Skip to main content

We are experiencing issues with the ASCPA website, which is affecting the ability to update credit card information. Please check back on Monday, April 22. If you need additional support, please email membership@ascpa.com.

Rethinking the RFP

February 10, 2023

By Kevin P. Cummings, ARM, CIC

Business leaders often turn to traditional request for proposals, or RFPs, when considering hiring outside consultants or brokerage firms. Most RFPs make it more difficult to distinguish one firm from another, the exact opposite of the desired intent. Unfortunately, it isn’t until you spend the time, money and energy to engage a new firm that you really see how closely their true value resembles their proposal.

The typical RFP process is broken. Here’s why, and some suggestions for how to improve it.

After over 30 years in this business, I can tell you the traditional RFP process has not changed much. It should. Why? Because the traditional approach asks the same dull questions and solicits the same dull answers that can be – and often are – cut and pasted from other RFP responses for companies that are nothing like yours. It is time to change the traditional RFP process.

Start With Quality Over Quantity

You very likely have a sense for which firms are worthy of consideration before you even start the process. If you don’t, ask colleagues, business acquaintances or industry peers for suggestions. Talk with the firms you were referred to prior to sending your RFP to anyone outside of that list. Blindly sending an RFP to a firm you know nothing about or to more than three or four different firms will waste precious time you likely do not have. During those initial conversations, here are three important things to consider:

  1. Is their culture a suitable fit with yours? You don’t need to be best friends, but are the personalities a fit? Do their teams appear to work well together? Will their team easily collaborate with yours?
  2. Do they have the expertise and resources you require?
  3. If you sense that the communication is awkward, challenging or that you are being fed a “line,” don’t ignore that. You probably are. Trust your gut.

Better Questions = Better Answers

Standard questions get standard answers. Most consultants and brokers use answers from other RFPs to respond to yours. Good answers are tailored to the firm asking the question, but even specific questions can elicit very similar answers from different firms.

Some alternatives to typical questions

  • Rather than “What is your fee?”, ask: What are your views on broker compensation?
  • Rather than “Tell me about the history of your firm.”, ask: What do you suggest are the most important considerations in making our broker selection?
  • Rather than, “How would you handle our renewal?”, ask “Given your review of our company, our program and our claims history, what recommendations do you have?”
  • Rather than, “Are you big enough to handle our account?”, ask “We have offices in 12 countries and 48 offices across the U.S. How will you serve us wherever you are needed?

Changing the Status Quo

Consider having the broker ask you questions – and be prepared to answer them. By turning the traditional process around and looking at it from the other side, you will be able to challenge the broker’s critical thinking, creativity and business acumen. And, in return, you will get more honest, authentic and diverse answers that will help you distinguish between the firms you are considering.

When evaluating your conversation with each firm, think about how their questions helped demonstrate their underlying knowledge and whether they provided insight into their grasp of your industry and your business.

One way to do this is to describe a set of circumstances surrounding a challenge you’re facing and ask the brokers how they would address the issue; this may provide solutions you have not considered. Isn’t that what you are really after? If you already know how to handle the problem, your broker is not bringing much value.

At some point in the process, you will need basic details like:

The appropriate place to establish these details is during the prequalification process. This allows the actual RFP response to focus on more significant issues.

If you decide to have the consultants or brokers send their own proposals, rather than responding to yours, and have them offer their own questions and answers to demonstrate their capabilities and differentiators, consider these tips to ensure some basis for comparison:

  • Provide an overview of your company and its unique characteristics and challenges
  • Outline the basic questions or factors you will need answered as a comparison between firms
  • Specify the format, timeline and length of response
  • Limit the number of questions each firm can ask

This approach not only helps you narrow the field of candidates, it will allow you to drill down in greater detail on the things that matter most during the oral presentations.

Using an approach like this will help maximize the return on all parties’ investment of time and talent by creating more valuable information that will help you make better decisions for your organization rather than wasting what little time you have.

Here’s to thinking differently and actually getting what you want out of an RFP!

Kevin P. Cummings, ARM, CIC, is partner and president – Southwest at Lockton Companies. Cummings will speak at the ASCPA’s Not-for-Profit Conference on June 23, 2023. Register at www.ascpa.com/npc.