To Whom It May Concern
If you’re selling software to financial institutions, you know the road is fraught with complexities. This post dives into the often-overlooked aspect of RFX processes, which are formal procedures like Request for Information (RFI) and Request for Proposal (RFP) that financial institutions use to evaluate vendors. Mastering them can be a game-changer for your sales strategy.
Audience: B2B Sales Professionals, FinTech Startups, and Consultants in Financial Services.**
—
Introduction
I’ve always been a big fan of Andreessen Horowitz (a16z), a private venture capital firm that has been a game-changer in the tech industry. Their insights into various facets of technology and business are enlightening. One article that recently caught my attention offers a deep dive into the challenges and opportunities of selling software to financial institutions. It’s a comprehensive guide that covers the nuances of B2FI sales, but it left me pondering one critical element often overlooked: the RFX processes. In Europe, especially in the D-A-CH region, nearly 95% of banks require these processes, making them a non-negotiable aspect of sales strategy. Check it out here.
A Nod to MEDDICC mentioned by a16z
The a16z article references the MEDDICC framework, highlighting its effectiveness in B2FI sales. MEDDICC stands for Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, and Champion. It’s a comprehensive framework that guides sales teams through the qualification and management of opportunities. By focusing on these critical elements, MEDDICC helps to bring structure and predictability to the sales process, making it easier to identify which deals are worth pursuing and how to close them.
However, while MEDDICC is strong in many areas, it doesn’t fully address the ins and outs of RFX processes. This gap can extend the time to close a deal or even derail it altogether.
The Importance of RFX in B2FI
When it comes to RFX processes, these aren’t just formalities. They are key steps that financial services institutions use to evaluate who they want to do business with. The more complex your solution, the more detailed and intricate these RFX processes will be. You’ll usually find a combination of in-house experts and external consultants managing these processes. The business units within the bank often handle the functional requirements, while the procurement department takes care of the financial aspects. And if you’re targeting state-owned banks, be prepared for an added layer of complexity due to specific legal requirements.
The Role of Consultants
Consultants play a significant role in RFX processes. Whether in-house experts or external advisors, their influence can’t be underestimated. They often serve as gatekeepers, filtering out vendors that don’t meet the bank’s criteria. Building a good rapport with these consultants can be a game-changer. They can either be your best allies or your biggest roadblocks.
Best Practices for Navigating RFX Processes
While the MEDDICC framework provides an excellent foundation for managing complex sales opportunities, it’s not the end-all-be-all. There are additional layers of strategy and execution that come into play, especially when dealing with intricate RFX processes. To complement the MEDDICC approach, here are some best practices that have served me well:
Early Engagement: The earlier you get involved in the RFX process, the better. This gives you the opportunity to influence the criteria and establish a strong relationship with key stakeholders. Ideally, you should work with your target customer to define parts of the RFX and the required specifications. Being “late to the table” can be detrimental, especially if your competitors are steering the tender process. This is a critical issue that could be the subject of its own article.
Know Your Audience: Understand who the decision-makers are and what they care about. Tailor your responses in the RFI or RFP to speak directly to their needs and concerns. Also, try to grasp what the Decision Criteria are in the MEDDICC framework for your target customer, as this is often where the race is won or lost.
Be Transparent: Honesty goes a long way in building trust. Be upfront about what your solution can and cannot do. In RFX processes, you’re documenting specific requirements that could potentially be used against you legally. Instruct your team to be precise in their wording. An early exit from an RFX process could save you months of wasted effort.
Leverage Technology: Use CRM systems and other tech tools to keep track of deadlines, follow-ups, and documentation. This ensures that nothing falls through the cracks. If you notice that the consultants involved don’t have adequate tools, consider offering solutions like private landing pages that compile all necessary documents. Deal room tools or even a simple shared workspace can set you apart from competitors still relying on emails in 2023. The same goes for communication; ask upfront about the rules for communication technology. Messaging can be more efficient than email, but be mindful of data security and documentation.
Consult the Consultants: As mentioned earlier, consultants play a crucial role in these processes. If you find yourself in an RFX process and you don’t know the consultant, you’re already late to the game. Therefore, try to establish a connection with key consultants ahead of time. It doesn’t have to be a deep partnership; many consultants appreciate an independent presentation of your solution, separate from any specific deal.
Legal Prep: Especially when dealing with Financial Services Institutions, make sure you’re well-versed in the specific legal requirements that may apply. For example, if your solution runs exclusively on a cloud platform that doesn’t meet the bank’s requirements, it’s not worth entering the ring. A good legal consultant on your side should be technically proficient or work well in conjunction with you and your entire solution team. Also, avoid insisting solely on your legal framework, as many BFSI companies are not open to this.
Use Closing Plans: Even if tenders often have fixed timelines, utilize closing plans to manage your schedule effectively. I’ve frequently seen that once a provider is selected, delays can occur due to lack of coordination, or deals get postponed. Keep in mind that consultants are usually paid on a time-and-material basis, so it’s crucial to understand everyone’s intentions.
The Real Deal
In the complex world of B2FI sales, it’s essential not just to rely on established frameworks like MEDDICC but also to understand the specific challenges in the industry. Legal preparation and effective closing plans can make or break your deal. In RFX processes, you’ll often find yourself questioning not only whether you can win the deal but also whether you even want to. Should you and your team decide to enter the competition and encounter a roadblock or require a sparring partner, feel free to reach out.
**Navigating an RFX process is like assembling IKEA furniture. You think you’ve got all the pieces and instructions, but there’s always that one missing screw that throws everything off. Much like how an IKEA manual doesn’t cover every possible hiccup, MEDDICC doesn’t cover all the intricacies of RFX processes. So, keep your toolkit handy and don’t hesitate to call for help when you’re stuck with an ‘IKEA situation’ in your RFX journey!**
—
If you’ve found this article helpful or have further questions, don’t hesitate to reach out. We’re always here to help you navigate the complex world of B2FI sales.
My name is Dirk an I know finance. Follow me at knowing.finance