RFPs

RFPs

Do you enjoy submitting on a Request for Proposal—RFP? I know many people who refuse to submit on them. But I understand they are a necessary evil for some organizations. I often see them used in the wrong situations that get the issuing organization the wrong or bad results. The reason this came up was that I was on a Zoom call with a few peers, and we were talking about business and how it was going in “year 2” of the pandemic. I commented that we had more inquiries for business and more RFP submissions in the six months between November 2020 and April 2021 than we had ever had in any six-month period before. For some of the inquiries, we were not the solution so I passed them on to someone who could better help them. Others we pursued, did discovery sessions, and either did or did not get the business or we are still working through to proposal development. But as we often preach, discovery sessions are critical. We need to understand the client really well to be able to build a proposal that works for them. But the focus on this call shifted to RFPs.

I typically dislike RFPs because they are often issued by an organization that has never done a commercial naming right before or has not had a professional sponsorship program in their organization. But they and their procurement department (that knows nothing about sponsorship and naming rights) post an RFP—and it is awful. The timelines are too short, the budget is inadequate (or too much), or they are asking for the wrong services. We have learned not to reply to these. But in that six-month period, we responded to all of the RFPs in front of us. We did so because they were well written and came from an educated understanding. The organizations had done their legwork. They knew their goals and objectives; they knew what needed to be in the RFP, and what were reasonable timelines and budgets. No, we did not win them all, but we submitted on them all and won our fair share—OK, slightly more than our fair share!

I want to share three points of discussion that arose on that ZOOM call and hopefully you can take away some key learnings.

  • For government agencies, an RFP is often a requirement over a certain budgetary threshold. That is understood. But if you have to issue an RFP, do your research first. Talk to agencies and proponents in advance and understand the delivery process, budget ranges, and such. Recently, I had a conversation with a government agency looking to have an IAV (Inventory Asset Valuation) done. They spoke with me for almost an hour and also with three of our competitors. I look forward to seeing that RFP. It will probably be great. They will have done their homework and there will be no surprises for the submitters. More importantly, the organization will get the product it needs!
  • The sponsorship industry is a relationship industry. It is not like buying pickup trucks, photocopy paper, or hallway tiles. Those are commodities that organizations buy over and over, are pretty straight forward, and have set specifications. Selling your sponsorship naming rights, building your IAV, monetization strategy, or policy are intricate products and services that can vary greatly. We can do an IAV for a single sheet arena or an entire city. We can build a commercial naming rights policy or overall policy for naming rights that includes donor-based naming, commercial based naming, historic naming, geographic naming, or recognition naming. Spend time getting to know the proponents versus just a “black and white” RFP submission. Understand why one submission might be really low while another is higher. Are they offering apples and oranges, or is the less expensive one only apples? We talked about one scenario where one of my peers won a contract through an RFP. They had low-balled, but they offered only the IAV itself—no strategy, policy, analysis, or advisory support. The other proponents had included policy, strategy, and advisory support because they knew these are critical elements for success, but they came in higher. The organization bought the low bid, but then had to add on the other elements as they discovered their need for them. Ultimately, they paid 20% more than the highest bid on the RFP. The lowest bid did not turn out to be the lowest bid in the end. Get to know your proponents, get a feel for a level of trust and build that it into the model for criteria—not just price.
  • Finally, we all agreed that if you are looking for naming rights on your facility, DO NOT issue an RRP. This diminishes the opportunity for relationship development and makes your naming rights a transactional commodity rather than an asset with goodwill associated. Furthermore, you may leave money on the table based on additional assets and opportunities. None of us could recall a naming right being renewed that was originally won through an RFP process. Think long term, not short term. If you want to let people know you have assets for sale, naming rights opportunities, or you are looking for “low hanging fruit,” then issue an Expression of Interest (EOI) versus an RFP. It gives you more flexibility, does not require you to “define the terms and assets” in the RFP, and allows you to have discovery sessions with prospects versus selecting a partner via predetermined terms and assets. It is like selecting a bride from a mail order catalogue with no prior correspondence. As one person on the call noted, the RFP is the lazy person’s way to try and get a naming right versus doing the necessary work.

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3 Comments

  1. Hey Brent,
    Quick question. What exactly do you mean by “analysis” in terms of the IAV?
    Thank you, as always!

    Reply
    • Josh,
      Analysis is the review and defined outcomes of the IAV. IN our case we write a report that identified what we discover in doing the IAV (assets and values) and what that means to them, how much they can generate etc. IN this case there was no analysis of the spreadsheets for the client… no report… just the list of assets and their value. They had to pay extra for the analysis. Just like a doctor analysis the outcomes of your MRI or blood test and then explains what the results mean. In the same way the IAV should be analyzed and an explanation / understanding of it delivered.

      Reply
      • Sounds good.
        Thanks Brent!

        Reply

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