RFPs and Some Creative Alternatives
In this article, we discuss RFPs and some creative alternatives.
Companies have used RFPs (Request for Proposals), in one form or another, since the mid-1800s to source potential vendors. These days, though, many consider the RFP to be outdated and cumbersome. Nevertheless, RFPs are still the predominant method of getting vendors to compete for the opportunity to provide goods and services to new and existing customers. Therefore, in this article, we will discuss the do’s and don’ts of RFPs and some creative alternatives.
Often, when companies need to seek proposals for goods and services, they will do what is often referred to as RFP blasts or blind RFPs. This simply means they send out an RFP to every company they think may provide the products or services they wish to purchase.
There is much debate on whether blind RFPs or RFP blasts are effective or even worth the time needed to send them out. Therefore, in this post, we will discuss the pros and cons of the modern RFP process and some creative alternatives.
First: Some Interesting RFP Numbers
A 2021 RFP360 survey of businesses across different industries revealed some very interesting facts regarding RFPs. According to the survey, over 60% of businesses say they rely solely on RFPs to source new vendors. And out of that number, 60% reveal that they would prefer to avoid using RFPs altogether.
The survey also shows that nearly 80% of companies are open to alternatives to using traditional RFPs.
Vendors also view the RFP process as painful but unavoidable, and they also would prefer other ways to compete for business. In fact, nearly 70% of vendor respondents said they prefer not to respond to RFPs – even if they already have an existing relationship with the customer.
Out of the vendor companies that took part in the survey, about half (50%) stated they would not respond at all to an RFP if they didn’t already have a relationship with the business making the request. And about one out of ten respondents said they would not respond to an RFP from an existing customer or client.
Are RFPs Always Fair? Maybe Not
One would think that RFPs are a fair and transparent method for sourcing vendors. However, this is not always the case. Nevertheless, about 45% of vendors say that the RFP process does at least give them a chance to “get their foot in the door” – even if their chances of landing the deal are slim.
Of those surveyed, about 60% of vendors said they suspected finalists in RFP processes were pre-selected before the requests even go out. However, only 10% of companies that regularly use RFPs to source and vet vendors admitted that they usually favor certain vendors before they send RFPs.
What about the quality of RFPs and their responses? Over forty percent of vendors said that the RFPs they receive are poorly written, and over 50% stated that alignment between procurement and vendor management is rare.
Is Anyone Really Paying Attention?
Nearly 55% of procurement managers surveyed reported that they believed most of the RFP responses they received were copy-paste jobs. And over 60% said they noticed simple grammatical and spelling errors in the responses. Moreover, about half noted that RFP responses are filled with sales fluff and lack any sort of creativity.
When asked, over half the vendors stated they suspected procurement teams skipped directly to pricing pages and paid no attention to other sections of the RFPs. Oddly enough, more than a third of procurement managers surveyed admitted to never reading RFP responses cover to cover.
Should We Change the Way We View RFPs?
From the results shown in the aforementioned survey, we can see that there are at least a few problems with the RFP process. Therefore, maybe we should ask ourselves, should we continue to do business as usual and continue using RFPs? Well, unless we can come with up with better and more creative alternatives, RFPs will probably remain the standard for sourcing vendors.
Now, let’s pivot a bit and concentrate on call centers. Over the past twenty years, the call center industry has not only grown rapidly, it has also developed into a modern cornerstone in how companies do business. Nevertheless, too many call centers are still subject to outdated and cumbersome RFP practices.
The Shotgun Approach to RFPs
Many companies create “RFP lists” with little or no prequalification. In fact, most times, creating an RFP list involves nothing more than a cursory Google search for “call center vendors.” This achieves very little to receive fruitful responses and probably only serves to pad the numbers of a procurement team looking to count as many vendors as possible in their RFP metrics. Of course, this approach (which is very common by the way) is all about quantity, and not quality.
This type of “shotgun” approach to sending out RFPs decreases the chances of finding good matches considerably.
Think of it this way: If you needed to hire for a key position in your company, you would not interview every candidate who submitted a resume. No, that would be completely counterproductive. You would first review and screen the submitted applications and create a short list of those you felt were qualified. If you think of vendor sourcing that way, why would you send RFPs to call center vendors who may be unqualified without first screening and vetting them? You shouldn’t, of course.
The RFP Needs a Facelift (Or Alternative)
RFP issues encountered by both clients and vendors suggest a deeper problem with the typical RFP process itself. In most cases, the RFP process is similar to the following.
- Compile a list of vendors (usually with Google and little or no prequalification).
- Email each vendor on the RFP list.
- Receive responses from vendors who opt to take part, which are often very long and verbose.
- The client (or potential client) skips ahead in the RFP directly to the pricing page; but may briefly skim other pages.
- Client creates a short list.
- Client performs site visits (some may not).
- Client chooses vendor(s).
As you can see, this type of dry, impersonal RFP process prevents vendors from being creative in their proposals or providing an adequate view of their services. As mentioned above, clients complain that many vendors just copy and paste their RFP responses. However, this is because of the copy/paste method used by most clients when they send RFPs. This type of process becomes a cycle, in which each RFP is just a derivative of another RFP, which is the product of yet another RFP. You get the point; it never ends.
We should strive to find a solution that benefits both clients and vendors. So, let’s begin by taking a closer look at the what, when, and why of RFPs.
When Does Your Company Issue an RFP?
Before we dig into how we might improve the RFP process, let’s discuss when your company might actually choose to issue RFPs. In most organizations, RFPs are issued for the following reasons:
- Required by corporate rules or policies – Some corporations and larger companies have established rules that require all contracts to undergo a competitive bidding process. This, of course, is usually done with RFPs.
- Contract expirations – When existing contracts are nearing an end or coming up for renewal, client companies often send out RFPs to explore renewal options.
- Poor Performance – When vendors are not performing up to expectations or meeting core goals or metrics, clients may (and usually do) look for alternatives, which usually results in an “RFP blast” to find a replacement.
Other Times You May Need to Use an RFP
- Offshoring or Nearshoring – When a client wants to move their call-center operations from the United States offshore/nearshore, RFPs can help them find a call-center vendor with a global footprint.
- Outsource existing in-house call center operations – Client companies that want to outsource their call center operations for the first time will almost always issue RFPs (unless they have been referred to a specific vendor by a trusted source.)
- Carve-Outs or Build Operate Transfers (BOT) – RFPs are often issued when clients are searching for a carve-out or BOT solution. A carve-out is a model where a vendor takes over a client’s existing call center operation or agrees to co-manage their call center(s).
Of course, there are other scenarios in which an RFP might be warranted. However, the above are the most common reasons client companies send out RFPs to call center vendors.
Why Are RFPs Needed Anyway?
As we’ve learned, there are many potential issues with RFPs. Nevertheless, if implemented correctly, RFPs (and creative alternatives) can still be a valuable resource in helping to source the right call center vendor. Below are some reasons why the RFP can still be useful:
Reasons RFPs (Or Creative Alternatives) Are Still Relevant
- Unknown Vendors – RFPs can help client companies discover vendors that stand out from their competitors and offer better services and/or value.
- Vetting of Stakeholders – RFPs can satisfy most (or all) general requirements for the vetting of stakeholders, decision makers, or influencers.
- Corporate Governance – RFPs fulfill corporate mandates or rules when multiple-vendor bidding for contracts is required.
- Discover New Ideas – By sending RFPs (and then receiving responses), client companies can discover and learn about new (and often better) processes, methods, and ideas.
- The Pre-Test – Client companies can use an RFP as a project management test for potential vendors. An RFP can help you determine if a vendor can follow instructions, be attentive to details, and meet deadlines.
- Self-Discovery – RFPs can help a client company gain a better understanding of their own needs in terms of the call center services they want to source, as well as their own procurement processes.
- Incumbent vs. Challenger – RFPs can put your current “incumbent” call center vendor on notice that challengers are vying for your business.
- Pricing Data – An RFP can help a client company understand and compare current call center vendor rates, as well as determine which types of pricing models make sense for them financially.
- Vendor Competition – RFPs create healthy competition among call center vendors, which could result in better pricing and improved metrics for your sourcing channels.
Common Problems with RFPs or Similar Alternatives
If you’ve been following along up to this point, it should be obvious that RFPs are resource intensive, without a doubt. And while clients invest a lot of time and energy in creating RFPs, many people often overlook how much effort is required for vendors to respond to those requests. Therefore, given the time and resources required by the vendor-side of the process, it’s easy to understand why many call center vendors shy away from involving themselves in the RFP process to start with.
Here are some of the reasons the RFP process is so universally maligned and dreaded by call center vendors (and to a lesser extent, clients):
Preselection Bias
In many cases, RFPs are nothing more than a formality because a client favors one or more call center vendors before the process even begins.
RFP List Padding
Clients send out lots of RFPs simply to increase the number, giving no forethought to required criteria or the vetting process.
Not Ready Yet
In some cases, clients send out RFPs before they’re ready to begin the process of seriously engaging with potential call center vendors, which usually wastes valuable time and resources.
Irrelevant Questions
Clients often have a tendency to ask many irrelevant questions in their RFPs. This generally only serves to make responses longer and take more time to create. Clients should keep RFPs as simple as possible, while asking for data required to make a good vendor-sourcing choice.
“I Know a Guy”
This usually means a procurement manager “knows of” a call center vendor. The problem with this approach, though, is that the person making the claim often has no experience with the vendor directly, has little or no knowledge of the call center industry, or has inadequate information on the vendor.
Wary of New Relationships
Sometimes, clients refuse to initiate or develop relationships with potential call center vendors before an RFP. When this happens, it’s a disservice to both the client and the vendors seeking to vie for their business.
Contract Leverage
When the incumbent vendor(s) already has/have a good chance of retaining a contract with a client, sending out RFPs is often viewed as nothing more than a bargaining tactic to get better pricing. If this is the case, the client should just demand better pricing and service from their current vendor(s).
Reverse Vetting
Some call center vendors may also want to vet a potential client to determine if the opportunity is a good fit for both sides. This type of “reverse vetting” should be welcomed and not met with disapproval or disdain. When a vendor chooses to be selective with the clients they accept, this should not be seen as a sign of arrogance. Quite the contrary; it’s often a sign of a call center vendor just wanting to ensure that both parties can indeed benefit from the relationship.
Response Scoring
Often when clients create RFPs, they contain very specific selection criteria, which many vendors may not meet. If the criteria don’t really align with your requirements, you should not include them in the RFP. In most cases, unreasonable criteria will either be ignored, or the call center vendor may not respond at all.
Wasted Time
Do clients read RFP responses cover to cover? Studies and surveys say they don’t. If you’re going to skip directly to the pricing page, your RFPs should not demand too much information.
Vendor Ghosting
Generally speaking, vendors invest a lot of time and effort in creating RFP responses, only to sometimes never hear back from the potential client. Professional courtesy dictates that a client at least acknowledges and thanks the vendor for the effort – even if the client chooses to work with another vendor.
Small-Fry Clients
Large call center vendors may sometimes opt out of long-winded RFPs if the size of the potential deal is too small. Therefore, always match the scope and length of the RFP with the size of the deal.
RFPs and Some Creative Alternatives
In the call center industry, clients and vendors continue to implement RFPs in the same traditional manner used for decades. At the same time, though, advances in workforce management and technology have been truly remarkable. Therefore, if we can adapt to ever-changing methods and technologies, we should also be able to come up with better sourcing and vetting practices.
Put simply, call center vendors and their clients need not continue the old, cumbersome way of doing things. Perhaps a better approach is to combine the best components of the RFP with newer and more effective methods for sourcing and vetting vendors.
Here are some creative ways we might better streamline and improve the vendor sourcing process:
Have Pre-RFP Meetings
After you create a shortlist of call center vendors, invite each one for a face-to-face meeting at your location. During the site visit to your location, potential vendors will familiarize themselves with your business, culture, and processes. After meeting with your shortlist vendors, send out your RFPs (or antoher creative alternative) so they can respond in a more informed manner (which results from them having been able to learn more about your business.)
Video RFPs
Send out your RFPs as you normally would. However, instead of asking call center vendors to send written responses, ask them to create short videos in which they answer your RFP questions and tell you their companies’ stories.
Onsite RFPs
After creating a shortlist of call center vendors, schedule site visits for each company. Ask most (if not all) your RFP questions at the vendor’s site. To help you create your shortlist, send out RFPs with no more than 10 questions you feel to be most important or relevant. Once you receive the responses, score them according to your requirements, and then schedule your visits. Bring your decision-makers and stay onsite with the potential vendor for one or two days, if possible. Before leaving for the visit, send the call center vendor a list of questions you would like answered during your time with them. This method allows potential vendors to show you how they operate, instead of just telling you.
Scope of Work Requests
If you have a list of pre-qualified vendors, send each one a scope of work (SOW) describing your business’ needs and requirements in detail. Ask each call center vendor to create their own responses to your SOW either in writing or in a video. In your SOW, provide potential vendors with some basic guidelines to ensure responses are easy to digest and follow. However, also encourage the vendors to add any additional information they might feel will apply to your making a sourcing decision.
Call Center Aptitude Test
Instead of sending vendors RFPs, create a call center aptitude test. In the test, ask a series of scenario-based “what if” questions relevant to your company’s needs and goals. With this approach, though, it’s better to create your shortlist first. Work with your team internally to come up with situational questions that will help you get a better picture of vendors (as a whole), instead of relying on the shiny responses many vendors provide.
Reverse RFP
Reverse RFPs may sound counterintuitive, but they really can help you find out a lot about potential call center vendors you are considering. With a reverse RFP, the Q&A process allows call center vendors to ask you questions about the client business’s needs and goals. When the client receives the questions, the the procurement team reviews them, answers thoughtfully, and sends them back to the vendor. This process can, in short, be your RFP. Allow each vendor to ask 10 or 15 questions. And then once the vendors receive the answers, wait for them to submit their proposals. You can then evaluate each call center vendor based on the questions asked and the strength of their proposals.
These are just a few examples of spins on RFPs and some creative alternatives. Of course, your team may be able to come up with others.
IA Solutions by IA Call Center: Where RFP Equals – Whatever You Want it to Be
At IA Solutions, RFP means whatever you need or want it to be. With over 50 years of experience in the call center industry, we have heard and seen it all when it comes to RFPs. Therefore, we welcome any method or process you choose to implement when vetting us as your call center partner. You choose the method, and we will meet you there. Once we have the opportunity to show you how our best-in-class boutique call center services work, we think you will consider giving us a chance to earn your business.
IA Solutions has helped businesses of all sizes increase their bottom lines by providing superior customer service and support to customers on their behalf. And we do so at rates that are fair and affordable. If you would like to find out more about how we can help your business improve its customers’ experiences, send us an RFP (or a creative alternative), or click here to contact us. Alternatively, contact us by email at [email protected] or call us toll-free at 877-631-8711. We look forward to hearing from you.