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Apr 1, 2004 12:00 AM
Mention the new buying environment in polite company and two things usually come to mind: the reverse auction, in which the lowest online bidder by a specific deadline wins the job or contract; and the request for proposal (RFP), generally considered by the print community as a plot by larger buying organizations to occupy estimators for a week, calculating figures that likely will never be used.
Many printers have actively debated the wisdom of even participating in one, or both, of these exercises. Some of these companies have drawn a line in the sand, concluding that bidding in reverse auctions and completing voluminous RFPs are not productive uses of their time.
I've seen dozens of RFPs in recent years. It's apparent that the majority of them were written by committees inexperienced with custom-manufactured product purchasing. The idea to circulate an RFP often emanates from two national consulting firms, who promise a cost savings that resembles the national debt and cast aspersions about the dangers of continuing relationships with long-term suppliers.
The RFP typically discourages questions from prospective suppliers, asks for written procedures on quality assurance and communicates that, in the end, pricing is the only thing that counts. No two printing companies or situations are the same, but, in our experience, many mistakenly consider RFPs as just another manifestation of a buying community whose sole interest is in squeezing every last penny out of graphic-arts firms or service providers. Prospective suppliers interested in responding to an RFP should think twice about treating it as a mere pricing exercise and leaving an estimator and sales representative to prepare the document without management participation.
Yes, answer the questions and supply the prices that are requested, but also read the RFP carefully for clues about issues that, in addition to price, may be significant to the buyer. Examples of such items that often appear in an RFP are:
After discussing the fact that these factors may be of above-average importance, and directly responding to questions and prices in the RFP, consider taking the extra step of constructing and submitting a plan, in addition to a proposal.
If financial stability appears to be an important issue, try to include a letter from your bank regarding your company's financial condition and the lender's willingness to support your firm if it becomes a preferred vendor to the company soliciting the RFP. In the case of other issues listed above, be specific. Indicate capabilities for online communications as well as methods you'll take to ensure the security and confidentiality of your customer's information. Include the names of backup resources with which your organization has, or would have, an agreement with, guaranteeing the customer seamless service or data retrieval in the case of a disaster or production failure.
Don't let the “price is the only thing that counts” tone of the RFP dissuade you from learning everything worth knowing about the buying organization's operations. A midsize sheetfed printer received an RFP from a Fortune 100 company, a 12-division consumer-products firm. The president contacted the purchasing managers of all 12 divisions, only one of whom he knew. Each told the same story — irregular, unpredictable demand for collateral material often resulted in out-of-stock conditions that, in turn, necessitated expensive “emergency reruns.”
That information led to a proposal in the RFP for the planned production and stocking of a five percent average, at no cost to the client until used, to reduce or eliminate the costs connected with emergency reruns. As a result, the printer was awarded preferred vendor status.
The sad ending to this (and too many similar stories) is that, within a year or two, the entire RFP exercise led nowhere. The consultants who instigated the exercise went on to another company, and the committee of purchasing experts apparently vaporized.
So, should you participate in the RFP process? Sorry, but that's your decision.
Finally, those who have read my columns and who have heard me speak would be disappointed if I neglected to suggest that no plan, no proposal and no sales call should occur without a credible, meaningful explanation of the unique benefits that would accrue for the customer if it were to do business with your company. That's the heart of all account development.
Dick Gorelick is president of Gorelick & Associates and the Graphic Arts Sales Foundation. E-mail him at email@example.com.