Companies have better opportunities to find the right partners.
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Opinions expressed by Entrepreneur Contributors are their own.
In a world where the personal touch is important, why are companies still using an impersonal method to find the right vendors?
Organizations that rely on outdated Requests for Proposals (RFPs) to find the vendors they rely on on a daily basis make decisions in the dark. The proposal may look good on paper, but what are the personalities of those who will be servicing the account? What experiences do you have?
Why should a company trust a partner without knowing anything about their true talents and experiences? It is long overdue to put RFPs on the shelf or to stop using them immediately.
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Why do tenders fail?
An RFP is what it sounds like. A company calls on vendors and asks them to come up with business proposals to provide certain services or goods. These paint-by-numbers suggestions end up delivering memorized answers to a list of unspoken questions that often have very little insight into the vendor's culture, values, or how they can address the company's real needs.
If a company or non-profit organization uses an RFP, one might think that it could provide enough insight to help them select the best partner at the best price, but it is not. Asking prospective vendors to answer the same questions might be consistent, but it's very deep thinking.
The process doesn't help convey whether the vendor's culture and values are compatible with yours, and it narrows respondents as they are unable to come up with customized suggestions that go beyond your obvious needs Corporate go out.
Standardized questions lead to crisp answers. Sometimes the greatest service a provider can offer is helping businesses see what they really are need instead of what they want. I run a public relations agency and have seen situations where companies may post a bid for a new logo, but what they actually need is positive publicity and a solid recommendation for community initiatives to be pursued to generate goodwill. You will not get this answer from an offer.
Who do you trust
Choosing a provider as a partner is not to be taken lightly. You are giving an outside party an oversized influence on your business. This takes a lot of confidence that you are putting the business in the right hands.
Companies that continue to rely on RPPs are doing themselves no favors. The process does not replace due diligence when selecting a provider. In fact, many talented and skilled vendors simply do not respond to requests for quotations. In my experience, they are a waste of time. I'd rather be in direct contact with companies and hear about their struggles and challenges so we can develop a bespoke strategy that suits their needs and budget.
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Hiring a supplier means entering into a relationship. It should be based on many factors that cannot be determined by reading a document. A tender creates suggestions for obvious solutions to textbook problems and is not a way of assessing the value a vendor could add to your business.
There are so many subtle factors involved in choosing a partner. Companies that perform best with vendor partners will select them based on compatible cultures, in-depth knowledge of their specific industries, and whether their core values match.
A better way
To find the right providers, talk to more companies. Rate them based on their culture and unique talents and skills. A provider should be able to tailor their services to the needs of your company. Ignoring the issue of compatibility is a guaranteed avenue of remorse for the buyer. If your company needs to find a vendor, be proactive:
- Look for reputable vendors with direct experience in your industry
- Get to know the company leaders and familiarize yourself with the company culture and values
- Do your homework by interviewing their current and past clients
- Research and read content created by the providers
- Look for vendors mentioned in industry-specific discussion groups
RFPs may be a traditional way for companies to search for vendors, but in my experience they are far from useful. Before entering into any relationship with a vendor, you need to better understand who they are and what they can do for your business. Take a closer look to find the vendor you really need, not just a company that is good at filling in the blanks.