A Request for Proposal (RFP) is a message sent from an individual to a company, set of companies or market declaring and defining a need they want to be met.

RFPs form an engagement where customers declare their needs/ requirements/specifications and Vendors can respond with their offer/price/ terms. This creates an environment where the consumer is given a voice and a say in the product or solution, as opposed to accepting a solution that, by it's very nature, is defined by the vendor.

RFPs can take many forms:

• 'one-to-one', where a named individual sends his request directly to one or more named companies
• aggregated, where many different individuals' requests are collated and passed on to companies by an intermediary. Companies then respond to these RFPs either on an individual or collective basis.
• anonymized one-to-one or aggregated, where an intermediary informs a company or set of companies that there is a person or number of people seeking out this particular product or service, but where the companies concerned cannot have access to the names and addresses of the individuals concerned and have to deal with these individuals via the intermediary service (until a transaction is closed).

RFPs can range from simple commodity requests (e.g. motor insurance renewal) through to complex specifications for products or services that do not even exist yet.

Business case, for the individual

The individual gets three main benefits:

• Clarity          Companies only communicate with the individual about what he is interested in, when he is interested in it
• Efficiency     Potential suppliers provide users with rich and relevant information at very little cost (in terms of search, research etc)
• Value            Because suppliers know they are dealing with a hot qualified lead, they are prepared to invest more in winning the sale than they are in pursuing cold unqualified leads. Suppliers also know that they will be competing with other suppliers for this selling opportunity.

RFPs therefore reduce friction in transaction by change how both sides of the transaction communicate. They provide information in a structured format based on the customer’s intent.

Business case, for suppliers

• Reduced go-to-market costs. Suppliers know they are talking to the right people about the right things at the right time, thereby eliminating large amounts of waste from their go-to-market programs.
• Faster, more timely and efficient innovation. Any request for an item or attribute that the supplier doesn't currently supply represents valuable information about potential gaps in his product or service portfolfio
• Real time market tracking. As RFP services gain critical mass they have the ability to provide suppliers with a real-time window on unfolding and emerging market trends.

Necessary preconditions and infrastructure

For RFPs to succeed a number of building blocks need to be in place, including:

• individuals need to know that a VRM platform exists, as an agnostic and impartial and non-aligned [to commercial entities] entity: i.e. that this options exists; that they have another choice
• it must be very easy for the individual to input his request
• individuals need to have done the necessary research and product/market understanding to be able to specify the requirements they are asking for
• the request process must not act as a straitjacket
• it must encourage and help individuals to really explain what they are looking for (see 'needs articulation services')
• the request process needs to be flexible, yet structured so individuals have the ability to define their need completely while companies can make the data actionable, valuable.
• at the same time, intermediaries and companies must have efficient, standardized means of passing information about requests back and forth.
• it must be easy for individuals to access and act upon the answers they get
•  there must be a process through which the individual and organizations can readily opt to identify themselves to each other, to the extent appropriate for the interaction and transaction in question