How losing a request-for-proposal bid can be the start of something big Featured

8:00pm EDT May 26, 2010

Philip S. Krone, founder and president, Productive Strategies Inc.In last

month’s column, Philip S. Krone of Productive Strategies Inc. talked about the myths

and realities of requests for proposals (RFPs). He told the story of a firm

that lost a major potential engagement, even though the prospect had assured

the firm’s partners they would be awarded the business. Unfortunately, a

competitor “out-discovered” them and, in effect, rewrote the RFP to reflect

what the fundamental, underlying concerns of the prospect were in addition to

those described in the RFP.

Smart Business spoke with Krone to learn what happened next.

We recommended that the partners

make a personal visit to the prospect to learn why they lost out. Although not

their standard operating procedure, they made the trip about three weeks after

losing the RFP. What did they learn?

A new lesson in how personal

visits can pay off as relationship-builders

The prospect said: ‘We haven’t

seen or heard from the firm we gave the work to in the three weeks since we

awarded the contract, and you’re here, even though you lost!’

The prospect was no doubt

thinking: ‘This is impressive, but they’re not going to talk me out of my decision.’

How to play for the ‘next call’

Before their visit, we reminded

our clients that coaches often argue with officials over a close decision that

goes against them. They’re not necessarily expecting to change an official’s

mind on a specific call. But they are expecting to gain an advantage for the next call that might go either way.

Similarly, our clients were making

the trip not to argue for the business

they had already lost but to gain an advantage for getting business in the

future. They were going to ask the right questions in the right way to discover

the issue their competitor used to revise the RFP to their advantage.

Why they lost the RFP

Although the prospects did want to

solve the problem described in the RFP (an international tax matter), deep down

they were much more worried about how large the problem might turn out to be.

They had almost no idea, and the winning bidder discovered that worry and used

it to his advantage.

What their competitor did

• He proposed a much less

expensive audit of the problem — about 80

percent less expensive, in fact: $60,000 versus $300,000.

• He revealed his expertise

by showing the prospects that as the seller he knew more about the implications

of solving the problem than they did as the buyers. (It’s important to

understand that buyers writing up RFPs usually don’t know all of the challenges

or beneficial outcomes.)

• He delivered very real

value during the sales process by clarifying their concerns for them before he was ever paid a penny.

• He positioned himself and

his firm to get the larger job for which the original RFP was written. After

performing the audit, he would know the issues inside and out and would be the

likely choice to take on the larger, more lucrative job of resolving the

problem itself.

What a slap-in-the-face lesson

about effective sales discovery feels like

Our clients returned from their

visit re-energized and continued to think of the company as a viable prospect.

But they did more than think about it. At our suggestion, and with our

assistance, they successfully stayed ‘top of mind’ with the prospect over the

next six months.

Many companies and firms

understand the value of keeping their name in front of prospects and clients

through regular communication. But too often it’s the ‘just checking in to see

if there’s anything we can do’ variety. That kind of communication does remind

the prospect you’re alive and kicking. But after one or two such reminders, it

begins to rankle. We recommend that a seller deliver value during the

process of staying top of mind.

So, what happened?

The competitor seller, though

clearly good at performing discovery, apparently wasn’t so good at doing the

work. After some frustration, when the prospect’s executives finally got a

handle on the size of the problem, they just called our client instead of

putting out a second RFP. The end result was that our client got the assignment

for which they were originally rejected. Plus, over the next few years, they

earned literally millions of dollars in fees from this company.

Understandably, companies can be

too embarrassed, discouraged, or even angry to engage a prospect after being

told ‘No!’ so emphatically. But we know from experience (our own and that of

clients we’ve counseled) that lost prospects can reveal more juicy secrets about

buying motives than your best customers ever can.

Philip S. Krone is the founder and president of Productive Strategies Inc., a 17-year-old Northfield, Illinois-based management and

marketing consulting firm. Productive Strategies provides clients with

particular expertise in sales process development, lead generation and

appointment setting, marketing and marketing communications. Phil can be

reached at (847) 446-0008 ext. 1 or