Top RFP Tips for Experienced Travel Buyers
Ask any travel buyer about RFPs and they’ll probably shudder and change the subject. For many, the tendering of travel management contracts, or the Request for Proposal (RFP) process, is time-consuming, cumbersome and usually unsatisfactory.
Two-hundred-page documents ask a myriad of questions from average length of employee service to environmental credentials. Buyers spent weeks constructing them, TMCs spend weeks responding and them as do the same buyers, analyzing, shortlisting and scoring before finally selecting a winner.
It’s like negotiating an international peace treaty, and equally stressful for both sides. So, if there’s got to be an RFP, there must be ways to sooth the pain. And there are.
Too often the RFP process is a cut & paste exercise using association templates intended to create a ‘one-size-fits-all’ approach. Trouble is, real life isn’t like that. Essentially, those long questionnaires make it harder for TMCs to demonstrate what makes them stand out.
Issuing the RFP should not be the first interaction you have with prospective suppliers. By doing your homework, and getting prospective suppliers involved in the process earlier you can cut down what they must write – and you must read.
Capability, Culture and Commercials
The Association of Corporates Travel Executives’ (ACTE) 3Cs campaign champions the balancing of Capability, Culture and Commercials as the way to choose the right TMC. We’re going to assume for now that you’re already and RFP veteran and you understand the services a TMC provides.
You’ve explained your company’s mission and how travel and expense management impact it. You’ve clearly defined what is happening in your travel program and how the organization is doing compared to key benchmarks.
Context is everything. In any successful RFP the buyer understands what is needed and tools to meet those needs. Inviting 20 TMCs to pitch is fine in theory, but they need to be pre-qualified to avoid engaging agencies that can’t offer them, have the required scale or expertise.
Define the goals of your RFP and make sure those goals provide enough reason for inviting bids. Ask your travelers to define what they’d like to see improved in the program and how those changes might impact the organization. Find out if multiple stakeholder groups are encountering the same problems.
If there’s nothing wrong – why go out to bid? By taking a close look at your relationship with the incumbent TMC, you may find that an RFP is not the answer, that any problems can be fixed, and the relationship continued.
If you – or the organization – still decides that an RFP is necessary, the process can start. Begin conversations early by sitting down with pitching TMCs to discuss what your goals, whether your voice be heard, who their other clients are and whether you will be competing with them for resources.
A lot of buyers overlook culture in favour of price instead of trying to find the right partner, so workshop sessions will help reveal which companies’ values match your own. As much as you need to understand the provider, they need to understand you, your business and its market – especially if they do not already have a relationship with you.
More savings, better service, improved productivity and control are the usual goals from an RFP, although the importance attached to each will vary. Weight your goals, bearing in mind any on-going budget reduction programs; how program performance is benchmarked; the impact of specific service issues on costs, how you are using data and how unmanaged spend is controlled. When that is done, make sure everyone understands your selection criteria.
Plenty of RFPs do not allow enough time or allocate enough resources to secure optimum responses. Some do not allow time for the essential Q&A session with pitching TMCs or for their responses to be evaluated properly. Giving a tight deadline for responses and then extending that deadline doesn’t create the impression of an organization TMCs want to work with, whilst impractical deadlines may stop you getting a full or clear picture of how your business would be handled.
If you can’t dedicate the appropriate time or resource, consider outsourcing the RFP’s creation, meetings, research and review processes to an outside consultant.
Above all, make sure the RFP won’t bankrupt your suppliers. If your TMC can’t make some money from managing your account, they’re not going to be able to invest in their people or systems, so they won’t be the right TMC for you for very long. Two-hundred-page questionnaires are hardly the way to start what will hopefully be a wonderful relationship.
That’s why, when all is said and done, RFPs should be the end of the sales process, not the beginning.