Have you ever considered publishing a Request for Proposals (RFP)?
Even though they’ve proven successful for hotels, RFPs are largely missing from the short-term rental manager’s toolbox.
Here’s how to put together an RFP for vacation rental software.
A Request for Proposal or RFP is a document that businesses put together when they need outside help with a project or a specific business need.
Its purpose is to solicit proposals from contractors or service providers who have the ability to fulfil that need. Once the proposals are submitted, the company evaluates them and selects the most suitable bidder.
The RFP document contains details about the project/business need, the requirements that bidding companies have to meet and guidelines regarding the format of proposals.
Hotels have been running RFP processes for a long time, but they’re still uncommon in the vacation rental world.
Selecting software for your short-term rental property management company is a major business decision.
It’s going to affect not only your day-to-day life, but also your bottom line.
You need to make an informed decision based on your business needs, your budget, and the amount of time you can spare for onboarding.
What’s more, finding the right software is time-consuming. There are thousands of solutions out there, each with a different focus, strengths and weaknesses. Comparing them all would take months of work.
That’s why a well-planned and effectively-executed RFP process can be of tremendous help.
Instead of having to pore over hundreds of product pages and sit through hours of software demos, you can announce your requirements and have tech providers come to you with solutions that fit your needs.
“ VTrips consistently uses RFP’s to fully and transparently disclose requirements concerning the products, services, and support it is seeking.”Lynn Thurston
Some of the world’s largest vacation rental property management companies have had success with RFPs.
For example, Florida-based VTrips “consistently uses RFP’s to fully and transparently disclose requirements concerning the products, services, and support it is seeking,” Project Manager Lynn Thurston told us.
When VTrips was seeking to change its current property management system, the company sent an RFP to property management software firms.
On another occasion, VTrips developed an RFP to find a new website development and management provider. In both cases, “discussions resulted in a Statement of Work and a Final Contract that was agreed to by all parties,” said Lynn.
You may be wondering: don’t RFP processes drag on forever? Not if you approach them strategically, with a clear purpose and a strict timeline in mind. Let’s take a look at how to do it effectively.
“A good RFP provides information about the company’s background, the core objectives of the RFP, required timelines, submission guidelines, how a vendor will be selected, detailed technical and performance requirements, and who its team members will be.”Lynn Thurston
There’s a lot that goes into a successful RPF process.
“A good RFP provides information about the company’s background, the core objectives of the RFP, required timelines, submission guidelines, how a vendor will be selected, detailed technical and performance requirements, and who its team members will be,” said Lynn. “Ensuring the details are provided is very important.”
It sounds complicated, but don’t worry. We’ve broken the RFP process down into 10 easy-to-follow steps.
The first thing you need to do when you start thinking about issuing an RFP is to set clear goals.
What would you like to achieve with the help of new vacation rentals software? What business problems are you trying to solve? How will this software help you streamline your operations and/or your marketing?
Answering these questions will help you set clear requirements for providers who will answer your request.
Speak to every stakeholder in your company as well as team members who will use the software on a daily basis. Their input is crucial to identifying your needs.
Make a list of must-haves, nice-to-haves and dealbreakers. Instead of focusing on what features the software needs to have, focus on what problems it needs to solve.
This way, you won’t fall into the trap of creating an RFP that’s biased towards a specific solution. If you want the best vacation rental software, you need to keep an open mind.
Once you’ve defined your goals and requirements, include them in your RPF document in the form of questions that bidders will have to address in their proposals. Here are a few examples:
The next thing you need to do is come up with a specific schedule. Otherwise, the RFP process will take too long and it won’t be worth it.
You should state all your most important dates and deadlines in the RFP document, so bidders know how fast they need to move if they want to be considered.
Here are some essential dates to include:
In your RFP document, you will have a section that describes the evaluation criteria that you will apply to each submitted proposal. This will help vacation rental software providers figure out what to focus on.
You should include exact criteria and scoring guidelines that will help you compare and contrast proposals.
Here are some criteria to include:
The next stage is to write your RFP. Compile everything you’ve gathered in the previous stages into a single document.
The idea behind it is to help guide vendors in their responses. So it’s really important to make sure that your RFP is well-structured and clearly defines what you’re looking for. Include a brief description of the project as well as a key list of requirements.
How an RFP template should be structured:
Check out this example of a vacation rental RFP, it will give you a good indication of what your RFP should look like.
The next stage is to start inviting vacation rental software vendors to participate in your RFP.
To ensure quality vendors, we recommend asking for references and case studies either as part of the RFP process or even before choosing vendors to participate. It can be handy to review case studies or talk to existing customers before deciding who to consider.
TIP: It’s also a good idea to have vendors sign a non-disclaimer in advance, especially if you need to disclose confidential information as part of the process.
“A response to an RFP is the starting point, not the endpoint. Before a decision is made about which vendor to select, detailed discussions should be conducted to verify that a vendor’s product will meet your company’s needs.”Lynn Thurston
Once vendors read your RFP document, they’re bound to have some questions. Even if you think you’ve covered everything, they still might find points that aren’t 100% clear to them.
The best way to make sure everyone’s on the same page is to organise a group conference. Invite all your software vendors to join and encourage them to ask questions.
The group conference format is key to avoiding preferential treatment of one vendor over another and making sure that everyone has access to the same information.
In general, you should see the RFP process as an opportunity to communicate with vendors and provide constant feedback.
“A response to an RFP is the starting point, not the endpoint,” said Lynn. “Before a decision is made about which vendor to select, detailed discussions should be conducted to verify that a vendor’s product will meet your company’s needs. It is not uncommon for a vendor to interpret a performance requirement one way, and you to interpret it another way.”
When you get to the evaluation stage, it’s imperative to keep the process rolling. This stage can be difficult to navigate, especially if the software is going to impact many teams, and it can get bogged down by contrasting opinions.
In point 3, you’ve already defined an evaluation process and scoring guidelines to assess each vendor. This will not only streamline your process but also give you a structure to follow.
If you have an RFP review committee, it’s a good idea to send out the vendor proposals in a single batch, and have them review and score the proposals using your process.
TIP: Use a team management tool such as Trello to keep you and your team on track.
If there are any follow-up questions, gather those into a single shared document to send out to vendors. And keep the discussions going!
“Further discussions provide clarity for both sides. Although the pandemic has made it difficult, site visits to meet with company officials to get your questions answered is recommended,” Lynn said.
Once you’ve had a chance to review all the applicants, you and your team should convene to decide on a shortlist. Try to keep your list to no more than four vendors.
Next, invite your shortlisted vendors to present their product in a five-minute presentation. This gives you a chance to delve deeper into specific questions regarding your needs.
Points to cover include:
Once you’ve seen all the presentations, pick your final two finalists almost immediately. This will help to keep the flow of your RFP moving along smoothly.
Once you’ve chosen your two finalists, it’s time to negotiate and pick the winner. Choose two vendors at this stage so that you have the opportunity to compare and contrast as well as take pricing into consideration.
When you and your team are reviewing the vendor’s contracts and pricing, watch out for red flags like vague commitments to metrics and arduous terms. The contract should clearly stipulate the vendor’s obligations related to performance, service, reliability, security and implementation.
The negotiation phase tends to take longer than expected. So keep up the pressure to make sure you can reach your final decision quickly.
Congratulations, you’ve signed a contract! Now it’s time to implement your new software.
Once the operations team takes over the implementation of the chosen vacation rental software, it’s a good idea to keep the RFP team in the loop.
They will make sure that the vendor delivers on its promises. It’s also a good way to find loopholes in your RFP process. If you find any, you’ll know what to improve next time.
We hope you found this guide useful. We wish you lots of success with your first RFP for vacation rental software!
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