Receiving an RFP from a prospect early on in an engagement can feel very exciting.
But is it a good sign?
The answer is unfortunately, no.
First a little bit of insight into what an RFP means. Purchasing a tool from a vendor isn’t always that simple–even within a corporate entity. Sophisticated companies will have established procurement procedures for buying goods and services. Two of the earliest stages in this process are:
1. The identification of Need
2. Supplier Identification
Simply put, imagine John from marketing wants to purchase a particular new analytics tools, but before he can do so Procurement will first vet the actual functionality he wants that tool for and then check to find out how many vendors there are with tools that actually offer that very functionality. After all, there may be multiple others vendors out there that can provide for the need John’s trying to fill for cheaper.
Procurement will then create a sort of questionnaire checklist reflecting all of the features that John is looking for plus other particulars that the company will be concerned with regarding this type of purchase, like questions relating to things like data security, etc. Procurement will then send this questionnaire to all of the suppliers it has identified that might be a good fit.
Each company then fills out the questionnaire and returns it to the procurement liaison. Procurement will then review the results and decide which vendors it will escalate to the next level of the purchasing discussion.
So, as you can image at this point, a company will only send you its RFP once someone within that company has made a decision on a particular tool. If a prospect sends you a fully developed RFP very early on in a discussion, it just may be a sign that you’ve reached them at a time when they’re already vetting one of your competitors–not that they like you all that much.
In fact, a successful salesperson will define the RFP for the prospective client before procurement distributes it, so that it paves the way to that salesperson’s specific solution!
So, next time you get an RFP before you’ve even been able to shake hands and present your solution, don’t go off forecasting a win…think twice and accept that you may be too late to the party.