Why an SEM RFP Is a Mistake, Part 2

  |  November 3, 2003   |  Comments

RFPs won't help most companies select the best SEM vendor. There's a better way. Last of a two-part series.

In part 1, we discussed how using a request for proposal (RFP) to shop search engine marketing (SEM) services is a mistake because it doesn't capture expertise or relationship. Nor do first-time buyers possess sufficient depth to formulate the specifications needed to select the right vendor.

This week, we examine open communication and propose a request for information (RFI) as an alternative.

What Reduces Available Options?

The RFP process limits open dialogue. Communication from the RFP-issuing organization to vendors is typically formal and restrictive ("Here are the questions. Provide answers in our language."). What's missing is a chance to ask, "Do I really understand the questions?" or respond, "That's the wrong question to ask. Consider the following question instead..."

Because RFPs in this space typically reflect an inexperienced buyer's specifications (most companies are buying their first or second SEM engagement), SEM vendors respond to questions that are often too vague to distinguish one vendor's service offering from another's. That's of questionable value to the RFP-issuing company. Recent RFPs I've reviewed ask the following with some frequency:

  • Do you have proprietary technology? For what? Is this a good thing or bad thing?

  • What is your strategy for natural SEO? What is your strategy for Web marketing? What problem do you want us to solve? A "generic" SEM strategy without consideration of your marketing and site challenges is not a particularly valuable discussion.

  • What's your pricing? For what? It depends on size and scope. Which/how many sites require SEM services? How many Web pages? How many audiences? Is a fee schedule expected?

  • What activities/research are involved in identifying keywords? Keyword research is often a sophisticated process. How can a first-time buyer assess these answers?

In an RFP, vendors must force-fit offerings to client specifications and often omit value-creating distinctions.

Some RFPs do provide opportunities for limited dialogue in an open Q & A. In this case, vendors can ask questions, but only if they're willing to share both their questions and the answers provided by the buyer with all their competitors who are asked to submit proposals. Vendors with real competitive distinctions are reluctant to disclose these to their competitors. Again, the client loses.

RFPs Limit Choice

A real option-killer is the costly, labor-intensive nature of the RFP process itself. Many worthy SEM vendors don't respond to RFPs. They don't have the time or staff to invest in what they rightly perceive as a low-percentage sales opportunity. Vendors that do respond are often required to build RFP response costs into their service fees. In short, a process designed to save the buyer money may actually end up costing more -- and may not result in consideration of the best vendor.

The Solution and Where to Start

Start a dialogue with SEM vendors through an RFI. There are hundreds of SEM vendors. The SEM List (published by ClickZ's parent company) may be a good place to start.

What to Include in an RFI

Begin by outlining what you understand to be the issues and challenges you face. Give prospective vendors detailed information about current conditions. Include:

  • Overall purpose and goals of the Web site (e.g., e-commerce vs. branding vs. marketing bucket vs. educational, etc.).

  • Poor or good rankings you've attained on your own.

  • Your site's architecture.

  • Competitors' rankings on keywords you're targeting.

  • Current search traffic.

  • Keywords that drive traffic and conversion in both pay-per-click (PPC) and natural search.

  • Current conversion rate.

  • Revenue and margin (if you can share it) from search traffic. (You can't ask someone to help you make money if you don't first teach them your model.)

  • Perceived competitive threat. What keeps you up at night?

Rather than beginning with a set of excruciatingly tight specs, ask respondents to show the value of their offerings.

Ask all the vendors to assess your own evaluation of the situation. If they more or less parrot back the concerns you articulated in the RFI, cross them off the list. My ClickZ colleague and CEO of PPC search service, Did-it.com, Kevin Lee, suggests you ask them to evaluate the current challenges of your search marketing campaign and their own experience addressing similar challenges with current clients.

Ask what their overall strategy for your site would be rather than providing a catalog of (undifferentiated) tactics. If they can't articulate a strategy or don't understand the difference between a strategy and a tactic, disqualify them.

Important: As vendors present recommendations, ask for the basis of the recommendations.

If they can't support recommendations with scientific and statistical evidence and relate their recommendations to their past performance and to the characteristics of your Web site and your market condition, disqualify them.

If they haven't measured their own performance and tactics, if they don't know what worked and what didn't, they'll be guessing on your behalf, too. Maybe they got lucky. They may get lucky for you. Then again, maybe they won't.

Ask them to outline a potential path (a timeline) to business results. Encourage them to describe failures as well as successes. Ask what they learned from both.

Ask each vendor to walk you through specific business results it achieved for a company with a similar Web site, in a similar industry, and, above all, for a client who had similar goals.

General Business Fitness Questions

Ask for three years of audited financials. Credible firms have them and share them. Review these carefully.

Ask for details about their errors and omissions insurance policy. This is the most basic business insurance that protects you if their work or staff inadvertently brings down your Web site. You'd be surprised at how few firms carry this important insurance.

Often the confident, authoritative expert-types who pitch your business will never work on your campaign. So ask about the account staff who will work on your campaign:

  • How long have they been employed by the firm?

  • What's their SEM experience?

  • Name their other accounts.

  • What results did they produce? Ask to speak to references at those accounts.

  • Are contractors doing the work? Do they outsource expertise and your confidential data to insecure facilities and home offices?

  • What do they pay their SEM staff?

  • Are you getting well-trained, seasoned, salaried professionals or hourly, even temporary, workers?

Some firms have high turnover. As a result, they have inexperienced staff. Sure, every firm will have one or two glowing reference accounts. Hey, everyone has relatives, right?

Go beyond the first reference list, and dig deeper into their reference bench. You may be surprised by what you find.

The best format for answering an RFI is a brief meeting or conference call. The meeting should have topic-level structure.

Invite the two top contenders in for face-to-face pitches. It's about results, but also relationship and trust. Two finalist vendors will provide price competition, too. Encourage them to bring the team that will work on your account. You want to meet them and evaluate their credibility and capability. Trust, but verify. Better yet, visit the finalists. A Web site can make a tiny basement operation look like a big company. Know what you're buying, and make a visit. The amount of money at stake warrants it.

Ultimately, it's your choice. If you want to get the best result from your SEM selection process, you owe it to yourself and your company to find out what's worked, what's failed, and what's new. Be open to new data, and trust yourself to make the right decision based on the best information and a selection process that gives you the full picture.

Here's to the demise of the SEM RFP!

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ABOUT THE AUTHOR

Fredrick Marckini

Fredrick Marckini is the founder and CEO of iProspect. Established in 1996 as the nation's first SEM-only firm, iProspect provides services that maximize online sales and marketing ROI through natural SEO, PPC advertising management, paid inclusion management, and Web analytics services.

Fredrick is recognized as a leading expert in the field of SEM and has authored three of the SEM industry's most respected books: "Secrets To Achieving Top-10 Positions" (1997), "Achieving Top-10 Rankings in Internet Search Engines" (1998), and "Search Engine Positioning" (2001, considered by most to be the industry bible). Considered a pioneer of SEM, Frederick was named to the Top 100 Marketers 2005 list from "BtoB Magazine."

Fredrick is a frequent speaker at industry conferences around the country, including Search Engine Strategies, ad:tech, Frost & Sullivan, and the eMarketing Association. In addition to ClickZ columns, He has written bylined articles for Search Engine Watch, "BtoB Magazine," "CMO Magazine," and numerous other publications. He has been interviewed and profiled in a variety of media outlets, including "The Wall Street Journal," "BusinessWeek," "The New York Times," "The Washington Post," "Financial Times," "Investor's Business Daily," "Internet Retailer," and National Public Radio.

Fredrick serves on the board for the Ad Club of Boston and was a founding board member of the Search Engine Marketing Professional Organization (SEMPO). He earned a bachelor's degree from Franciscan University in Ohio.

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