What founders and sales executives must know about the hidden risks and rewards of B2B SaaS RFPs.

At Yonder, a B2B SaaS company, most of our enterprise customers award contracts only through RFPs. We have an ambivalent relationship with procurement departments, as RFPs are super-tedious to answer. Hundreds, sometimes even over a thousand requirements. Quite often, those requirements contain duplicates, as they were gathered by different departments. Sometimes, requirements are not clearly formulated, and you can’t clarify them due to the strict communication rules during an RFP.

But instead of getting stuck with the tedious side of an RFP, let’s look at the bright… and yes, at the dark sides of an RFP.

The Bright Side

In general, an RFP is a good thing: The customer tells the bidders what they need. Then, the bidders tell the customer how they would fulfill the requirements, and how much this will cost. Last but not least, the customer decides on the best offer and awards the contract.

As simple as that.

Once the RFP is awarded, the implementation starts. In the case of Yonder, the implementation is always about digital transformation: Together with the customer, we transform the customer’s legacy documentation landscape into a fully digital knowledge management solution. Digital transformation always means cultural change, which is why issues or conflicts might occur during the implementation phase.

If you run into issues or conflicts without having a clear definition of the customer’s requirements, then good luck. If you went through a well-structured RFP and diligently answered all the requirements, you can always fall back on your RFP response in case of issues or conflicts.

So much for the bright side of an RFP.

The Dark Side

The switch from bright to dark often isn’t digital but occurs via multiple shades of grey. So let’s look into darker and darker aspects of an RFP using real examples from Yonder. However, we won’t disclose the customer names. If you want to protect yourself from those organizations, you can send me a DM on LinkedIn.

Case 1: Light Grey

In the lightest shade of grey, you run into issues or conflicts during the implementation phase. That’s normal. But now you find out that some of the requirements contradict each other. Lengthy discussions between the customer and your organization will follow, as each party insists they understood the requirement differently. This leads to project delays, frustration on both sides, and delayed payment as the project doesn’t get accepted.

Case 2: Solid Gray

In the next darker shade of grey, you don’t even get to the implementation phase: The laws of the World Trade Organization (WTO) allow RFP awards to be contested. In this case, the second-placed bidder contests the award, gets to see your full bid, engages a lawyer, and tries to find a formal error during the RFP process to win over the bid. Of course, you can only contest an RFP award if you engage a lawyer. Or if you are a lawyer yourself.

Sportsmen are taught early on in their careers to be good losers. That doesn’t seem to be taught in law school. How I love lawyers.

Case 3: Pitch Black

We’re not in the darkest spot of the ocean yet. The creepiest thing I have seen in 50+ RFPs in my career as an entrepreneur was a customer falsifying our RFP answers. They falsified our RFP answers after going live, as they requested a feature we transparently said was not available during the RFP. They falsified our RFP answers using Microsoft Word and Excel, even though we had to submit our RFP answer to Ariba, their official bid platform.

How low can you go? It speaks volumes for both the person who did that and the organizational culture of that customer.

You Don’t Hear Dogs That Don’t Bark

Don’t get me wrong, most of our customers are great to work with. But as always, there are outliers and exceptions. From the three negative RFP examples above, the first two are within the boundaries of laws and international trade rules. So we have to live with such RFP outcomes, that’s part of the game.

Only the third example is clearly unacceptable and would probably withstand an appeal in court. But as I am not a lawyer, I chose to leave that horrible customer to our competition and move on.