Hi everyone,

I’m sure you will all be familiar with the iceberg analogy which is used for many business-related topics these days. Typically, about 10% of the volume of an iceberg is above water which follows from Archimedes’ principle of buoyancy. The other 90% is below the surface and is difficult to see.

Do you know that this principle applies to RFP’s as well? As a seller, you only see a small fraction of the entire buying process.

In 2 Daily Sales Tips, I’ll share the 16 steps a buyer has taken before you actually get to see the RFP. They are in chronological order although that can depend on the buyer you’re dealing with. Today, I’ll share step 1-8.

Step 1. Market assessment

The very first step for a buyer is to assess the market. How does the market look like currently? What are the dynamics on this market? And importantly, are there enough suppliers available?

Step 2. Decide on procurement approach

If there’s only one suitable supplier on the market, buyers will prefer to negotiate directly with them. Otherwise, they will focus on running an RFP. Obviously, they need competition to get the best result from an RFP.

Step 3. Project team creation

Next, buyers will form a team with their internal clients to ensure the outcome is accepted throughout the organisation. Mainly, these team members focus on quality, service or they are technical experts in their respective fields. As a seller, having this information helps to be able to influence the decision-makers.

Step 4. RFP scope agreed

The whole team then agrees on the scope of the RFP process. They decide what is in and what is out of scope. This also includes a decision to source locally, regionally or globally.

Step 5. Objectives setting

During this step, the team decides what they are trying to achieve. Is it just about price or do they focus on quality, service, risk, sustainability and/or other criteria? From a sales perspective, it definitely pays to have access to this information.

Step 6. Senior management sign off

During this step, the whole project team presents the plans to the senior management team for sign off. If they don’t sign off, it means going back to the drawing table. Otherwise, they can proceed as planned.

Step 7. Stakeholder mapping

Once they have received an ok from senior management, they map out all stakeholders who are directly or indirectly impacted by the RFP. This way they ensure the project can be executed once the final decision is made. If a buyer skips this step, it might mean they have troubles later on trying to implement the final outcome.

Step 8. Tender time plan creation

It’s now time to create the tender time plan. Typically, this means working their way backward starting with the implementation date. As soon as this step is completed, all internal and external meetings can be fixed.

That’s it for today. I’ll be back shortly with steps 9-16.

Happy negotiations everyone!