RFI vs RFP: How to Respond
When working with clients, you may be presented with two types of documents: an RFI or an RFP. Both are used to learn more about your company and your offerings, and you should approach each response differently. Read on to learn about the difference between an RFI and an RFP and how you should handle each type of request.
What is an RFI vs RFP?
RFI
RFI stands for “Request for Information.” An RFI is exactly what it sounds like. Companies release RFIs to learn more about potential vendors and possible solutions for their organization. Many RFIs want an overview of a solution or approach to a problem and do not ask for specific pricing, but they may request a general idea to help set their budget. RFIs come before RFPs, but not every organization releases an RFI first. In some cases, passing the RFI is required in order to be able to respond to the RFP.
RFP
RFP means “Request for Proposal.” Unlike the RFI stage, an RFP is the official request for vendors to propose solutions, including detailed proposed pricing. The RFP is used to evaluate potential companies and is one of the last stages of the buying cycle for many organizations. After you submit a proposal in response to an RFP, you might be invited to present or negotiate, but there typically aren’t many more steps after you submit the proposal.
How to Respond to RFIs
Since an RFI is about gathering information, it’s important to share information that can help the customer make their best decision. It’s common to use the RFI response to position your specific solution. For example, if the organization is considering either a custom-built solution or an off-the-shelf option and you offer custom-built, you will use your response to outline why for their particular challenge a custom-built solution is better. The RFI stage is about narrowing down the solution and the field of vendors, and you should keep this in mind when developing your response.
The RFI is also an opportunity to position yourself to be able to respond to the RFP in a way that works best for your company. For example, if the RFI asks broad questions about a topic where narrowing down would better position your company, you can highlight why it is important to consider that particular topic in your response. At the end of the day, the customer will choose the solution best suited to their needs, but if you believe that your solution is the best, it’s important to show why at this early stage.
How to Respond to RFPs
When responding to an RFP, remember that you are creating a physical sales pitch for a prospective customer along with many competitors. This means you need to create a document that is engaging, clear, and compelling. Your proposal should directly address the customer’s pain points and focus on how you solve them. Oftentimes evaluation committees for RFPs include individuals of all backgrounds, which means you need to make sure your content and story are clear for someone who might not be an expert in what you offer.
RFPs are by nature competitive, and it is important to address the competition when creating your response. Highlight your unique position and, where appropriate, contrast those strengths against your competitors’ approaches. There are key sections of content you want to include, but many times RFPs include a format and specific questions that you should follow.
Where to Find RFIs and RFPs
Now that you understand the difference between RFIs and RFPs, it’s time to start responding. The tricky part of responding to RFIs and RFPs is finding them. Public agencies (i.e. government) are required to make their solicitations public for any organization. Private companies do not have to do this, and they instead request proposals only from the vendors they select.
If you support government and education clients, reviewing a bid aggregator, such as BidSync, can help you to find new opportunities.
If you work primarily with private clients, you need to develop a larger marketing and business development effort to engage with those clients before they reach the RFP stage. Once you establish those relationships, you’ll be invited to submit proposals.
What About RFQs?
RFQ can stand for two types of requests: Request for Quote or Request for Qualifications. While the acronym is the same, these two requests are very different.
A Request for Qualifications is very similar to an RFI only it is focused exclusively on the qualifications of your company and may not even ask questions related to the specific scope of the project. RFQs of this type occur pre-RFP, similar to RFIs, and they often are used to shortlist vendors before the actual RFP is released. For example, an RFQ may be released prior to a large construction project to identify qualified firms and further discuss the actual scope of the project before releasing the formal RFP. Oftentimes, only those firms who “pass” the RFQ phase are allowed to bid on the opportunity. This shortlisting component makes qualifications-based RFQs an important step in securing the contract.
Requests for Quotes, on the other hand, are focused primarily on price. When requesting quotes only, an organization likely already has a good idea of what exactly they need to purchase, down to detailed specifications. Because of this, most RFQs for quotes are for standard products for a certain quantity. For example, if the organization is planning to purchase 5,000 Dell laptops, then they will request quotes from several vendors who can provide Dell laptops for the specific specs and other purchasing needs that they require. These requests often are almost exclusively awarded based on price and require very little information besides a price quote. Since they are for a specific type of item, agencies will purchase directly as a result of the RFQ without need to go to RFP. The faster award process for simple purchases makes RFQs appealing for both buyers and sellers alike.
When you find either an RFI or an RFP, make sure you carefully read all documents and know how to respond. Craft your position, check all of the boxes, and you may find yourself with a brand new contract for your company!
Need more help with RFPs?
Check out RFPs 101, a course that dives into what exactly you need to respond to an RFP.