Many web studios here in Sacramento may be tempted to pursue RFPs in order to grow. I think this is a bad idea.
While there are specific instances where actively pursuing RFPs and RFQs can work, responding to RFPs is something I choose not to do.
What Is An RFP Exactly?
RFP is an abbreviation for Request For Proposal, and is where a hiring entity solicits vendors for a project with specific requirements. Sounds good on the surface, right? Let’s see.
…a solicitation, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals.
Let’s examine this language further.
By definition, any service obtained through an RFP process is considered a commodity. What exactly is a commodity? Something that is not of much value to the purchaser. Some of the ways Merriam-Webster defines a commodity are:
• a mass-produced unspecialized product.
• a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price.
• one that is subject to ready exchange or exploitation within a market.
RFPs generally select the lowest cost provider that the selection team believes meets the stated requirements.
Specialized knowledge is not considered. Establishing open communication prior to signing a contract is nearly impossible. But these things are necessary for a design studio to do their best work for a client.
Open communication is the basis of our business. Communication permeates everything we do, and along with honesty and transparency, is the foundation of our success, both in business and our personal lives.
We do not compete on price. We compete on quality and specialized knowledge. We do not want the commodified part of the market, because it will not sustain us.
“Core Values”, LockedownDesign.com
Why RFPs Don’t Make Sense For Many Web Studios
The truth is, most RFPs are written with a specific agency already in mind. The organization may still be required to send out an RFP to satisfy requirements. For institutional or larger jobs, the RFP process favors larger agencies, not smaller ones.
If there is a preferred agency in mind, they already have the inside track, and may have a hand in writing the requirements of the proposal. It makes no sense to respond to a RFP without a previously established relationship with the soliciting organization.
RFPs are sometimes sent to get free consulting or crowdsource possible solutions. Without having conversations with people inside the organization, it’s difficult to get an accurate view of their problem, much less come up with a good solution. Worse, a few organizations may just want to cherry-pick the proposals that come back, and see what ideas they can glean.
Some RFPs are actually sent to assess whether the company can do the work in-house. This is deceptive and lazy. Instead of being honest and saying, “Hey, we aren’t hiring anyone from the outside, but we just want to get an idea of how big this project scope is…” these RFPs are sent to agencies to essentially waste their time.
The time spent preparing these false RFPs could be better spent pursuing real clients.
While these various scenarios do not represent all RFPs, even under the best of circumstances, I still believe the process is flawed.
Why Do RFPs Fail To Get The Best Results?
RFPs often fail to produce the best results for clients because they restrict initial communication, and de-emphasize establishing a client-provider relationship. An RFP usually seeks out the “low-cost leader” of respondents. There is relationship established — no research or due diligence put into finding out who would be the best service provider for a project.
Relationships that start by being strictly transactional rarely have the same chemistry, communication or collaboration that other client relationships do.
But some entities are required to go through the RFP process to get web-based projects produced.
RFPs that establish price as the deciding factor often return substandard work.
Software and web companies that undercut themselves on price to win a bid must often cut corners on craftsmanship. This results in money spent by the soliciting organization that still does not accomplish the original goal. These organizations must often wait years to commission more work, but will make the same mistake over and over again.
Some web studios can win at the RFP system. But they must know what they are getting into beforehand.
Who Can Leverage RFPs To Their Advantage?
If you’re a web design shop that targets non-profits or government contracts, you’ll have to go through the RFP process quite a bit. Most of these jobs are mandated to be awarded to the best qualified shop (usually with the lowest price).
Some enterprise level projects also require your agency to go through the RFP process. If your target client is an enterprise level organization, it is likely you are known for a particular specialty already. You may have friend inside the organization, or at least, decision-makers who have heard of you.
Other Times RFPs Might Make Sense
If you’re friends with someone on the inside of an organization, and you know you are the preferred contractor, it makes sense to submit an RFP.
If the requirements of the RFP are being written especially for your team, it makes sense to respond to an RFP.
If your chosen client base uses RFPs to select vendors, you’ll have to get used to writing RFPs.
For anyone else — you must weigh your time and effort versus the rewards you obtain.
To RFP, or Not to RFP?
What’s your take? Leave a comment and let me know.