The Lanyon European Conference in London this week offered a fascinating glimpse into the world of RFPs.
These are one of the mainstays of the industry â€“ but this, apparently, has not stopped corporates sending Requests For Proposals to hotels for countries where they have no properties or to airlines for routes they do not run.
Suppliers were not much better. One apparently left it until the last minute to reply to an RFP which resulted in long late hours cobbling it together and the subsequent resignation of a colleague citing stress. The eventual Request for proposal did not even make the shortlist.
It was not all as bad as this but there was enough to suggest buyers and suppliers need to get together to hammer out some basic ground rules, like knowing something about each other before sending or replying to RFPs.
Lanyon, which makes online tools to ease the whole Request for proposal process, must be delighted with itself for staging such a conference.
It was industry stalwart, Tony McGetrick, UK sales and marketing director for Expedia Corporate who drew attention to the basic factors for a successful Request for proposal.
Relationships between the buyer and the supplier are “absolutely essential”, he said, adding it was “extremely rare” that RFPs were successful if there was no prior relationship. But he urged that buyers and suppliers also looked closely at these relationship: What level were they on? Was it a senior one? Could these people influence the decision? Did the supplier work anywhere else in the buyer’s industry? And did that industry fit in with the supplier’s culture?
The supplier also had to decide whether this offered business was of strategic importance to them and whether it would grow their organisation?
But perhaps most crucially, there was the question of the keenness of the buyer actually to change agents.
Mr McGetrick said – and he was backed in this by Chris Reynolds, former travel manager for Siemens in the UK and now a consultant with 3SIXTY – that “only about 30% have any intention of changing agents.
“They are simply finding out what is in the market place and trying to get a better deal out of their incumbent agent.”
Mr Reynolds dismissed these RFPs as benchmarking exercises which TMCs could do far better.
Roger Evans, European sales manager of Avis, offered his own set of warnings to buyers submitting RFPs. “A lot of companies do not get their internal house in order. There is quite a high percentage of failure because internal stakeholders are not brought in before the Request for proposal process.”
Buyers should also consider when to send in their RFPs. “We get about 150 a year and if they come in in August or December, they are not going to get a quick response.”
Mr Evans also warned that because an Request for proposal was seeking a high level of business it was not necessarily attractive to the supplier. “These can be off putting. It is assumed that we will drop everything for them but these are the least desirable, the most difficult to service and bring in the lowest margins.”
Paul Tilstone, executive director of the UK and Ireland Institute of Travel Management (ITM), produced some good news: both buyers and suppliers though that the involvement of procurement had made the Request for proposal process more professional.
But, as ever there was a sting in the tail. Further research by ITM showed that while 72% of buyers thought suppliers told the truth, the figure sank to 34% when suppliers were asked if they thought buyers told the truth. Sadly, 59% said they did not think they did.