Cindy Lo: Events Companies Should Charge for RFPs

RFP
The events industry is always changing and advancing in response to the near-daily emergence of trends, fads and growing expectations. For an industry that is so fluid, why then have companies not adjusted to correct a massive blind spot in standard procedure that affects profitability, efficiency, and protection? Our industry is one of the only service-related industries not charging for Request for Proposal responses. When you have built a portfolio of work, and have earned a good reputation within your industry, you should be able to confidently charge for a creative RFP response. This paid model has worked in other industries, and by looking at the issue from the following perspectives, you can understand why this is a change we need to make as an industry to accurately honor our value.

The Market Rewards Value 

In service-based industries, consumers have the power to endorse a company’s value simply by choosing where their dollar goes. As an example, there is a popular U.S. coffee chain you probably went to this morning that charges nearly $6 for a large cup of coffee. Without any context, this sounds like a pretty bad business model—but this company has managed to maintain a loyal set of followers and has become one of the most recognizable franchises across the globe. How did it do this? Consumers are willing to spend a premium when they have a high perceived value of the product or service they are purchasing. If this coffee company offered nothing in terms of consistency, quality or comfort—large contributors to their perceived value—their price would be deemed absurd and the company would fail. We have to trust our worth as an industry, and our ability to compete as an individual agency; that even by charging for our RFP responses, our value qualifies the price, and our clients will respect us for it. We are scared that if we charge, we will lose business. But just like that cup of coffee, if we showcase our value, consistency and creativity, clients will trust us with their dollar.

Our Time, Our Money, Our Resources

Giving away products and services for free is hardly ever a good business model. By not charging for our creative RFP proposals, we are giving away both our intellectual property and our already-stretched-too-thin time. We devote countless hours to brainstorming ideas, calculating custom budgets and building effective collateral for proposals that offer us no compensation, and no security that the client will not take our ideas elsewhere. Internally, our sales team on average spends 30 percent of their work hours on the proposal process alone. Many of these hours could have been avoided with a simple fee that vets out clients who may just be looking to gain ideas to use for their benefit (which is very unethical if you are wondering where we stand on this). I understand that there are situations where you may offer a proposal for free, however, this should not be the norm for in-depth creative proposals. We must value our time and protect our ideas.

The Bottom Line

Like any other business owners, we as event professionals have to focus on the bottom line. We must understand that sacrificing our billable hours to work on one proposal is not an effective use of our time for a client who may be sending the same RFP to 10 other companies only looking for the lowest price. However, we also need to be cognizant of the fact that our clients are looking out for their bottom line as well, and may need to better understand why the charge is necessary. In this instance, we should be happy to educate: We are in the service business, and services include spending time, becoming personally invested and constantly brainstorming creative ideas. When a client is willing to pay for an RFP, it send a message that they are serious about utilizing a creative events agency for their program and are not just fishing for ideas to take direct. Even if, further down the road, they decide not to use an agency, organizations like ours (Red Velvet Events) will have at least been compensated for our time and ideas.

From Here On 

Charging for RFPs is a massive undertaking, especially when considering that we all must change together. We as creative events agencies must understand that our industry has grown exponentially over the past few decades and we need to grow with it. As an industry, we need to protect our ideas and our time by creating a new norm for paid creative RFP responses, otherwise we are valuing ourselves as a transactional commodity versus the valuable and specialized service provider we are. ________________________________________________________________ [inlinead align="left"][/inlinead]Author bio: Cindy Y. Lo, DMCP, is founder of Red Velvet Events Inc., a full-service creative events agency, and has earned multiple international event management/planning awards. Lo is a recent author of “Behind the Red Velvet Curtain,” which is available on Amazon and BookPeople in Austin, Texas. Connect with RVE on all the major social media channels (@redvelvetevents). She lives in Austin with her husband and their two children.