The underlying message of this month’s cover story is that the key to negotiating an effective fleet services agreement starts with an effective request for proposal (RFP). Such an RFP establishes the foundation for negotiating the details of a fleet service agreement and establishing the appropriate benchmarks to measure the supplier’s performance. This foundation will help to increase the likelihood of a successful and long-lasting partnership with a fleet service provider. With this said, what are the secrets to preparing an effective RFP?
First of all, for an RFP to be effective, you need to openly share will all prospective bidders what your current fleet program provides, what your ultimate goals are – such as reducing cost or improving service – and letting vendors provide a future vision of how your fleet might operate with them managing it. In this context, an RFP should provide as much background information as possible on your fleet and your business. Although there are exceptions, this unfortunately is not the norm for most fleet RFPs.
Instead, many RFPs are poorly prepared. Typically, these RFPs will ask too many detailed questions, with some of the worst offenders asking as many as 200 questions. Often the fleet manager who prepared this RFP doesn’t have the time to read the several hundred pages it takes to answer these questions. If five bidders replied to the RFP, this would require reading over a thousand pages of text.
“One way to minimize information overload is by limiting the length of response to each question, such as specifying a limit of no more than 500 words for each response,” said Christopher Batio, proposal manager for GE Fleet Services.
Eliminate the Boiler Plate Responses
Many companies ask for a full explanation of a fleet management company’s processes in an RFP; however, they only succeed in burying themselves with information that is often unnecessary to making a decision. “Ask ‘solution’ questions rather than ‘do you do this’ questions. Ask questions that get to the core value the service provides, not just a description of its features. What’s important is what the service is going to do for you, not a step-by-step description of how it works,” said Debbye Giles, marketing communications manager for PHH Arval.
Open-ended questions will yield greater insights into a supplier’s customer service philosophy and corporate culture. In your RFP, always ask for a value proposition, said Giles. Rather than asking a questions such as, ‘Describe your maintenance program,’ instead ask, ‘What differentiates your maintenance program?’ or ‘What value does your maintenance program deliver?’
Although references are important, it isn’t likely that a fleet supplier will provide the names of problem accounts when you request them in an RFP. This is when membership in an organization such as the National Association of Fleet Administrators (NAFA) is invaluable. By networking with your peers, you can learn who is using which fleet service provider and get honest assessments on their performance.
Make it Easy to Respond to Your RFP
When preparing an RFP, think about what you need and want and ask for it in a concise format. “If you don’t provide clear instructions regarding format, or if your questions are too broad and can be answered in varying ways, then the subsequent evaluation will be extraordinarily complex and hard to interpret,” said Sandra Wilson, sales administration supervisor for LeasePlan USA.
Another suggestion is to eliminate potentially redundant questions. “When a committee prepares an RFP, quite often there are many identical questions, but they are simply worded differently,” said Batio. “A quick review to see how many questions may be consolidated prior to issuing the RFP will save you considerable time when evaluating the completed proposals.”
Increasingly, companies want completed RFPs to be e-mailed to them. “If you are going to request this in your RFP, be sure to first check with your IT department to make sure a huge file can get through your company’s firewall,” said John Coyle, director, special markets for ARI. One disadvantage to e-mailing RFPs is that attachments, such as hard copies of sample reports, can’t be included in an e-mail, which necessitates a paper version to be overnighted. If these types of hard copy reports are required, it defeats the perceived advantage of e-mailing an RFP.
An RFP is a useful tool in selecting the best vendor for your company, but you need to ensure it is properly prepared. In many cases, the success of a fleet program is inescapably tied to the performance of a fleet service provider. Recognizing this, it is critical to lay the proper foundation for this partnership, which starts with an effective RFP.
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Originally posted on Automotive Fleet