Shining a spotlight on the moments when customer value is created in a live RFQ event.
Todays post is from Dave Wenig, Sr. Vice President of Sales and Services at SafeSourcing Inc.
In this post, which will be the first of several, we’re going to take a close look at the online Request for Quote (RFQ) from a different perspective. Rather than focus on measuring the value delivered as savings, let’s examine when that value is created and consider the vendor behaviors that went into that moment. If you need a primer on what an RFQ is, click here.
I honestly don’t know how many of these I’ve watched live over the years, but I suspect the number is in the thousands. Having done that, I’ve picked up on some trends. More recently, SafeSourcing introduced our Graphical View which has brought some of the trends I’ve noticed into focus visually.
Let’s start at the beginning of an RFQ. For years, I have said that many vendors will sit on the sidelines and wait a while before entering their bids. Many other vendors will begin with a higher price to start with. Others choose to start with a very low starting price and try to put their best foot forward. I respect all bidding strategies and it’s important that each vendor has a plan in place when they start. It’s all part of the RFQ process. In the image below, you’ll see a recent RFQ for receipt paper event that illustrates this starting point and the various strategies that the vendors are using in the first 5 or so minutes of an RFQ.
In this example, we can clearly see each of these vendor strategies beginning to play out. Each of the participating vendors were trained by SafeSourcing and knew in advance that this RFQ was scheduled to last 20 minutes plus extensions. As a result, most of them went with a strategy that allowded them to start with somewhat higher price than where they intended to begin. The vendor in green decided to enter in very aggressively low pricing from the start which set them apart. More on that later.
Consider these strategies and what you might take away from watching this unfold. As SafeSourcing’s customer, you would eventually wind up doing business with at least one of these vendors. How would it be helpful to know how they went about arriving at their final price? Does the vendor’s pricing strategy and behavior impact the way you will continue to work with them beyond the RFQ?
In the next installment, we’ll take a close look at the middle of the RFQ and then we’ll move on to the end of the RFQ and see how it all played out.
For more information, please contact SafeSourcing.