Proposals, RFPs, Tenders – what are they and which should you use?
Proposals vs RFPs vs Tenders – what are they and which one should you use?
There are several ways to secure new work, whether you’re pitching to a new client or expanding work with an existing one. Three of the most common documents used to win work are proposals, RFP responses and tenders – but they’re often confused or used incorrectly.
PROPOSALS
Picture this … you meet someone at a networking event, or you get introduced to a potential client by a friend or colleague. You tell them what you do, and they say something along the lines of, “Sounds interesting … can you send me some information?” You get back to your desk and email them your company brochure.
That is not a proposal. It’s a brochure, a company overview or a capability statement. It’s usually a generic piece of marketing material that you already have on hand.
What makes a proposal different is that it is produced in response to a specific problem or need.
Go back to that conversation or email chain with the person you were introduced to. Instead of just telling them what you do or what you sell, have a conversation with them about their organisation and their needs. Try to determine whether they have any issues that you can help with.
That might be a bit too much for an initial conversation. So invite them out for coffee or schedule an online meeting to have a more in-depth discussion.
Then, and only then, are you in a position to provide them with a proposal. By definition, a proposal involves you proposing to do something specific. It is not a generic “about us” company brochure.
An effective proposal is:
tailored to the client
focused on their needs, not your credentials
written to demonstrate understanding, relevance and value
There is an art and a science to writing an effective proposal – one that will actually get read and used by decision-makers. Most importantly, a proposal is about the reader, the potential client, the buyer. They’re looking to see if you understand their business and their needs – and they want confidence that you can help.
Common proposal mistakes
Too many proposals focus on the supplier rather than the buyer – long company histories, excessive credentials, and very little about the prospective client’s actual problem. Talk to us about how to do this properly.
RFPs
An RFP (Request for Proposal) is a formal procurement document issued by an organisation seeking proposals from the market.
RFPs differ from proposals in that they are part of a more formal procurement process that a company uses when looking for a supplier. An organisation might be looking for a new supplier to provide IT services, product packaging, marketing help, construction work, etc. RFPs are used in a broad range of sectors.
They are most commonly used by government agencies/departments or by large corporations. This is usually because the expenditure is large enough to warrant a publicly transparent process and the project demands set deadlines.
An example would include the Ministry of Education needing a new supplier to provide trades services for the building of a new school. Another example would be a large telecommunications company needing a new IT support firm or a new advertising agency. RFPs, however, are also used by non-governmental organisations or smaller firms. A property developer may run a formal RFP process when seeking builders, electricians, plumbers, etc., for a new development.
There is a specific project in existence or under development when an RFP process is used. The buyer “goes to market” by issuing an RFP through platforms such as Government Electronic Tender Service (GETS), TenderLink, industry websites or direct invitations. The request document outlines the scope, evaluation criteria and response requirements.
Suppliers respond by the deadline – often using a prescribed format or response template – with answers that are weighted across price and non-price attributes.
Strong RFP responses:
follow the structure requested
address each question clearly and concisely
respect weighting
demonstrate relevant experience and value, not generic capability
Common RFP mistakes
Too often, responders will write what they think the buyer wants to read – or they’ll provide too much background information – without specifically answering the questions.
It’s essential to answer the questions being asked, pay attention to the weighting of each question, and follow the format provided to make your response easy to read – while also highlighting your unique points of difference. In an RFP, you want to demonstrate that you can provide the work, that you’ve done it before, and that you will be a valuable partner in the long run. Talk to us about how to do this properly.
TENDERS
The main difference between an RFP and a tender is that with a tender, the buyer is seeking a priced offer. The scope, specifications, and requirements are largely fixed, and there is usually less flexibility in how the services are offered.
Because an RFP is a request for proposal, there is more flexibility around methodology. The buyer has a need or problem and is looking for possible solutions in the marketplace. They’re asking potential suppliers how they would deal with the issue and what it would cost.
With a tender, the buyer knows what they need, and they’re looking to see who can provide it and at what price. Deliverables are clearly defined, and there is heavy emphasis on compliance and commercials. Tenders are often used for very specific or niche work … examples include road resurfacing, earthworks and drainage, school bus services, freight contracts, medical equipment supplies, manufacturing and fabrication. In these instances, the buyer will stipulate what they need, then determine who has the experience, credibility, and pricing that match their needs.
This is not to say that an RFP process couldn’t be used in any of these examples – the point is to understand how much innovation or flexibility the procuring organisation/the buyer is seeking.
Common tender mistakes
The biggest mistake here is not paying attention to the detail provided.
When data is provided, make sure you use it and price accordingly. If you’re going to offer other options, first ensure that the buyer is open to receiving alternatives. These are often referred to as “non-compliant” bids. Before you submit one, make sure the reader is receptive to receiving them (either as your standalone bid or as an accompaniment to your compliant response). Talk to us about how to do this properly.
Proposals, RFP responses and tenders all require different thinking, different writing styles and different levels of rigour.
They also take time.
Engaging a professional copywriter with experience in business development documents can significantly improve clarity, alignment with buyer expectations, and overall success rates.
If you’re preparing for an upcoming opportunity – or aren’t sure which approach is right – feel free to get in touch to discuss the best way forward.
SIDENOTE: The world of procurement and pitching is full of acronyms, so you may also hear the terms: EOI (Expression of Interest), ROI (Registration of Interest), RFI (Request for Information), RFQ (Request for Quotation), RFT (Request for Tender). Don’t stress – we can help decipher these for you as well.