These Practices Can Give Dealers an Edge When Submitting Proposals

By Tim O’Connor

Bid work has long been a part of the foodservice equipment and supplies industry as operators see the competitive bidding process as a way of getting the best price and value from distributors. But with high inflation over the past year, there are signs that even more companies are using the bidding approach. According to a study from Loopio, a request for proposals (RFP) response platform provider, surveyed companies now source 39 percent of their revenue from RFPs, up 6 percent from 2022.

That shows there is a lot of opportunity for dealers to pursue competitive bidding. But as the number of bids grows, the process itself appears to be getting even more competitive. The win rate for companies responding to bids was 53 percent in 2019, but that fell to 44 percent in 2021 and has held steady for the past two years, according to Loopio’s data.

So how can dealers create an advantage when responding to an RFP? Developing a standardized and proven process helps companies prepare better responses and make them more likely to win a bid. It can also ease the process on the dealer’s side, enabling them to submit responses more quickly and reduce the cost of preparing the bid.

1 Careful Selection
Responding to an RFP is time consuming and can eat up a lot of staff hours. Loopio found that 55 percent of surveyed organizations have a dedicated proposal manager or team and that the average time for writing a single RFP response is 32 hours. That’s a significant investment on behalf of a business, so it’s vital for dealers to ensure they are only picking projects that they truly have the capability and availability to win.

Identifying those promising projects is not always straightforward, but it can help to develop dispassionate scoring criteria for evaluating an RFP to make a bid or no bid decision. VisibileThread, a company that specializes in business communication, recommends weighing several factors. Criteria can include familiarity with the client, similar successful work the dealer has completed, delivery deadlines, and any red flags in the RFP. One such red flag may be if the RFP is written to give an advantage to a preferred supplier. Dealers could closely read any questions in the RFP or requests for specialized equipment to determine whether they indicate that there is a preferred supplier. If so, respondents will need to weigh whether their company can overcome that predisposition and win the bid.

Finally, businesses could take care to respond only to RFPs where they are confident the client won’t share their proprietary bid information with competitors. This is vital to a fair and honest bid process and necessary to protect competitiveness.

2 Read the RFP Closely
A thorough RFP is usually packed with information on equipment specifications, deadlines and expectations for the supplier. Dealers will want to read the RFP carefully to ensure their response addresses all criteria and that they understand every deadline. In some cases, the dealer will want to review those requirements with outside stakeholders, such as equipment manufacturers, to verify whether they can deliver the requested items or services on time.

Responses that have incorrect dates or have incorrect products listed are likely to be the first ones rejected by the client. So, equipment dealers should double check their work lines up with the RFP before submitting the response. Additionally, some RFPs may have specific equipment requests. If a dealer is unable to procure that exact equipment model, they can offer an alternative comparable to the desired item and note this replacement.

3 Identify Your Win Themes
When drafting the response, dealers will want to give themselves and the client a sense of their win themes, which VisibleThread defines as “compelling reasons why your organization should be awarded this work over any other bidder.” Understanding those win themes early in the drafting process can help the proposal team stay focused on its messaging throughout the bid process. The final response should not only provide all the information the client requested but convey to the client why the business can deliver the best outcome and why they are experts in this area.

An executive summary at the beginning of the response can help to quickly set the stage for what a dealer can do for the client by reinforcing those win themes while honing in on the project’s objectives.

4 Be Clear and Detailed
An effective RFP response will make it clear what the dealer will provide and at what cost. Detailed and itemized pricing will help the client compare bids while giving them confidence that the dealer can deliver each piece.

If the project has multiple phases or components, the dealer could break down pricing for each section so the client can better understand what they are charging for each scope of work. Stack, a company that offers construction management tools and bid work resources, notes that even if a company lists higher prices than its competitors in one area, breaking information down into specific scopes can show the business is more competitive elsewhere, increasing the likelihood of winning all or part of a bid.

Of course, providing accurate pricing can be difficult when the project’s fulfillment is a long way off. In those cases, dealers could note the possibility of price increases that could occur in the period before the equipment is delivered or the expansion begins.

Depending on the scope of the project, dealers could include drawings or renderings of their work. Information about the implementation plan, including the timelines and which team members will be working with the client, is also valuable.

Finally, Ideagen, a company that provides software solutions to high-compliance industries, recommends that the RFP response avoid jargon. Technical terms that the client may not be familiar with only serve to create confusion. Plain English is best for clarity.

5 Promote Your Added Value
The RFP process is intended to encourage the lowest bids, but the total price is not the only consideration. Many would-be providers of equipment and other services have lost out on a project despite submitting the lowest price because they had poor references or a competitor offered a more appealing overall package. Including information on value-added services and knowledge can help a proposal stand out from the competition while demonstrating expertise, according to Stack.

An effective RFP response will highlight references and showcase similar completed work. Experience and verifiable capabilities can make up for price differences. Clients want confidence that the bidder they select will deliver the equipment on time and without issue.

Even if a bid is not successful, there is still a lot of value that can come out of the process. Bid responses can serve as a knowledge base for future proposals, giving distributors a starting point from which they can build out the next response. Failed bid responses can also be analyzed to identify reasons why the business was not awarded a contract. The insights gained from that review can then be used to improve operations, identify opportunities to expand capabilities and understand how the company stacks up to competitors. Acting on those insights will not only make a dealer more likely to win future bids but can also help deliver better value to existing customers.