sales

Should clients pay for tender and request for proposal submissions?

Sue Barrett /

In principle, and ideally in practice, clients should pay for tender and request for proposal (RFP) submissions.

Why? Because there is a lot of time, effort, money and intellectual property (IP) that goes into preparing a tender or RFP. This also includes requests for information (RFIs).

The companies requesting these tenders, RFPs and RFIs are freely benefiting from the expertise of suppliers if they are requesting highly-detailed responses, and expecting to pay nothing for this information. With the advent of software these companies can easily compare offerings and strip mine the intellectual property to serve themselves at the suppliers’ expense. Basically they are getting knowledge and expertise for free and this is not a fair exchange of value.

As suppliers, we should be able to choose to put in as little or as much as we like. However, we are often constrained by the parameters of the tender or RFP process.

If we don’t include certain information requested by the prospective client company we cannot participate in the tender process. We are in a bind. Do we submit or not?

If the tender process is grossly weighted in favour of the prospective client company I would say do not submit. However, if your business is heavily weighted to tenders, you could be in trouble.

Especially if the information being requested is our ‘secret sauce’, our processes, our ‘how-to’ or our IP. You be the judge, but I would say no to the tender process upfront because chances are the requesting company is likely to strip mine our response, take it in house, do it themselves or piece it together with the lowest bidders. This happens more than you think. Even if they don’t do it themselves, the insights they gain for free from our submissions are in fact worth something and, I believe, they should pay something for our knowledge and insights.

Tenders have gotten out of hand in many instances, with supplier companies being ‘held to ransom’ by prospective client organisations. Much of what is being requested today is completely unreasonable. I would love us all to protest and not submit anything all — and we are free to do so — but that is rather idealistic as there will always be a supplier that will drop to the lowest common denominator to try and take the deal.

Healthy, effective relationships are the best course of action because they are about a fair exchange of value where both parties respect each other. That holds true for healthy and viable client-supplier relationships. No relationship can function or work well if one of the parties is taken advantage of by the other. I propose that we look at how we can change the dynamics of tender, RFP and proposal submissions. A big call but we have to start somewhere.

This is why one of the core beliefs of the Selling Better Movement is believing in a fair exchange of value.

Selling is about creating a fair exchange of value between buyer and seller; it’s about mutual prosperity.

Selling is about forging healthy viable relationships and recognising these relationships do not remain static and unchanged. They are designed to be stress-tested, to grow and change. They thrive on trust, openness and honesty, and result in new ideas and shared common ground on which to build better outcomes together.

I believe we cannot seek achievement for ourselves and forget about progress and prosperity for our community. Our ambitions must be broad enough to include the aspirations and needs of others for their sake, for our own and for the planet.

There are many ways to pitch and bid for business today, however I propose we become more discerning about what sales opportunities we go after. Discernment is the ability to judge well. The ability to stand up for what is right and be courageous in the face of adversity and ethically compromising situations. This can mean saying no to opportunities that do not serve us, our clients or our communities well.

Nothing is for free, everything costs something. 

I propose that there should be a fee paid up front by the requesting client to get a detailed brief. This already happens in some industries like architecture where draft ideas and plans are drawn up and a fee is paid whether the plan is accepted or not. There are marketing agencies and designers of different denominations that have adopted this model as well, but not often enough across most industries.

Smart clients and procurement teams are recognising that engaging with real people to solve complex problems is worth something and should not be subjected to a bidding war. Some supplier companies are now charging for a briefing session, especially where their expertise and IP will be used to help sort out a project. This means that at least you get paid for your initial work up front before you embark on anything more time consuming and expensive.  

What can you do?

Where can you start? How can you sell better?

If you cannot get paid up front for your submission then maybe pull back on what you are giving away at that stage. Of late, we have pulled back on putting in detailed proposals and only provide the basic foundations in writing. Especially in the first submissions. This saves time and money and lowers the cost of sale. It also protects our IP. If they want more information or we get to the next stage we can then go into detail, but we do this in person as it allows more control over what we share and it personalises the process which can add more value.

Always assess the viability and probability of any tender

It pays to always assess the viability and probability of any tender, RFP or proposal process before you embark on an expensive tender or proposal submission campaign. Assessing the probability of winning and knowing what you have to do to win it before you really start is a sobering experience.

Remember everybody lives by selling something.

NOW READ: Where are all the high performance sales coaches?

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Sue Barrett

Sue is a selling better strategist and advisor, sales philosopher and speaker, sales trainer and coach, writer and activist. Sue is chief executive of forward thinking sales advisory Barrett and online sales education and resource platform www.salesessentials.com. Barrett develops sales strategies, standards and education that help people and businesses sell better.

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  • Simon Kean

    I’ve found some great clients that do pay for a fee proposal, but this is rare. They say they can’t expect a small business of less than 5 people to do this for free.

    And a government client has asked from me 22 hours of phone calls and questions over 10 months, them telling us to save capacity for them before finally sending out a request for quote. Then after an RFI process confirming what they wanted, and after my time on this now hitting 30 hours, they rejected our proposal. It seems they wanted to pay for 2 weeks of work (bearing in mind 30hrs has been devoted to get to this point which we’d already written off) when at least 5 weeks would be required.

    They are now rescoping, restarting the quote process and getting other prices, I will be livid if they put our methodology from our proposal out to competitors to price.

    Under their own terms of the engagement they can not claim any IP in our work or fee proposal until they have signed the contract.

    • Sue Barrett

      Hi Simon
      You are not alone. I am so sorry to hear about your situation.

      It’s so frustrating. On Linkedin where I have also raised this topic there have been lots of similar responses.

      Something needs to be done.

      ‘Seller beware’
      Thank you for your contribution as it will add to the discussions that need to be had.
      Cheers
      Sue

  • Wally Boy

    There are a couple of things you should look for when responding to an RFx.
    1) Make sure you have a Non-Doclosure Deed or Confidentiality Deed in place before you respond to anything.
    2) Before you respond, ensure that there is a “Section A – General Information for Respondents” and that Section has RFx Terms and Conditions and you fully understand those Terms and Conditions before responding.
    3) Somewhere in the “Section A” will be a clause that goes something like this:
    “Confidentiality and Copyright
    To assist Us in assessing your response We requires the right to make copies as reasonably necessary. By submitting a response to this RFx, you licence Us to reproduce your response in whole or in part, notwithstanding any copyright or other intellectual property right that may exist in those documents.

    Both parties will have information in relation to this RFx that is confidential to the disclosing party. Both parties must respect the confidential nature of each other’s information and not disclose any information without the consent of the other party. You should be aware that this RFx is not open but forwarded to selected respondents only.

    All respondents are required to complete a confidentiality agreement. This should have been signed and returned to Us before receipt of this RFx.”

    4) When you are asked questions by the Requestor, always ask for them in Writing, i.e. email or a document.

    5) When you respond to a question in 4) always respond in a document with Confidentiality headers and footers asserting your Intellectual Property and Moral Rights.

    6) Where you are providing your “Secret Sauce” license Adobe Acrobat and wrap security around it, that is use all the security available, such as disabling Copying and Editing. Password protect it, have a read password and an edit password.

    Always ask “Is there an incumbent in play for this, and can you tell me why you are looking at other providers?” The answers to these 2 questions should help you determine how much “Secret Sauce” you put in the response.

    Remember, Always fully inform yourself of what the Requestor is up to and why they are testing the Market. I know this because I Consult on Account Management and Procurement, I’ve worked both sides.

    • Sue Barrett

      Hi Wally Boy
      thank you for the great advice that will help so many people better manage this situation.
      Cheers
      Sue