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Turning RFPs Into Consulting Opportunities

Written by David J. Witz CEO of PlanTools and published on the Summer 2020 issue of Plan Consultant magazine.

What mind set do you have when you approach a Request for Proposal (“RFP”) engagement? Is it the “agony of defeat” or the “thrill of victory”? I suspect your answer may depend on whether you won the project to conduct an RFP on behalf of a client or won the engagement after responding to the RFP.

However, whether you conduct or respond to RFPs on an occasional or regular basis there is an overwhelming agreement that it is an agonizing process requiring the attention of multiple subject matter experts within extreme time constraints to craft a compelling response or structure a carefully worded question that gives you or them the information you or they need to make the best decision.

RFP Frustrations

If you have participated in responding or requesting an RFP, you are all too familiar with the many common complaints associated with RFP activity such as,

  1. They take too much time,
  2. They are a distraction from other productive work that pays the bills,
  3. The close ratio is very low,
  4. It is often a process to fill the file to demonstrate reasonable fees with no intention of making a change,
  5. We never have the time to construct compelling responses,
  6. It feels like we are always starting over with each new RFP, and
  7. I’m never told why I lost so I have the opportunity to address deficiencies that might help me win opportunities in the future.

Of course, the competitive spirit within all of us compels us to read the RFP which creates the temptation to respond unless the opportunity is completely outside of your wheelhouse. This approach is often the beginning of the end for the responder because the response is reactive instead of proactive. In other words, never respond to an RFP that you don’t intend to win even if the odds are not in your favor. This requires a concise response or in the words of “The Elements of Style,” by Strunk and White,

“Vigorous writing is concise. A sentence should contain no unnecessary words, a paragraph no unnecessary sentences, for the same reason that a drawing should have no unnecessary lines and a machine no unnecessary parts. This requires not that the writer make all sentences short or avoid all detail and treat subjects only in outline, but that every word tell.”

Every RFP is a test of your ability to communicate your elevator pitch. The process should be one of self-discovery and it should impact future decisions related to the deployment of capital that is designed to improve your competitive posture. More importantly, your responses to RFP questions become your template for the development of a new profit center…your procurement department.

The Procurement Department

A procurement department functions as a subject matter expert and project manager. Who better to conduct an RFP for a particular service than a party that is deeply engaged in that activity? Suffice to say, the best person to evaluate talent is someone that has that talent. Granted, the common objection by your competitor responding to your RFP is their hesitancy to divulge their trade secrets but this assumes they actually have non-public trade secrets which is very unlikely. To address this objection, simply recuse yourself from bidding on the business. Once you recuse yourself you are in a position to capture competitive intel that may help you understand why you lose to a competitor in head to head competition. This is information you need to know if you wish to grow your market share. The lesson here is simple. RFP expertise is development through education and experience. To obtain that education and experience you must conduct and respond to RFPs.

There is an important reason for developing a procurement profit center…RFP activity is trending up. The reason we are seeing an increase in RFP activity is due to a hyperactive plaintiff bar that has secured court decisions or settlement agreements that impose an obligation to conduct an RFP. Furthermore, various recent articles written by ERISA counsel and the Department of Labor (“DOL”) encouraging RPF activity on a three to five-year time interval. That means there is a potential that as many as 20% of all plans are engaging in an RFP process every year.

RFP Growth

Keep in mind, RFP activity is not limited to recordkeeping and administrative services only. There is an increasing trend in advisor, cyber-security, investment products, fiduciary insurance, compensation surveys, HSAs, 3(16) services, 3(38) services, benefit concierge, committee surveys, non-qualified solutions, outsourced CIO, and even pandemic RFPs thanks to COVID-19. [1] This is not an all-inclusive list. Fortunately, the majority of TPA’s have experience in these areas to position themselves as a procurement solution while at the same time they are capturing market intelligence that can be reused for other engagements or research papers that are offered for a fee. As a side note, conducting advisor RFPs is a great way to identify new distribution relationships while getting paid for the research.

If data is king, the market intelligence derived from RFPs can be used to generate other sources of consulting revenue, position a TPA to remain relevant with their distribution channels, and offer a TPA a competitive market advantage. In fact, a TPA should think outside the box and identify other topics that their clients or advisor networks perceive as a value add they are willing to pay for. The question becomes how to efficiently acquire, maintain, and disperse this market intelligence. Of course, there is only one way to make your procurement department scalable…technology!

Advancing RFPs With Technology

It should come as no surprise that the predominant way of conducting RFPs, Request for Information (“RFI”), Due Diligence Questionnaires (“DDQ”), etc (hereinafter referred to as “RFx”) is through the usage of WORD, Excel, or PDF. These dinosaurs require painstaking labor to sort through prior RFx creations or responses to prepare or complete a new RFx. In addition, as the quarterback of any RFx project you undoubtedly have to obtain approval from other colleagues in marketing, sales, compliance, legal, company executives, and subject matter experts. Oh, the drudgery of working with multiple redlined versions of an RFx to produce a final report with little or no chance of winning. This is the history of past RFx experiences where the only guaranteed winner is the consultant that was retained to conduct the RFx but, again, this is the history. To be successful, the future must be different.

Creating a procurement profit center for consulting engagements requires the acquisition of technology that permits you to efficiently manage a content library of questions and corresponding answers. This will permit you to use the same software for both conducting a search as a requestor or participate in an RFx as a responder. It also necessitates the need for machine learning that enables the technology to automatically populate answers to question to save time and exercise version control. Furthermore, managing version control requires the use of standardized templates with built in workflows as a starting point that can be modified and customized. In addition, your technology solution should include team collaboration and real time chat allowing multiple team members to participate at the same time to complete, evaluate, or score responses or approve questions. Also, your technology must provide the analytics that help you monitor activity, the impact a question or answer has on the decisionmaking process, and close ratios associated with distribution channels. In short, you need a user-friendly Swiss Army Knife technology platform that you can quickly become proficient in and maximizes your efficiencies.

The Landscape, And Its Future

While not all solutions are equal, the primary RFP technology solutions for the retirement industry listed in alphabetical order include Catapult HQ, CFFM, InHub, Loopio, Qvidian, RFP360, rfpio, and SAP Ariba. These technology solutions vary significantly in sophistication, deliverables, and cost so it pays to do your homework before you adopt any solution referenced. [2] Bottom line: if you decide to professionalize your RFP approach and build a procurement profit center, you must keep the following four principles in mind to achieve success:

  1. Participate to win,
  2. Engage to build expertise,
  3. Engage to build market intelligence, and
  4. Leverage comprehensive and scalable technology.

RFPs are not going away. They are now a normal part of the fiduciary process in part promoted by judicial decisions and settlements. If you are not actively responding to RFPs, you have certainly limited your exposure to opportunities. In the same way, if you are not conducting RFPs you are losing the opportunity to increase consulting revenues as well as capture market intelligence that would permit you to expand your market share. In short, RFPs are in your future, it cannot be avoided.


  1. To access a free COVID-19 RFP created alongside Principal Financial Group and Google go to https://catapulthq.com to request access.
  2. For a breakdown of the different solutions please write to learn@plantools.com

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