Over lockdown, I have started playing small-stakes online poker with friends. I had barely played poker until just under a year ago, so I have learned almost all of the rules and techniques from scratch.
One of the most fundamental skills to learn in poker is deciding when to fold. Unfortunately I learned this the hard way. I quickly found that having a mentality of "in it to win it" wasn't effective. It was easy to assume that playing each hand (rather than folding) would maximize my chances of winning. However, playing this strategy is a sure-fire way to lose all of your chips because you end up betting on hands where you have little chance of winning against competitors. Instead, it is a better strategy to fold when you have a hand that has little chance of winning, and conserve your chips until you can bet on a stronger hand.
The challenge is to determine the criteria which will decide whether you bet on a hand or to fold.
Fortunately, I see myself as a far better Solutions Consultant than a poker player. This dilemma of whether to play or to fold has its similarities with responding to RFPs.
Much like poker, if a mentality exists that you must respond to every RFP to maximize your chances of winning a deal, soon the finite resource of Solutions Consultants' time will be depleted.
"Quitters never win and winners never quit" - Vince Lombardi
One of my US-based sales colleagues used to frequently quote the American football coach Vince Lombardi: "Quitters never win and winners never quit." Unfortunately, this is a common misconception when it comes to responding to RFPs. Yes, from a sales perspective, it might seem that the more deals we run with, the greater chance we have of one landing. But I vehemently disagree.
If all RFPs are treated the same, then the same allocation of resources will be going to requests that are almost certainly going to close as those which will almost certainly be lost.
Solutions Consultants' time will always be finite so there should always be tactical prioritization. In my experience, in a lot of cases, the more time we spend on a proposal, the greater the chance we have of winning it. And that doesn't just mean answering functional questions. It should include spending more time on discovery, understanding the business needs, the current challenges, building a strong relationship with stakeholders, and then ultimately creating a thorough proposal that is based on our understanding.
For this reason, the decision to qualify out of an RFP is critical as it frees up resources to spend on opportunities where a win is more likely.
Timing is Key
For larger tenders, there will frequently be multiple steps to go through, ranging from pre-qualification questionnaires, request for questionaries, request for proposal, functional, technical and legal questionaries. The list goes on.
That's why it is important to decide when to qualify out.
Going back to our poker analogy, the same is true. I quickly found that if I fold as soon as I see that I have been dealt a poor hand, I mitigate the risk of spending any of my chips where I am unlikely to win. However, there is risk associated with doing this. In many cases, it is worth me staying in for the first three cards being dealt on the table (known as the flop). This requires me to play some of my chips, but then allows me to fold with a better understanding of whether I have a good hand or not. Otherwise, if I am too risk averse, I might fold too early without seeing the other cards where I could have actually won the round.
For Solutions Consultants, the same is true. The balance will be between qualifying out as early as possible to avoid spending time on opportunities that are unlikely to win, and remaining in the process long enough to obtain a good enough understanding of whether you will have a decent chance of winning. The more time spent in the process, the more resources are consumed. In most cases, it doesn't make sense to stay in a tender process until the decision if there is little chance of winning.
In my experience, being good at estimating the time it will take to respond is a great skill to learn. This will be based on prior experiences and understanding the complexity of a potential implementation project. Not only does this help clarify the feasibility of responding to a request with the current available resources, it also allows you to ask for a deadline extension early rather than over-committing, having to ask for an extension just before the deadline, or even missing the deadline altogether.
Another consideration is the opportunity cost of responding to a request. What other value-adding activities could your Solutions Consultants be spending their time on if they didn't have to respond to an additional RFP?
With that additional time, there could be more opportunity for discovery with a client, nurturing a new relationship, or getting a better understanding of needs and requirements. If you have a demo video automation strategy, could that time be spent on making new demo videos for clients which are repeatable? After all, this kind of work will add repeating value each time it is utilized for multiple opportunities.
It is very easy to fall into the trap of thinking about the time and effort that has already been spent on an opportunity. These are sunk costs – costs that have already been incurred and have no bearing on the future as they are irrecoverable.
Instead we should be looking towards the future costs of actively participating in an RFP process. Ask yourself: how many additional resources will be spent to win this RFP? This allows you to take the emotion out of the decision and to look more rationally at the RFP. You may feel strongly because you have put a lot of time in with this client (you don't want that time to go to waste). However, if it is now very clear that you will not win, it is important to stop spending any time on it.
Defining Qualification Criteria
The solution is to quantify when you are most likely to win. Poker players will know which hands they should bet on, and which they absolutely shouldn't. If I start a round with a pair of aces, I know that I have a much stronger chance of winning than if I have a three and a five.
For Solutions Consultants, we can build up criteria which allows us to score
RFPs. This can help make a rational decision as to whether you should respond to them. The score will determine the likelihood of winning the RFP and can be combined with current levels of resourcing and utilization to form an ultimate decision whether to proceed or qualify out.
By having a scoring system that is agreed upon between Sales and PreSales, it prevents potential pushback from the business when taking the decision to qualify out.