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If your existing client chooses to issue an RFP for new business, should you be worried?
Are you within your "vendor boundaries" to ask why a client has chosen to go to RFP for new business if you have an establised relationship with them already?
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3 Answers
It certainly is a caution flag, but not necessarily bad news.
Stay positive and focus on graceful yet forthright requalification. Begin with a simple, “Tell me the story. How come?” Possible answer categories include:
• They have to, to satisfy a real or perceived external situation such as they are about to get acquired or audited or there is a governmental requirement.
• They want to, for reasons unrelated to your company specifically; e.g., a general review of vendors of all sorts. This is happening a lot nowadays as businesses try to consolidate their vendor bases. I read that Ford used to have 55,000 vendors but now has only 7,000.
• Internal politics. There’s a new “sheriff” somewhere in the organization who wants to bring in his/her own “posse” and perceives the RFP route as the way to “clean up the town.”
If the answers indicate that you have a realistic chance, then evaluate whether the new pricing, terms, and conditions would remain favorable for your business. If they don’t, well, you had a good run. If they do, then hooray! Propose and negotiate accordingly. Remind them of why they chose you last time and the value they continue to receive. Of course, if the RFP is because you messed up, then apologize, fix the issues, and move forward!
Going to RFP is a costly decision. Unless there is government mandate, I would be worried. You are well within your vendor boundries to help save your customer money by advoiding the cost of a RFP. If they are going to RFP, you should help them complete the RFP.
I support both michael's and Alan's answers.
I would like to add this...
If the RFP surprised you it means that your map of decision makers is off.
In this case, a common mistake is to dismiss it and panic over the RFP when you should panic over the fact that your going blind. which will lead to failure.
Some can still win blindfolded but they will normally loose a lot of energy ($$$) and will expose the fact that they are blindfolded, causing them to be vounarable again in the future.
If you checked and found that there is nothing new in the decision makers grid, then you are in trouble. Not only that you got disconnected, they didn't even complain.
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