RF-what? When businesses need to exchange information, you’ll often hear acronyms like RFI, RFP and RFQ. These similar-sounding terms are often used interchangeably and can cause confusion. However, each document serves a distinct purpose. Consequently, it’s important to understand the difference between an RFI vs RFP vs RFQ so you know how to use them and how to respond.
In short, the difference between these terms comes down to what you’re trying to accomplish. While all three documents help businesses exchange information, they each serve a distinct purpose. Used independently or together, RFIs, RFPs and RFQs are all important tools for communicating, reducing risk and forming mutually-beneficial partnerships.
So, what IS the difference between an RFI vs RFP vs RFQ? Here’s the short answer:
RFI
A request for information educates.
RFIs gather info to research potential solutions.
RFP
A request for proposal compares.
RFPs evaluate the overall value a vendor can offer.
RFQ
A request for quotation quantifies.
RFQs detail the cost of meeting a specific need.
But, that’s just the beginning.
In this article we’ll explain everything you need to know (and more) about what RFIs, RFQs and RFPs are. We’ll start with key definitions and uses. Then, we’ll share how to select the right one for your project. And, finally, we’ll provide our favorite examples and resources for learning even more
Table of contents
Admittedly, there’s a lot to cover here. So, use the link below to jump to each section.
Definitions to know: RFX, RFI, RFP, RFQ
There’s a lot of jargon and acronyms involved when businesses begin exchanging information to form a new partnership. So, before we dig into the differences between each of these documents, let’s cover a few key definitions.
What is an RFX?
The acronym RFX stands for request for ____ (fill in the blank). It’s a term used to collectively refer to any questionnaire request issued by a buyer to a prospective vendor. So, RFX could stand for RFP, RFQ, RFI, RFO and so on.
What is an RFI?
The acronym RFI stands for request for information. A request for information is a questionnaire used to ask vendors about their products and services. Often, RFIs gather general information, market details and solution ideas for planning purposes.
An RFI is the most casual of all the RFX options. It asks general questions about vendors and the market landscape. Rather than sending an unstructured email to potential vendors, a request for information provides a standardized format, which is easier to review. Additionally, RFIs are a quick way to fill in gaps in your research. According to TechTarget,
“An RFI is typically the first and most broadly cast of a series of requests intended to narrow down a list of candidates.”
RFI characteristics
- Serves as a casual introduction to vendors
- Offers a general overview of the vendor landscape
- Asks open-ended, high-level questions
- Used in the early stages of the buying process to refine vague project requirements
What is an RFP?
RFP is the acronym for request for proposal. A request for proposal is a detailed questionnaire used by buyers to collect decision-critical information and pricing from potential vendors. The RFP is one of the most commonly used tools for evaluating vendors and documenting selection justification.
An RFP is a formalized and structured way of getting specific vendor information (including pricing). It allows you to detail the problem you wish to solve and invites vendors to suggest solutions. Indeed, RFPs are very thorough and offer a side-by-side, fact-based comparison of vendors’ capabilities.
According to Hubspot,
“RFPs give you a sneak peek into different strategies you may not have considered since each vendor will include their own unique action plan along with their bid.”
RFP characteristics
- Shares background information about your problem, process and needs
- Includes detailed questions about the vendor and solution
- Offers specific parameters for the services and products you’re seeking
- Indicates you moved beyond exploration and are ready to buy
- Compares vendors based on your unique priorities
What is an RFQ?
RFQ is an acronym that stands for request for quote or quotation. A request for quotation is a document that details a buyer’s needs and asks vendors to respond with a detailed pricing proposal. Generally, a buyer issues an RFQ when looking for the lowest possible price.
An RFQ is a request sent to vendors for pricing and payment information. Generally, it includes detailed requirements and deliverables. Unlike the RFI and RFP, the RFQ rarely includes questions, because the buyer must already know exactly what they need. Indeed, only use this document if you are well aware of marketplace conditions and offerings. An RFQ means that a purchase is imminent and the list of needs detailed in the request rarely changes.
According to Investopedia,
“When the soliciting company knows the exact number or type of product or services it desires, it customarily uses an RFQ. Typically, companies use an RFQ when products and services are standardized, or off-the-shelf.”
RFQ characteristics
- Includes a list of detailed requirements
- Centers around deliverables, costs and payment terms
- Used when you already know exactly what you’re looking for
- Indicates vendors’ ability to provide the requested services and goods as requested
- Offers with the lowest price generally win
RFI vs RFP vs RFQ comparison guide
As you can see from the definitions above, each RFX document has a unique goal. But there are other key differences between an RFI vs RFP vs RFQ. Outlined here, you’ll see that there’s a significant difference in the purpose, the questions the document asks, the purchase readiness indicated by the request, the style of the document, and its potential advantages.
Request for information
Purpose:
To gather data for planning purposes
Asks:
General questions designed to educate and inform
Purchase readiness:
Not yet ready, this is the exploratory phase
Request style:
Casual, asking for help
Response style:
Informal and consultative — your content will be more along the lines of solution briefs, case studies and custom answers to open-ended questions.
Advantage:
Offers buyers helpful insight and an up-to-date look at potential solutions.
Request for proposal
Purpose:
To compare vendor solutions and value
Asks:
Detailed questions about the product, people and process
Purchase readiness:
A purchase is planned, this is the due diligence phase
Request style:
Formal, detailed and direct
Response style:
The tone of an RFP response mirrors the structured and formal nature of the request. Content will be in the form of answers to many, many questions.
Advantage:
Provides a clear comparison of the capabilities and value vendors offer
Request for quotation
Purpose:
To find unit pricing for specific items
Asks:
Pricing questions about specific goods or services
Purchase readiness:
A purchase is imminent, this is the final step
Request style:
Structured and itemized
Response style:
Content in an RFQ response is usually very concise and unembellished. May also contain some technical, financial, and legal information.
Advantage:
Removes distractions and allows buyers to focus exclusively on pricing
How are RFIs, RFPs and RFQs related?
Each RFX achieves a unique goal. However, the core purpose of every RFI, RFP and RFQ document is to help select the perfect vendor. According to Kevin Iwamoto, senior consultant at Goldspring Consulting,
“All three have been used globally for decades to obtain relevant information from potential suppliers and are meant to create and establish a fair and equal weighted process where all vendors, incumbent and potential, have a chance to become a ‘preferred’ supplier for a corporation. They have been instrumental in enterprise risk mitigation, process standardization, cost savings and cost avoidance.”
Who sends RFIs, RFPs and RFQs and why?
The practice of creating and issuing RFIs, RFQs and RFPs is called request management. While sourcing professionals and procurement consultants work with RFX tools daily, they are also useful to others. For example, a small- or medium-sized business that doesn’t have a dedicated procurement department may require department heads to use an RFP before making large purchases. Generally, this is to ensure a thoughtful, objective and financially-sound decision.
For high-value, strategic purchases, a multi-step process is wise. For example, when selecting a new accounting software to replace an old solution you may have a list of needs including a few custom requirements. Technology moves so quickly that starting with an RFI can help you explore new functionality that you may not be aware of. Then, once you know what features you need, you can narrow your vendor selection and send a more detailed RFP.
Who responds to RFIs, RFPs and RFQs and why?
Responding to these RFX documents (and other information requests) is called response management. When it comes to creating compelling responses that may lead to new business, it’s a team effort typically led by a proposal manager. The response process also involves sales, marketing and subject matter experts.
RFPs, RFIs and RFQs are a standard part of many procurement and sales cycles. They provide insight on customer needs and direct access to decision makers. Accordingly, businesses view these requests as opportunities to connect with buyers and win business. For many, answering RFPs is a significant part of their growth strategy.
How to issue and respond to requests
There are two sides to every RFI, RFP and RFQ: the buyer who issues the request and the vendor who responds. Here’s tips so you can do it all.
RFI, RFP, RFQ tips for buyers (issuers)
When you need to request information from a vendor, the first step is to decide which RFX to use.
Start by answering these questions:
- Do you know what questions to ask a vendor?
- Are your questions very specific or more general?
- Do you already have a preferred vendor list (a shortlist)?
- Do you need to bid out the work through a formal RFP process?
- Are you working with repeat or first-time vendors?
- Do you know exactly what you’re looking for, or would you like vendors to make suggestions?
With this information, you should have everything you need to decide if you should use an RFI vs RFP vs RFQ.
- If you’re shopping for very specific services and know exactly what you want, then an RFQ is your best best
- However, if you’re close to a purchase but open to ideas, an RFP is probably the way to go
- Finally, if you’re just trying to get an overview of your vendors or see if there’s a solution to your pain, then the simpler RFI might be the better choice
Now, you can start writing your request.
Tips for writing an RFI
- Give responders context — tell them about your challenge and goals
- Let vendors confirm or challenge the research you’ve conducted independently
- You don’t need to make any promises or commitments, you’re simply gathering information
- Keep it short to encourage and maximize vendor engagement
- Seek their perspectives, not detailed capabilities (you’ll judge these later)
- Ask if they have any questions, while it may seem counterintuitive, it can give valuable insight
- Cast a wide net, you’ll narrow your selection later in the process
Tips for writing an RFP
- If you’re looking for specialized or customized service, ask to see an example of that kind of work done for other clients
- Avoid sticker shock by requiring a comprehensive pricing plan
- Be as in-depth as you need to be. At this point, you’re both invested, so make sure your priority questions are as thorough as they need to be
- If you’re unsure of a seller’s expertise or competency for your needs, address it. Ask them for the examples, certifications or references that will put you at ease
- Avoid vague questions — you have specific expectations, whether you realize it or not. So, if you’re having problems writing exact requirement questions, collaborate with someone outside the situation who can help challenge assumptions
Tips for writing an RFQ
- Provide minimal background and a list of requirements
- Detail your needs in a list of products, features and functionality required
- Include the quantity of goods or duration of service required
- Provide a timeline for expected delivery
- State your preferred payment terms
- Include a pricing table or form for consistency
RFI, RFP, RFQ tips for vendors (responders)
Regardless of which kind of request you’re responding to, there are two key practices that are essential to success. First, using your competitive differentiators. And second, leveraging a content library.
1. Know your competitive differentiators
The purpose of an RFI, RFP or RFQ is to compare several vendors. Knowing how to highlight your advantages is key to winning. It’s common for buyers to ask about these things directly. So, be prepared to answer questions like these:
- What is the competitive advantage of your solution?
- Describe your competitive position relative to your competitors.
- When comparing yourself to the market, what are the unique selling points?
- Briefly state how you are differentiated from any competitors.
- Why should we work with you instead of one of your competitors?
Avoid offering a generic answer to these questions. Instead of using jargon-y adjectives that everyone else uses, focus on demonstrating the value your solution provides.
Knowing company differentiators is half the battle for many organizations — take the time to explore what these are for each prospective customer and how to communicate them.
“A value proposition offers clients something they want and gives them a good reason to choose you over your competitors. In the executive summary and in your full proposal, communicate a strong value proposition that matches your client’s needs and demonstrates your unique offer.”
2. Leverage a content library
How do you make sure the best versions of your competitive differentiators are easy for your team to use in RFIs, RFPs and RFQs? Make sure they’re in your response content library, of course.
This is where all of your response content is stored and organized for future use. Much of the content in these libraries exists as Q&A pairs, making them easy to find and understand. Using response management software to create a content library has many advantages:
- Repeatability – Build your response process around the foundation of your response management software. It will help establish steps for how you develop a response, access content, and collaborate with writers, editors, and experts time and again.
- Efficiency – Make everything easier and faster—from finding content and assembling documents, to working with collaborators. Teams that do so are often able to increase efficiency by 40%.
- Quality – With much of the time-intensive activities of responding offloaded to AI-enabled software and rock-solid processes, you can spend more time on personalizing responses and generating revenue.
Tips for responding to an RFI
As you respond to an RFI, remember that the prospective customer is still in the information-gathering stage of their process. Your response is an opportunity to connect with a future buyer, share your industry expertise and shape the content of any subsequent RFP the buyer may issue.
- Write a thoughtful and thorough response focused on both solving the presented challenge and sharing your knowledge
- Collaborate on the RFI response with subject matter experts who have the most up-to-date knowledge in their field
- If you don’t meet the exact requested criteria, but have an solution that solves the challenge, answer anyway
- Focus on the creative and unique ways your organization would approach the customer’s needs
- Use a cover letter or executive summary to offer a follow up call to connect and offer specific insight or to answer any questions that may come up
For more detail on how to respond to an RFI, check out this blog: Succeed with your next request for information response.
Tips for responding to an RFP
An RFP seeks to compare qualitative information as objectively as possible. Ideally, the buyer is looking for the solution that offers the best overall value. To help accomplish that, the RFP includes substantial detail about the buyer’s challenges, needs and goals. Be sure to use this information to your best advantage.
- Review the RFP before beginning to ensure you fully (or at least mostly) meet the RFP criteria
- Be sure to follow instructions closely and answer the RFP questions thoroughly
- Incorporate win themes that convey your unique differentiators, expertise and understanding of the customer’s needs
- Include customer stories with quantifiable results when possible, use your RFP content library to prepare these proactively
- Customize your responses to include the buyer’s company name and echo the language they used
To explore how RFP software makes responding faster and winning easier check out this blog: Why you need RFP software.
Tips for responding to an RFQ
- RFQs may not include detailed context or background, ask for clarification if needed
- Take note of deadlines and delivery requirements to ensure your organization can meet the requirements
- Clearly state any additional costs and fees associated with the requested items
- This could be your only shot to win the business so, provide your best offer that is competitive but sufficiently profitable
Learn more about how to win RFQs and grow revenue here: What is a request for quote.
Sample RFI, RFP and RFQ scenarios and questions
RFI example scenario
ABC Company wants to strengthen their relationship with customers through social media channels. They currently maintain a Facebook page, Twitter account, and LinkedIn presence.
The challenge is to engage current customers and use their networks to refer your products and services to peers. Based on this scenario, here are some RFI questions you might ask:
- What social media channels do you consider to be important for ABC Company and why?
- What are your initial impressions of our social media presence?
- How do you measure ROI for social media activities?
- For efficient integration between our internal marketing and external service providers, what people, process and technology factors do you think are important to consider? Are there any limitations you need to know about?
- What social media channels do you consider to be important for ABC Company and why?
- What are your initial impressions of our social media presence?
- How do you measure ROI for social media activities?
- For efficient integration between our internal marketing and external service providers, what people, process and technology factors do you think are important to consider? Are there any limitations you need to know about?
RFP example scenario
Your company needs to acquire new accounting software. Beyond getting pricing and approach details, the RFP is a great place to get info on how you will work together. Ask how you can reduce risk, save time and save money. Here are some sample RFP questions to consider:
- How will you approach the implementation of the software? What are your plans to ensure optimal adoption?
- What steps can we pursue to control costs and limit cost overruns? How will you work with us to ensure we maximize value without increasing costs?
- What risks to the timeline or budget do you see, based on your understanding of our organization? A high-level question like this gives you a sense of how much thought or effort they’re putting into their response
- How are you monitoring and staying ahead of trends in our industry? What do you do to encourage innovation?
RFQ example scenario
If your organization needs to purchase new janitorial supplies, your RFQ may include the following items:
- Multi-surface cleaner – Cost per ounce: $______
- 13-gallon, 1 mil trash can liner – Cost per 100: $______
- 1.2-gallon, .55 mil small trash can liner – Cost per 100: $______
- Hand soap – Cost per ounce: $______
- 8″ paper towel roll – Cost per 800 ft. roll: $______
- Weekly delivery cost: $______
- Net 60 payment terms: Yes or no
Regardless of which RFX you issue or respond to, RFP software can help. To see how you can transform all of your request and response processes to make your organization more efficient, effective and profitable, request a Responsive demo.
Originally published April 25, 2021 — Updated June 15, 2023
