RFPs That Get Results
My staff and I put 896 direct mail projects out for bid last year. Yes, that's a lot. Despite the quantity, we didn't have any significant discrepancies between what we thought was covered in the RFP document and what the mail manufacturer quoted and ultimately produced. I think that's pretty darn good. On top of that, we didn't have any noteworthy discrepancies about what we were charged. So, no "oops, we forgot" surprises were passed on to our clients. Clients love that, and so do we.
I've been doing this long enough (my staff thinks I carved my first direct mail piece on a stone tablet) to know where many of the land mines await those who don't properly think through the RFP process. I'm assuming that if you are reading this article you want to improve your RFP process. Good for you. An accurately presented RFP has many benefits, including getting an accurate and competitive price. Plus, it sets the stage for a successful project with youand not the mail manufacturerin control. Here are some of the critically important concerns to resolve before you send out your RFP.
Tip 1: Get Clarity; Be Clear
Producing a successful RFP is a team effort. First, the account team must set clear goals. If the goal is to produce a 50 cent package and the design team comes up with a three-way blind match, closed-face package that costs $1 per piece, you have a problem. I say "you" because you're going to bid the project over and over and over again. Plus, the designer will have to make constant design changes, which is a waste of time and unbelievably frustrating.
So, start with clarity. Is there a price goal? Is good quality or a low price the primary requirement? To avoid RFP chaos, it's your responsibility to make sure everyone is on the same page at the beginning of the process.
Here are the five things you should define when sending out an RFP:
1. Package specifications: Is there anything special about this job? Are you clear on how many versions, drops and elements are included in each package? You can't be too clear in an RFP. We always include:
* Paper weight, finish and brightness by element;
* Printing specifications by element (e.g., number of colors, bleeds, finished sizes, folds, and number and type of proofs required);
* Number of litho and personalization versions per element; and
* Detailed lettershop instructions that itemize the frequency of drops, quantity per drop, number of inserts per version, franking method and sort.
Make sure you give the estimator all of the information he or she needs to accurately and successfully bid your project. For example, when we request a complicated fold or design, we create a drawing so that the estimator can visualize what we want.
2. Schedule: How fast do you want to be in the mail? If you require a faster-than-usual turnaround, the mail manufacturer needs to know that ahead of time so any overtime charges can be factored into the price.
3. Price: Are you asking for an open-ended quote, or do you need to hit a specific price point? If you have a specific price point, tell the mail manufacturer beforehand to avoid multiple rounds of bidsand a lot of mutual frustration.
4. Budget: What do you expect to be included in your quote? For me, quoted prices must include all goods and services in the cost-per-thousand. I don't allow any "below the line" pricing added to the quote. That way I accurately can compare all the bids I receive.
5. Quality: If you have a quality standard to meet, you should define it in the RFP. This will allow the mail manufacturers to select the most appropriate equipment on which to run your job.
Tip 2: Overbid the Job
Huh? What would you rather present to your client or your boss: a change order for an increase in cost or the good news that you came in under budget? Or, how would you like to accommodate an additional version or color without having to raise the cost? The simple solution is to slightly overbid the project.
I have a general rule: If the account director says she wants four versions, I bid five. If the designer wants process plus one spot color, I bid process plus two spot colors. Overbidding the job gives me a little budgetary wiggle room that makes it painless to accommodate minor changes or slight deviations.
Tip 3: Bid All Options Up Front
It's far easier and takes less time for the mail manufacturer to estimate package options up front rather than to bid options one at a time, over and over again. Not sure what the cost impact would be for the brochure to be printed on 70-lb enamel versus 80-lb? Request the option. Not sure what the laser and lettershop split charges would be to print two versions of the letter and lift note? Request the option.
Tip 4: Request Costs for Different Quantities
If you have the cost for three different quantities, you can solve for the cost at any quantity using simple algebra. Not an algebra whiz? That's okay. You might be off a dollar or two per thousand, but you will be really close. You can use the information when the account directors ask you, "How much will it cost to print 20,000 more packages? Or 15,000 less?" If your target quantity was 100,000 and you had requested bids for 50M, 100M and 150M, you could guesstimate the effect of the quantity change without having to wait for the vendor to get back to you.
Tip 5: Consult With Your Mail Vendors
In direct mail, there are many issues to consider besides getting a project printed the way you want. Does your idea or format conform to "postal" regulations? Can it be personalized as designed? Is it "machinable" in the lettershop (or does the inserting or matching have to be done by hand)? If you or your designer are uncertain about how to spec a piece so that it can be efficiently produced, then start by presenting your rough layout ideas to your mail manufacturer so that it can help you to be successful.
Tip 6: Be Clear About What You Expect
On every bid request I send out, I make it clear what I expect to be covered by that bid. That way, there are no surprises when the invoices arrive. Here's what I note on every bid:
* "Vendor to provide per-element CPMs with a total cost-per-quantity." I ask for a budget by element so that if I need to delete an element to reduce cost, it's easy to determine the impact without having to ask the vendor for a revised budget.
* "Allowable overages are 1 percent for jobs that are greater than 30,000 pieces and 2 percent for jobs that are less than 30,000 pieces." I do not allow vendors to bill me for more overages than I allow. That way, I'm in control of cost. Standard overages vary by vendor. I had one come in with an aggressively low estimate only to attempt to bill me for 10 percent overagesan obvious profit recoup strategy. Since my estimate request document stated the allowable overages I would pay, I won the argument and didn't have to pay for the other 9 percent.
* "Include all fees in the cost-per-thousand, including laser and/or litho splits and overs required to meet mail quantities and sample requirements." I require that split charges be factored into the cost-per-thousand. That way, I am not hit with an unexpected charge. Further, I outline in my bid document how many samples and seeds are expected. They are to be factored into the cost-per-thousand as well.
* "Underages are not acceptable; it is the vendor's responsibility to produce 100 percent of the requested mail quantity and samplesno exceptions." If the vendor uses too much material to set up their job, it's not my problemit's theirs. I do not allow any "mailed short" invoicing.
I hope these tips help you create a successful RFP. If you have any questions, drop me a note at my e-mail address below. Good luck!
Gayl Curtiss is the general manager of The Hacker Group, a subsidiary of FCB Worldwide LLC, located in Bellevue, Wash., a suburb of Seattle. She is a frequent speaker at the DMA Annual Conference and regional direct marketing associations. She can be reached via e-mail at firstname.lastname@example.org.