Clarity Is Your Friend: Tips For Both Sides Of The Digital Signage RFP
September 4, 2012 by Dave Haynes
Through Preset, I have found myself involved in a PILE of RFPs in the past couple of years, helping end-users pick out the platform that best suits their needs.
There are lots of variables and also lots of reasons for choices that have nothing to do with price, but price is always going to be a big contributor. One of the tasks that invariably falls in my lap is decoding the service offers of all the competing software platform vendors, and trying to get to some apples to apples comparisons.
It ain’t easy.
When the responses come in, clients tend to start asking me to help make some sense of it all. They are growing cross-eyed wading through multiple responses, maybe 10 or more on a project, and they are thoroughly confused by how all those responding companies present their range of services and pricing.
I see problems on both sides.
If I didn’t write the RFP, the questions around pricing often lead to fuzzy or widely varied responses. If all you ask is how much, you’re going to get a mixed bag of answers.
On the vendor side, the problem tends to be how things are packaged and priced. Based on seeing stuff from maybe 20 different companies in the last two or three months, I can tell you just about everyone peddles their pots and pans a little differently. Or in some bases, the difference is substantial.
I don’t see standards getting developed by one of the industry associations because there are too many vested interests and too much history and material already baked in as to how companies package and sell their goods and services. But here’s what I suggest would help.
1 – Before you put the RFP out, sort out what you want and how you want it. For example, before the RFP goes out, decide whether you want to buy (self-hosted) or rent (software as a service) the platform.
2 – If you are buying it, are your IT people going to install and manage it on your company’s servers and network, or do you want the vendor to do that?
3 – If you are renting, state what your expectations are on the length of term, and clearly say how you want the price reflected, ie monthly per unit or total three year cost per unit, or whatever.
4 – Vendors crave recurring managed services fees, and the pitches for those services invariably creep into the responses. So if you want the vendors to provide things like content management or proactive network monitoring, lay out the bullet points on the scope of work and how you want that priced. If you don’t, you’ll be looking at 10 different variations on Managed Service options and 10 different prices.
In short, figure out what you want before you ask, how much of it, and how you want to see pricing. One of the things I try to get into the initial document, if I get involved that early, is a mini-spreadsheet that sorts out:
a – start-up costs for the overall network, like set-up and training
b – recurring and/or annual costs for whoever is centrally managing the network
c – recurring and/or annual costs at each site (with the number of PCs with software per site clearly stated in the ask)
d – recurring services required, including the scope, expressed as a monthly fee per PC/device
That never resolves it all in one go, but it’s a good start. You are trying to establish, let’s say in retail, how much head office is looking in capital or operating costs and how much each store costs, per device and rolled up per site.
That clarity is incredibly helpful in making comparisons, but it will also lead to better responses. I can’t even count the number of times I have heard from vendors who ignored or gave only obligatory responses to RFPs because they came across as muddled messes. What vendors tend to conclude is that if a Buyer can’t say what it wants, that buyer is never going to actually buy.
1 – If you sell software with perpetual licenses, clearly state all the components needed to run the network as (hopefully) described by the buyer in the RFP. Clearly say when things like annual support fees kick in, because sometimes it’s after a year, and sometimes it’s right away.
1 – If you sell SaaS, provide a clear, concise number for what you charge per month per PC installed with a license of that software. The SaaS fee almost always includes support and upgrades, but I’d do a “This includes …” thing if allowed, just for clarity.
3 – If you insist on lumping in bundled services, like content management, in the SaaS fee, be aware that others don’t and you therefore tend to look more expensive. You are better off breaking it out, even if you have to add “Mandatory” in there to make clear a company can’t buy SaaS without also buying this. It’s about letting buyers try to figure out what is what.
4 – Be transparent about additional fees, but don’t sweat the details. Some SaaS companies have things like overage fees for storage and data transfer. You don’t want to hide those fees, but unless clients commonly exceed them, it’s probably enough to say they exist in the rare circumstance that customers exceed usage thresholds. You don’t need to say it’s $0.20 per GB blah blah if it rarely happens. That can be in the contract.
5 – Be clear about your services and scope. You and your team may know what Content Management means, but don’t assume the Buyer or anyone else does. The Buyer may read content and think, “Oh good, they do the creative and provide date feeds!” For each managed service, break out a bullet list of the key things done and how much, and also how that is charged (ie per site, per PC or whatever).
Some RFPs – particularly when they get spat out by things like procurement systems – are pretty inflexible in how you can respond. When that’s the case, do a cover letter or provide an overview as an attachment that will help explain things in a way buyers will get.
For example, as someone who has to decode these things, I would love to read:
Based on the description of this project and its scope, we believe you would need the following –
Two Master content management platform licenses, which each cost $XXX. You need one license for this and this is whay you need the other one.
800 Playback software licenses, which costs $XXX per unit. Because each site has four distinct content channels, you will need four distinct playback devices, each of them licensed. Your initial plan indicated 200 venues, so we multiplied that by four licenses per site to get to the 800.
To set up the network costs $XXX one-time and any new clients need training, and that is $XXX if we do it this way or $XXX if we do it this way.
I have had back-channel chats with sales guys who have as much confessed their pricing is a little convoluted, and I’ve yet to meet a rational human who enjoys things that are convoluted.
So my suggestion is simple: clarity is your friend.