalities? If you are not sure, keep on reading.

Introduction

During the RfP process, certain customer expectations, best practices and formalities apply. If you are prepared, your experience will be much smoother and you will have a higher chance of winning.

I spent five years of my professional career as a sourcing advisor, helping customers to manage their outsourcing initiatives. My tasks included defining sourcing strategies, writing RfIs / RfPs, supporting supplier selections, executing due diligences, preparing and executing negotiations as well as accompanying transitions to suppliers.

The tenders ranged from medium-sized full-scope IT outsourcings to enterprise-grade, global IT operations deals across various industries. Today, I observe and support such deals from a vendor perspective at Google.

Below learnings are based on my personal failures and successes throughout the years. Some of them may sound obvious. They need to be addressed nevertheless.

I am strongly convinced those insights are applicable to your IT-related RfPs or ones in a different context. I do not especially address RfIs or RfQs (see further reading), yet most of the recommendations would apply also.

This article is structured around customer expectations. The sections are:

• Documented formalities of a tender
• The customer tender team
• Communicating with the customer
• The RfP answer itself
• Customer evaluation criteria
• Marketing material
• Your team

Customer expectations

Enterprise customers usually have a rather strict and defined process in place when it comes to RfPs. The process is often not led by the buying department, but by procurement. This already makes a huge difference in how to approach the RfP or process. The bigger the customer organization, the more overlapping functions you find. Smaller customers have a more streamlined approach, avoiding overhead and redundancies.

• Buying department led
  If you bid for a long-term relationship and / or a complex transformation ahead, the more likely will be the shift towards the buying department
• Procurement led
  If you bid for a commodity product — which is easy to describe and standardized in your industry — the more likely will be the shift towards procurement led. Usually compliance and audit requirements will be more strict (e.g. in financial services, medical or pharma)

Often customers rely on external sourcing and legal advisory from the likes of ISG or KPMG. This can be very beneficial to you, as those advisors will help to streamline and structure. They are also good at communicating to involved parties, with a few exceptions of course. Use them as a translator between customer lingo and yours where you cannot map it out on your own. Particularly in clarifying the needs and motivations of both sides.

Documented formalities of a tender

There are some simple rules to stick to when answering the RfP. Most of them are based on common sense, whilst others might be defined specifically by your customer. It is vital to follow both.

Part of every RfP issued by the customer should be a document describing formalities, structure of the expected answer and key dates. If there is no such document in the tender documents received, reach out to your customer and ask for it.

Key is to:

• Read the document. Then read it again. Then make everybody in your team answering to the RfP read it. If you can, organize a reading session with the customer. You will avoid misunderstandings, clarify questions informally and also get additional insights on motivations and complications behind the tender
• Have somebody outside of your bid team being responsible of taking care of described formalities and maintain an overview of dates and deadlines. Let’s call this person “RfP Manager”. He/she should read the document again from time to time and definitely before filing your answer.
  This advice might sound excessive, but it is the only structured approach of making sure you meet the expressed customer expectations, adhere to your internal guidelines and interests and do not miss any deadlines. If you are not setup that way, give this responsibility to a bid team member
• Structure your answer in exactly the way the customer asks you to. Even if this would be contradicting to your approach, the structure of your internal organization or tender team, or common sense. Do it anyway.
  The customer usually has a reason for the given structure. E.g. certain information like pricing or staff impact must only be seen by authorized customer characters, specific customer staff will read only certain parts of your answer, or the breakdown follows their assessment guide (see next section).
• If you really believe that it is necessary to deliver a proposal in an alternative format, do this in addition to delivering a compliant proposal. Explain the customer in advance why you do this (e.g. better service, lower cost, higher quality) and why you believe the given structure is an impediment to the customer. Then the customer will likely read your non-compliant version and it may influence them whilst they use their formal methodology to judge your compliant response
• If your proposal is towards the public sector make sure that you comply 100%. There is no room for deviation in the public sector as the rules of engagement are far more strict for your customer
• Respect the customer communication chain given to you (see “Communicating with the customer”)

Customer tender team

The team at the customer comprises various functions and departments. This includes the buying department(s) as well as support functions like finance, legal and procurement. In my cases the buyers have been infrastructure and application leads, heads of IT, and C-level sponsors.
When the tender involves significant change potential, you hopefully find somebody dealing with the Management of Change, who needs to be addressed specifically. If not, offer support on this. Sometimes HR is also involved when the deal includes outsourcing of staff, or significant change in staff activities is expected.

Key is to:

• Identify and address the needs and expectations of each customer in the tender team as well as their advisor(s). Create a map of individuals in the customer teams. Document their level of support and why they might not support you. Cover each customer with somebody in your team or wider company. Especially focus on the non-supporters and try to convert them at least to neutral. Respect levels and seniority. Document how you want to do that.
  It is also helpful to use a personality insights concept like social styles (see further reading), to not only map function- and level-wise, but have a fit on personalities (e.g. introverts, extroverts) in addition
• Make sure you have the right people and content to address customer stakeholders at the expected level of detail. A CIO might be fine with a strategic or even a marketing message, while a head of infrastructure operations and her experts want to know all the details you have (and don’t have)
• Understand who is a decision maker, who is an influencer and who doesn’t have an interest in the tender or is even working against it. For the latter ones, be careful not to address their expectations, as they might be contradicting to the overall goals of your customer
• Spot the contradictions! You will often find that there are different views within the customer. This is sometimes done intentionally to see how you respond and sometimes because the different departments have different agendas. Don’t worry if they are divergent (that’s quite natural), but try and address this with the customer without aggravating them. The last thing you want is to be steered down the wrong path by one person trying to meet their own agenda

Communicating with the customer

In general

Often a tender is run by the procurement department, using special tools like SAP Ariba. They are used to track all activities and communication between customer and supplier. This could mean, you are not allowed to talk to the customer, besides one specific person, email address or via the tool. They do that to avoid leakage, follow compliance protocols and to control and harmonize the information flow to suppliers. Quickly sorting out open points, feeling the heartbeat of your customer or just having an informal chat can be very hard and put you at risk of losing the right to bid.

Also you need to be aware of official and unofficial “leaks” to your competitors. Always assume that details like the order of magnitude of your pricing, your programme plan, your architecture or other important information finds its way to the competition. And not necessarily due to mischievous intend. It could simply be due to the comparability of a commodity service, research made available by companies like Gartner or ISG, or your competition’s internal battle cards.
Questions you file for answering to the customer, to my experience always get distributed amongst the competition. On the positive side, you will get your competitors’ Q&As, too.

Key is to:

• Respect and follow the rules set by the customer, while testing where you could cross individual boundaries (e.g. via a very supportive customer character)
• Help your customer to understand that ironing out small misunderstandings by discussing an open topic is beneficial to them early in the process.
• Negotiate / clarify in advance who talks to whom. It is a good idea to seperate your deal team from your account team. The later one can keep communication channels (with senior management) open. Their job is not to discuss content or influence the tender, but to check-in on the process (e.g. keep asking “Are we on time?” and “Are we meeting your expectations?”)
• Assume that official tools like Ariba will fail or have limited usabiliity. This impacts e.g. filing deadlines via the tool. When you file, send an email to your procurement contact. Then call them and ask for confirmation of your filing.
  Getting additional access to the tool, in case your user is sick or out of office, might be a challenge. Always ask for access for at least two characters in your bid team
• Accept leakage. Where you can’t, explicitly state the high confidentiality (i.e. shared under NDA only) of your material to the customer. Establish technical boundaries like sending out only PDFs, making use of user-specific access (e.g. via Google’s G Suite), but be aware, those methods are not bullet proof. If you cannot accept leakage, don’t hand out or send confidential documents. Be aware that the customer might not consider such material for decision making.
  Make sure you have a sound definition on what “highly confidential” actually means. This helps to avoid needing to give in at the customer on declared “highly confidential documents”, which actually are not confidential at all
• Use your own battle cards to benefit from organizational knowledge on your competitors. Such cards comprise e.g. pricing information, deal strategy, statements of your competition and how to respond. They allow you to be specific and precise in your communication without requiring you to build it your own from scratch
• File structured and well written questions to your customer, including specific references to existing documents like the RfP issued (i.e. file name, section and page number, bullet point). The customer will be disappointed when you wouldn’t. It might even introduce negative bias towards you and put doubt on your professionalism
• Phrase questions in a way not to give too much information to the competition. Either by the question itself, or an expected answer by the customer. Sometimes it is better not to ask a question because of the information flow towards the competition. On the other hand, carefully study Q&A from competing parties
• Know the history. It’s very likely that the customer has been engaged before. Maybe even three or four years earlier. Understand other initiatives and ongoing projects your company has at the customer

Orals and face-to-face interactions

Your direct interactions with the customer are limited. Make the best out of it. You will present once in front of a customer panel on what you are offering in most cases. Depending on the size and complexity you have additional air time. Assume that the customer will come back with clarification questions after you filed your answer. Try to do those in person, at least via video conference, too.

Key is to:

• Make sure you send your best team! Don’t send the most confident sales person and let them simply have a panel of non-speaking characters sit behind them. Ensure that each person in the team can interact and demonstrate their value (i.e reason for being there). Remember that your customer has probably sat through 4 or 5 similar presentations and the last thing that they need is to have your team simply repeat what they have read in the proposal
• Practice your story telling, make it interactive and keep it light-hearted so that the customer audience remembers your team and not just the proposal
• Prepare and incorporate answers to explicit and implicit questions the customer might have in your story. Those are e.g.

Why is this person here?

• Have they done this before? With which customer, when and to what scale?
• At customers with similar scale and problem, what people and roles do they have and how do they match to these (your) supplier people?
• Is this the team we will really get? For how long?
• Why is my account the interesting one for this (supplier) person to work on?
• Why do they need so many people to explain what they do and want to sell?
• How do these people match up to my organisation?

RfP answer

Your written answer to the customer RfP is the most important part and often legally binding. It will make up a significant part of their checklist (see next section). Get it right!

Key is to:

• Have a management summary for your whole answer, potentially spanning across 20+ individual documents. Make sure at least this part is written very well and reviewed by excellent writers in your company. This might be the one (and only) part read by all your customer stakeholders
• Include a summary in every key chapter or document of your answer, too (eg. solution, security, financials). These summaries outline in a couple of sentences the value of your proposal and how it matches or exceeds customer expectations. They increase your chance of more customer characters reading parts of your answer, in addition to the management summary. Have the same people who write the management summary review those chapter / document summaries to ensure consistency
• Do not answer with a simple yes or no. Usually it makes sense to add some context. Definitely explain more when you need to give a negative answer to the customer. So instead of answering the question “Do you have staff in Berlin?” with “No.”, answer something like “We have people in Dresden who would travel to your office 2 days a week and if required up to 4 days a week.”. If your customer issues a yes/no checklist try to include an additional column or comment field where you document such details. Goal is to give them more context and alternatives when evaluating your answer per their checklist (see below)
• Take care of seemingly minor topics like proper table of contents, concise heading numbers, compelling descriptions of graphics and of course spelling and grammar
• Stick to the customer formalities described above

Evaluation criteria

Your customer will have some kind of assessment framework to select a supplier during the tender. Whether it is a complex multi-page framework from the likes of ISG, or a simple one-pager with checkboxes, it will exist. The structure of the RfP and the documented expectations of the customer will give you a hint, how the assessment could look like.

In addition, you might have done pre-work like proof of concepts, or have a long lasting relationship with you, working together in different areas (achieving good or bad results). With those you could already have influenced the decision criteria either way.

Key is to:

• Understand what dimensions the customer will be rating
• Find out the priority of those dimensions. Usually the most important ones are not functional ones like best in class technology or compelling project methodology
• Be aware that C-level customer decision makers might follow criteria not on the checklist of the customer bid team. To my experience their decision criteria are:
• Financials (e.g. pricing, duration of contract, charging model)
• Legal (e.g. contract under US vs. German law, one-sided risk allocation, intellectual property rights)
• (Market) perception (e.g. your position in a magic quadrant, have done this before stories, public credentials, trust based on existing relationships between customer and supplier)
• Your financial stability and outlook. I’ve seen partners being rejected because their public financial situation was not promising (e.g. declining exchange value, rumors on hostile takeover)
• In very rare cases personal preferences or relationships. But usually this is only icing on the cake, not a deciding factor ruling out quantitative or qualitative criteria

Keep in mind that the evaluation criteria will change along the way, especially in a multi-phased RFP (e.g. round 1, round 2, best and final offer — BAFO). Whilst the solution and financials may get you through round one, a good answer to the HR related topics may be essential at BAFO. You can usually pick-up hints as the questions evolve, or as to where the focus and weighting changes

Marketing material

I learned that functional people at the customer are the least interested in your marketing material during a tender. They would not have approached you, if they would not have some level of confidence that you can do it (tokenism aside). It is highly unlikely that your marketing content is part of the customer’s evaluation criteria (see above). I have seen restrictions like “your answer on chapter 3 can be no more than 5 pages” or “Please put your marketing content in a separate document. We will not read it.”.

Still, there might be situations where you need a tiny bit of marketing to make your point. As an example: Your customer might not have asked you about the security of your product. But you feel you are very strong in this area and to your experience this is a differentiator in your market. Then you would add one or two slides / half a page of your marketing material and make it specific to the customer tender.

Other references could be customer case studies and references, adherence to recognized standards / certifications, product roadmaps.

Key is to:

• Put content first for the functional decision makers and their experts at the customer
• Make your marketing content — and content not asked for in general — specific to the customer tender. Keep it brief
• Let the customer know, a specific document or section was included by you for a broader overview (speak marketing) to your answer. They still might read it based on a conscious decision, but won’t feel like it was a waste of their time

Supplier team

This is about your team. It is one of the major factors why you win or lose. How to get it right?

Goal is to:

• Involve all required roles early on, to ensure what you sell is what you can deliver
• Ensure that key individuals are available throughout the whole process and have the bandwidth to contribute. Adjust the team early, in case certain individuals cannot support the RfP as required (availability and skills)
• Embed functional experts in your bid team, as the customer expects know-how to be present in their meetings, ready to be challenged. Be sure to understand how your experts are incentivized to embed themselves in your bid team
• From the beginning make transparent to the customer who would be the long-term engagement manager type of role, who is only here during pre-sales and who would be involved in potential delivery. In my experience customer decisions are heavily influenced by the credibility of your bid team being able to deliver after a favorable decision. Having those colleagues on board early is a booster. Even if you can’t commit these people officially, be transparent to the customer that it is at least your intent to have them on-board
• Have one person on the ground who is accountable for the bid. If your internal reporting lines do not meet at this person, make sure managers outside of this line support and respect the responsibility of this person. Contradicting statements or behaviours will be quickly noticed by the customer and are a big minus on their checklist
• Inform your senior characters who know executives at the customer. Make sure that they are informed of what they should and should not do. You don’t want to be excluded from the RfP, just because your CxO discussed the bid with the customer during a weekend activity

Negotiations

Negotiations start from day 1. Key is to prepare internally before you engage with your customers. Every interaction is in fact part of the negotiation. This includes defining and aligning positions, being prepared to push back, or retreating (temporarily) to reconsider when key positions are tackled hard by the customer. Be prepared to provide options to the customer. Also know your best alternative and when to walk away.
Everybody in your team is required to be aligned on your internal positions and should be ready to act on them. I’ll be covering this in a different article.

What’s next?

• If you are an active part of a bid team, read the formalities / expectations document of your customer. Then encourage your team to read it to identify gaps. After that start to close them
• If you are not part of an active bid team, identify what of the above guidance is missing in your internal how-tos and training material. Start to factor it in
• Let me know what is missing in my article from your point of view. I’m also interested in what worked well and what didn’t during your RfP answers

Further Reading

• The difference between RFQ, RFI and RFP
• The SOCIAL STYLE Model
• Buying (and Selling) Cloud Is Not (Yet) a Transactional Activity by Mathias Wagner

Mathias Wagner is a Technical Account Manager at Google Cloud. There he accelerates enterprise customers’ journeys to the Cloud.
www.linkedin.com/in/mathias-wagner