A Mini-Guide to Fulfillment RFP Success

A consolidating market has implications on negotiating, account attention, and possibly more consolidation. Yet the fundamentals of a comprehensive and effective RFP process still stand. Be ready for pre-planning, data analysis and frequent vendor meetings.

By Chandra Johnson-Greene
Wednesday, November 5, 2008

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For fulfillment managers currently putting together an RFP, your job may have just become easier or more complicated, depending on how you look at it. The market has been under a wave of consolidation, meaning you at least won’t have to create as many RFPs, but your choices and negotiating leverage could be diminished.

Consolidations aside, writing a fulfillment RFP is an extensive process that can change and evolve each time it’s done. It involves a lot of pre-planning, data analyzing and endless meetings with potential vendors.

Define Your Objectives

The very first step may be the simplest—determine why you want to change your fulfillment provider. Are your current vendor’s prices too out of line with your budget? Are you not getting the personal attention that you need? Does the vendor not have the technology that you want for your evolving multimedia portfolio? The reason behind the need for change can determine your next move.

“We work through our strategic sourcing department to identify the objective and scope of the RFP,” says Jean Huckstadt, consumer marketing fulfillment director at Meredith. “In combination, we define the objective and scope of the project. Based upon that outcome, we define the appropriate internal team members to participate. If the objective is to find the best pricing, we work thru a Request for Quote document. If the objective is to source new functionality, we find that some basic requirements and phone or face-to-face conversations with vendors work best.”

Set a Timetable

Completing an RFP takes a lot of work, a great amount of communication between various parties and loads of patience. The best way to keep on top of it all is to set up a timetable.

“A timetable was established for sending the RFP to vendors, providing a Q&A session between our team and the vendors, team review of responses, another Q&A session, and then team evaluation and recommendation,” says Huckstadt, who did an extensive RFP four years ago. “This process was across three months and included all business units that required some type of fulfillment support.”

Calculate Your Requirements

Breaking down what you actually need a potential vendor to do for you as far as distribution and processing needs may be the step that takes the most time, but it is also the most important.

“Start with the basics,” says Steven Jacobs, fulfillment manager, American Media. “Such as label counts,  what your renewals needs are, whether you’re using premiums—and if you are—whether they’re editorial or hard premiums. You really have to look at your business model and send your RFP out to a vendor who can meet your needs because not every fulfillment company can.”
Jacobs adds that with the expanded use of the Internet, fulfillment managers also need to be concerned with how the fulfillment companies will interact with Web sites for order processing and customer service.

“Is it real-time, where the order goes direct onto the system and basic CS inquiries are answered immediately online, or do they require human intervention?” he says. “Also, many publishers now use renewal and invoice e-mail blasts, so you need to know how your fulfillment company maintains the subscriber e-mail address, at what cost, and how they do the e-mail blast. Tracking the data related to this online activity in detail is also important so you can better plan your promotions.”

Analyze the Cost

Once the candidates have received your RFP, it’s time for them to show what it will cost. Jacobs says he uses an invoice from his current vendor to test his potential vendors. “I like to strip down a current invoice by deleting the actual prices, and then I send it out to them to put their own prices in for those functions,” he says. “It’s a good way of looking at apples to apples.”

Jacobs adds that if he notices any pricing that looks too good to be true, it usually is. He also urges the potential vendor to include any future price increases that may occur in the final contract.


Meet With Your Potential Vendors

Face-to-face meetings with potential vendors make all the difference when mulling the final decision. It allows you to work out details, ask questions, scope out the letter shop and gauge the competency of the account reps.

“The ‘devil is in the detail’ is evidenced in the Q&A session and follow-up visits with the vendors to clarify questions and responses,” Huckstadt says. “The time best spent is the time spent reaching a common operational definition and understanding. As you know, publishing and, in particular, fulfillment terms can have multiple definitions based upon the process and based upon that vendor.”

Explore Your Options

When analyzing the data, what should you look out for? “It will probably take you about two to four weeks to properly analyze the data you’ve received before you take it to management,” Jacobs says. “Once you’ve done that, you can take a look at pricing and see how much it’s going cost you to stay with your current vendor versus choosing a new one. If you decide to make the leap, keep in mind that you’ll be losing historical data and that you’ll have to move bank accounts.”

Jacob adds that depending on the size of your company, you should be very concerned with how the team at your new vendor will be set up to fit your needs. In other words, will you be sharing your rep with other companies? “That’s obviously a big part of the equation—what resources will the new vendor be devoting to you?” he says.

It’s also important to remember that no matter how much work goes into the RFP process, upper management ultimately makes the final decision. “You can only make your best recommendation,” Jacob says. “Your managers may be happy paying the higher cost for whatever reason, especially if the account is being managed well. There are always trade-offs.”


Lessons Learned

Here are a few lessons Jean Huckstadt picked up while doing an extensive RFP for Meredith four years ago:

Break the process down into manageable components with separate timelines so you can celebrate meeting the incremental goals rather than waiting for the “end” of the project.

An RFP project can take on a life of its own. It’s easy to get caught up in information and detail that is interesting but falls outside of the objective or scope.

Assign an administrative gatekeeper to track the receipt of the responses, Q&A conversations and get final results back to the vendor.


The Impact of Consolidation

Palm Coast Data announced last month that it will be absorbing Kable Fulfillment Services into the Palm Coast brand and moving the Colorado and Illinois operations down to Palm Coast, Florida. The combined entity has a client roster of more than 300 U.S. publishers. The move could mean less individualized attention for the bureau’s clients, a temporary loss of market knowledge and less room for price negotiations. It could also mean a simpler RFP process.

“Assuming the transition of Palm Coast Data and Kable results in the ‘best of both,’ and if the objective is functionality, the RFP process is simplified by one response rather than two,” Jean Huckstadt, consumer marketing fulfillment director, Meredith, says. “However, if pricing is the objective, it narrows the ability to negotiate effectively between what used to be two vendors.”

Steven Jacobs, fulfillment manager, American Media, says that the RFP process itself will not change, but that the merger could impact the competitive landscape, especially for large publishers. “They are much more limited as to what companies can handle their business,” he says. “As a result, I would also expect to see less wiggle room in price negotiations at that level.

For smaller publications, there are still many more options. But the smaller fulfillment houses don’t have as many ‘bells and whistles’ available. I would expect to see some mergers among the smaller fulfillment companies with the emergence of a new number-three player in the market.”