Over the course of the last several months I have been working on two RFP’s for my company. One was to hire our first social marketing agency-of-record while the other RFP was for a new social media management system (SMMS). Following a thorough and deliberate process we recently concluded our searches. While leading this work I learned the ins-and-outs of what it means to go through the RFP process at a Fortune 100 firm like Best Buy. I went through the paces with a wide range of talented people that came from areas such as procurement, contract management, information technology, corporate technology & security, legal, and privacy. I came away with the understanding that a well crafted request-for-proposal is an absolute necessity to help potential vendors provide the best reply possible. And lastly, I came away with the belief that from a client perspective the current RFP process for big companies is flawed and needs to be redesigned.
I don’t doubt the purpose of an RFP process. On the surface they sound well intended. Clients reach out to a bunch of different prospective suppliers to learn about their businesses and whether they would be a good fit. This includes multiple rounds of meetings with the suppliers, evaluating them on a variety of criteria, reviewing pitch presentations and analyzing spec work. RFP’s also serve a financial purpose; they are used by clients to create a negotiating advantage when it comes to contract terms. These are all valid reasons for having this kind of process to identify prospective suppliers; however, somewhere along the way the RFP has evolved into a process that hampers speed to market and compromises thought leadership.
I see three issues with the RFP process for large firms. First, the process is over- engineered and results in a lack of speed to market. In one of my RFPs, our initial timelines – and this was the best case scenario – was four months long from beginning to end. (Mind you, we did not finish in that time frame.) Part of this was due to the sheer number of steps in the process. The other problem was that some of the people working on the RFP were quite unfamiliar with the area of business that the RFP was addressing. This isn’t a knock on those people; they weren’t supposed to be subject-matter experts with specific knowledge of the market opportunity I was trying to address. But by not being familiar with the social media space, my team and I had to spend a large amount of time while slowing down the process educating different groups in the organization on the basics of what we were working on and explaining our requirements.
The second issue I witnessed is how cost savings is always one of the primary factors being evaluated. Now I get it – I work at a company that is in turnaround mode and I understand how reducing overhead costs is extremely important. But costs savings sometimes come with an actual cost – and you have to know when is being gained from a savings standpoint doesn’t line up with the quality of work you are receiving in return.
Lastly, I believe that convoluted RFPs are an awkward precursor to starting a working relationship with a new vendor. I’m a big believer in the importance of relationships between clients and vendors, and to me it feels hard to create good will between partners after going through this kind of process. (And this doesn’t even take into account the importance of maintaining a positive rapport with the vendors that didn’t get selected coming out of the RFP because you never know how things will change down the road.) Brand reputation is important for clients and we need to keep that in mind with the partners we choose and the ones that we don’t.
So why does it need to change? It needs to evolve because consumer behavior is constantly changing and technological changes are moving even faster. The marketplace of vendors that I see in social media is quite different than it was 18 months ago, and I expect it to be very different in another 18 months. The evolution of social networks (e.g. Instagram, Vine, Snapchat, etc.) and their adoption by consumers is changing monthly, weekly and daily. For someone that works in the digital space, the RFP process doesn’t allow for brands to move quick enough in order to respond in a manner that keeps up with the market.
When it comes to making a change to the process and handling RFPs differently, I think the answer is all about improving the mentality and focusing on speed. If you do this, everything else will follow. Large brands have to think from a consumer and technology perspective first and adopt that mindset. This means you need to have specific areas of knowledge and a willingness to adapt processes that would in turn enable quicker movement through the corporate system.
We need to go from having the teams that are involved in the RFP move from being generalists to creating pockets of knowledge specialists within the various functions. We need to get the teams that run the RFP processes trained on different technology spaces and areas of marketing. This means that there would be specific individuals in the different departments (e.g. legal, IT, contract management, etc.) that are familiar with specialties like social media, CRM, loyalty marketing or search engine marketing.
Additionally, we need to create the ability to accelerate through steps in the RFP process that may slow things down unnecessarily. I’ve seen too much time wasted in the process for things such as multiple evaluation rounds. In other instances I saw the process slow to a crawl just to allow for some teams, that only played a minor role, provide feedback on an element of an RFP that wasn’t really needed.
I am pleased on where we landed with the firms we selected coming out of our two RFPs. However, I can’t help but think that we lost out on an opportunity. We could have acted quicker, impacted our marketing sooner, and created even better partnerships with our vendors if we were able to affect the RFP process and act with the kind of speed in which our consumers are moving. That is something that we should definitely strive for going forward.