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Data-driven strategies for increasing RFP win rate

Data-driven strategies for increasing RFP win rate

There are two primary reasons why you should aggressively pursue requests for proposals (RFPs). One, they’re a great way to […]


Category: Tag: RFP evaluation

Data-driven strategies for increasing RFP win rate

Data-driven strategies for increasing RFP win rate

There are two primary reasons why you should aggressively pursue requests for proposals (RFPs). One, they’re a great way to build pipeline. Which is key for the 69% of B2B salespeople who do not have enough leads in their pipeline to meet quota. Two, they can be a major revenue driver. You just have to make sure you’re pursuing the right RFPs and doing so as efficiently as possible. Take my word for it. Just kidding. I actually have data to back it up. I also did an entire webinar on this topic, if you’re ready for a deep dive.

RFPs: Opportunity and Risk

Globally, $11 trillion of revenue is won through competitive proposal processes (RFPs) every year. You may be asking, “What is a good proposal win rate?” RFPIO’s research puts the average RFP win rate at 45%. But that’s across all industries. It will vary according to your level of specialization. RFPs exist in multiple markets, including government, construction, supply chain, manufacturing, systems integration, healthcare, and technology.

$11 trillion of revenue is won through competitive proposal processes (RFPs) every year.

As a salesperson, I always wanted to include RFPs to help grow my pipeline. A healthy sales pipeline is 4-5x the close rate, and RFPs can represent deal sizes large enough to keep my pipeline super healthy. Since working in sales, I’ve led proposal teams and now have my own company, Patri, that helps qualify sales opportunities, including RFPs. I’ve also learned that too many salespeople and leaders are avoiding RFPs.

RFPs are not easy, and they can be labor-intensive. I’ve known many salespeople who find them too restrictive. In other words, there’s too much red tape to navigate to put together a response.

The fact is that only a little over half of all salespeople are hitting their quotas. There’s a lot of desperation out there. If you’re already in desperation mode, then the notion of allocating resources to an RFP proposal is tantamount to putting all your eggs in one basket. Proposal opportunities are more than 5x more expensive than traditional sales opportunities. As a result, companies are spending an estimated $200+ billion per year on lost bid opportunities alone.

Companies are spending an estimated $200+ billion per year on lost bid opportunities alone.

So if you boil it all down, objections to pursuing RFPs come down to time and finding the right opportunities. I’m going to unleash my inner salesperson and help you overcome those objections. Let’s look at the data.

5 smart moves to increase your RFP win rate

5 smart moves to increase your RFP win rate

  1. Pursue RFPs you have the highest probability of winning: Qualifying RFP opportunities before you respond helps reduce your loss rate and increase your win rate. Patri clients have saved $26 million and 27,000 hours by focusing efforts only on opportunities they can realistically win.
  2. Increase RFP response volume: Teams with dedicated proposal professionals submitted 3.5x more responses in 2020.
  3. Increase sales efficiency: Teams using RFP software submit an average of 46% more responses every year.
  4. Improve RFP response quality: Medical device manufacturer IBA re-invested time saved from RFP software into improving response quality and increased win rate by 15% in the first year.
  5. Streamline collaboration: 38% of responders cite collaborating with subject matter experts (SMEs) to create and review content as their biggest headache.

So that gives you an idea of what you can do. Now, how can you win more RFPs? Qualify opportunities and implement RFP response software.

How to win more RFPs in 3 steps

Step 1: Qualify based on data

I remember early in my proposal response days, I was the salesperson and proposal manager. Wearing both hats, anything I wanted to pursue I had to make sure was winnable. Some of those early parameters were relationship status, incumbency, solution fit, and requirement fit. I grew this exercise in qualification into my company, Patri.

Patri sits between RFP identification and response, at that pivotal qualification point. We analyze data to provide clients a fit score and call out their strengths and weaknesses that will play into their pursuit of an opportunity. So far, we have helped qualify more than $40 billion of opportunities and helped win $84.6 million worth of business.

Step 2: Save and re-invest time

When clients agree that an opportunity is fit enough to pursue, we recommend that they use RFP software to craft the best response possible. Solutions such as RFPIO automate manual processes and improve collaboration, freeing up your time for other things. The more time you have to fine-tune your proposal, the better your proposal will be, and the higher your win rate.

RFP software helps proposal and sales teams save time (and achieve higher win rates) by:

  • Cutting response time by an average of 40%: Automatically respond to commonly-seen questions with Auto Respond, automation functionality powered by machine learning.
  • Managing and moderating content and projects: Organize RFP content, import projects, assign tasks, respond to questions, set up review cycles, and export into the source file or custom template.
  • Streamlining cross-functional collaboration: Easily collaborate across teams using in-app @mentioning and integration with Slack, Microsoft Teams, Google Hangouts, and Jira.
  • Making data-driven decisions: Gain insight into time spent, deals won, and resources used with built-in business intelligence and analytics.
  • Integrating into your existing tech stack: RFPIO integrates with more platforms than anyone, including popular CRM, SSO, cloud storage, and communication platforms.

The primary indicator for RFP software, like any other automation software, is that it saves time. It’s what you do with that time that will determine your level of success with increasing RFP win rate.

Re-invest time into responding to more RFPs with higher quality proposals. Also, like a pure shooter who moves well off the ball (a la Craig Hodges for 90s-era Bulls fans or Klay Thompson for current Warriors fans), you can work on your process outside of active projects. In other words, re-invest time into improving your content. So when that next RFP comes in you not only have content that’s locked and loaded, it’s high quality, too, which will improve your odds of getting shortlisted.

Step 3: Designate an owner of the response process

While RFP software delivers efficiency, you will get more value out of it if you have a dedicated proposal manager administering the software and the processes around it. This de-facto leader of the proposal team will also be responsible for:

  • Building relationships with other company stakeholders, including sales, product, legal, and marketing teams.
  • Driving user adoption, knowledge management, and other essential functions associated with RFP software.
  • Enabling sales to have a streamlined, unfettered user experience to minimize objections and elevate the value of RFPs in pipeline management.

Finally, it’s important to note that you don’t have to make double-digit gains in your RFP win rate to realize impressive results. For example, if a company’s average RFP is worth $570,000 and they submit 415 RFPs annually, with a win rate of 32%, the business value of their RFP process is $75,696,000. Improving the win rate just 2% would represent a nearly $5 million dollar increase.

ROI of increasing your RFP win rate

Pursuing RFPs doesn’t have to be a black box experience. Be transparent within the company. Know your costs and win rate probability. Go and embrace them. By properly qualifying opportunities and using RFP software, you can improve your own odds.

To learn more about how Patri can help you qualify opportunities, schedule a demo. To see if your RFP management process is ready for automation by RFPIO, schedule a demo.

9 key RFP metrics for minimizing risk and enhancing efficiency

9 key RFP metrics for minimizing risk and enhancing efficiency

When I first started responding to RFPs, few people were paying attention to RFP metrics. Sure, there were definitely some trailblazers who were measuring performance, analyzing wins and losses, and optimizing efficiency… but I certainly wasn’t one of them. For me, responding to RFPs was less of a process than a mad scramble to the deadline.

Since then, my approach to RFP response has evolved. Admittedly, this is likely aided by co-founding a company that streamlines the response process via automation and analytics. This article will focus on the latter.

If you do it right, data-driven management can help sales teams sell smarter. But it can also provide insights into how proposal teams can identify—then either avoid or plan around—process challenges, such as resource management challenges, reduced ROI, missing deadlines, and inefficient content development.

By the end of this article, you will understand which RFP metrics you should be tracking—and how to use these metrics to minimize risk and enhance efficiency.

RFP metrics overview

Responding to RFPs can be an expensive undertaking. When you’re working with limited time and resources, you need to be strategic about which projects you take on. Improving your odds of a win starts by determining whether you’re a good fit, and identifying risk factors early so you can avoid surprises and plan for success.

Don’t let dollar signs, commas, and zeros distract you from what’s possible. Go for that big deal, but don’t do it just because of the logo or the dollar value. Do it because the data tells you, “You have a great shot at winning!”

For answers about your future, look to the past. Use data from past wins, losses, and incompletes to determine whether a project is worth pursuing. When you capture an RFx and upload it as a new project to RFPIO, the system will evaluate past projects for comparison and provide a dashboard that gives you an idea of what to expect.

Here’s a small taste of some of the data points that will help you enhance efficiency and gain new insights throughout your response process:

Project Type: Segment your RFP data according to project type. If you respond to RFPs, Security Questionnaires, and DDQs, then you can set each of those as a project type so you’ll be able to compare apples to apples. You can also segment based on industry, size, geo, and more.

Segment your RFP data according to project type
Focus on Wins: How many similar past projects have you won? Lost? Understanding what kinds of projects have been submitted and won helps you focus your efforts only on projects you’re most likely to win moving forward.

Focus on RFPs you're likely to win
Project Scope: Identity total volume of work required to complete the project.

Identify project scope before starting any RFP
Time to Completion: See the shortest, longest, and average times for similar past projects. In a recent survey, we found that 57% of proposal managers said their primary goal is to improve the proposal management process to save time.

Understand the shortest, longest, and average times for similar past RFPs.
Resource Needs: Examine content that may need to be created or moderated. Identify primary authors and moderators from past projects.

Identify primary authors from past RFPs.
Content Needed: Understand what kinds of questions are being asked, and whether you have that information on hand.

Clearly understand the content available in the library
Taken in isolation, each of those data points means very little. Homing in on a single datapoint is just like trying to ride a bike with just the wheels—you can’t get anywhere without the pedal, seat, and handlebar.

Instead, it’s best to approach RFP metrics in context of the greater RFP response process. The trick is learning how to apply insights from each individual data point in a way that enhances efficiency and reduces risk.

To make this easier on you, this blog breaks down the RFP metrics you should be paying attention to according to how they fit into the RFP response process:

  • RFP metrics to inform bid/no-bid decisions
  • RFP metrics for planning, implementation, and finalization
  • RFP metrics for ongoing optimization

By the time you finish reading, you’ll understand which RFP metrics you should be tracking and how to track them.

RFP metrics to inform bid/no-bid decisions

The first step of the RFP response process is figuring out whether an RFP is a good fit. Is this RFP worth the time and resources it’s going to take to complete?

In making your fit analysis, you need to be selective. You don’t want to waste time and resources on an RFP you’re probably not going to win. But you also don’t want to walk away from a potential opportunity, and leave money on the table.

RFP metric #1: Determining whether you’re a fit

While this isn’t *technically* a metric, decomposing the RFP to determine whether you’re a fit is extremely important to the bid/no-bid decision making process, and worth mentioning here.

Before you spend anytime answering a single question, the first thing you’re going to want to do is determine whether your solution is in line with the key requirements. Do a quick scan to see if anything pops out at you.

What problem is the issuer looking to solve? What are the features and functionalities on their “must-have” and “should-have” list?

This is also a great way to determine whether you’re dealing with a wired RFP, where an incumbent exists and the issuer is just going through the motions. If there are a considerable number of requirements that seem irrelevant or very far off base, that’s a good sign the issuer isn’t interested and the RFP might not be a good use of your time.

If your solution isn’t in-line with the issuer’s needs… go ahead and throw it on the “thanks, but no thanks” pile.

Remember: Your time is valuable. Don’t spend it on proposals you’re not likely to win.

Even if you are a good fit, you may still decide it’s a no-go due to other priorities, deadlines, and resource commitments.

If you do find you’re regularly passing up potential opportunities due to bandwidth, you might consider a proposal automation solution. According to a recent survey, organizations using RFP-specific technology submit nearly 50% more RFPs than those who don’t.

RFP metric #2: Do your homework on the RFP issuer

Yes, okay, we’re two for two for metrics that aren’t technically metrics. But you’re going to want to do a background check on the RFP issuer before you do a single iota of work. Nothing is worse than putting the final touches on an RFP, only to discover you already submitted a near-identical RFP two years ago.

Once you’ve determined the decomposition of data is a fit, there are a few questions you’ll need to answer:

  • Has this company previously issued RFPs?
  • If yes, did you win? Were you short-listed?

If you did submit an RFP for this particular company before—and you lost—it might not be worth your time. But if you were short-listed, and the company ended up going with another vendor, it could indicate that they weren’t happy with the other vendor’s solution… and this might be your chance to shine.

If you have submitted an RFP for this particular company before, pull that old RFP from the archives, and examine it with a critical eye. What did you do well? What can be improved? You don’t always get a second chance to demonstrate your competitive advantage—don’t let this opportunity slip you by.

RFP metric #3: Analyzing past wins based on company profiles

Compare company size, project value, and vertical to your typical customer profile. If you usually work with enterprise companies, and the RFP you’ve just received is from a startup, your solution might not be a good fit.

Save yourself some time in the future by tracking these data points as you go along. Each time you receive a new RFP, make a note of the parameters you want to track. As a starting point, I would suggest tracking*:

  • Vertical
  • Company Size
  • Product Line
  • Project Type*
  • Project Stage*
  • Number of Questions*
  • Project Value*

*RFPIO tracks project type, stage, number of questions, and project value by default. You can track vertical, company size, and product link by creating a custom field.

Be diligent about tracking each parameter whenever you receive a new RFP. Over time, you’ll see how well you perform for each of your chosen parameters.

If you’re using RFPIO, you’ll get a performance snapshot each time you import a new project, including project status (e.g. won, lost), time spent, and Content Library usage (i.e. how many of the questions were answered using Auto Respond).

With RFPIO, you'll see a performance snapshot each time you import a new project.

RFP metric #4: Tracking your average RFP response rate

Your average RFP response rate is a function of the number of outgoing RFPs divided by the number of incoming RFPs.

Average RFP Response Rate = # Outgoing RFPs / # Incoming RFPs

There is no rule of thumb for what your average RFP response rate should be. For some companies, an 80% response rate is too low; for others, a 30% response rate is too high.

One thing that can be said for certain is that if every RFP that comes in is being responded to, something is off. It means you’re not qualifying what’s coming in. By going after everything, you end up wasting time and effort on deals you’re probably not going to win.

You can adjust your average RFP response rate as you go along. If your win rate is astronomical, it could be a sign that you want to start responding to more RFPs (and vice versa).

On the flip side, if you’re responding to 50% of RFPs, and your win rate is abysmal, it could be a sign you need to better qualify the deals you’re going after.

RFP metrics for planning, implementation, and finalization

Once you’ve decided this RFP is a go, it’s time to get to work. That means building out your team, keeping your project on track, and submitting a polished final product.

RFP metric #5: Determining Workload

Before you do anything, check the project size (i.e. number of questions) and the due date. This will give you a general idea of how much work you’ll have to do based on past performance.

After that, you can start assigning work out to your team. As you’re choosing SMEs, the most important metric to track is current assigned workload. If one of your SMEs has four projects due by the end of next week and you’re adding another one, you’re just asking for trouble. That’s the time you proactively find an alternate SME.

If you’re using RFPIO, you can check current SME workload right in the application. The system will tell you how much work is assigned to which SMEs, what the workload looks like, and if there is any overload.

If you’re not using proposal management software, you can also keep track of SME workload using spreadsheets; you’ll just have to make time to keep your spreadsheet up to date.

RFP metric #6: Readability Score

If a proposal is difficult to understand, it increases the cost for bidders during the procurement process. Confusion leads to delays. Delays drive up costs. And everyone loses.

Most people read at a 10th grade level. Make life easy for your buyers by writing at that same level. Avoid delays by calculating readability as content is being added, using an editing tool like the Hemingway App or the Flesch reading ease test.

RFP metric #7: Probability of Win Score (PWIN)

Here’s where you take an honest look at your work so far and ask yourself: How can I increase my odds of winning?

A PWIN (Probably of Win) score is calculated based on the answers to a variety of questions designed to best determine how well the company’s team, experience, and contacts match those required for the opportunity. The higher the score, the better chances of winning the contract will be.

Ask questions like:

  • How does the language compare to previous projects? Is it accurate, positive? Does it align with winning RFPs from the past?
  • Have you answered all the questions? Have you met all the required conditions?
  • How often do you answer in the affirmative vs. negative?

Be honest with yourself. Have you said “no” to a certain percentage of must-have or should-have requirements? Are you qualifying too much, or agreeing to build too many features? It might not be worth the final proofing and polishing to primp your proposal to perfection.

Just because you’ve spent a lot of time getting your proposal this far, it doesn’t mean you need to spend even more time getting it over the finish line. Your time is valuable. It’s okay to throw in the towel.

Regardless of whether you decide to submit the proposal, make note of the requirements you’re missing, and coordinate with your product management team to get them into the roadmap.

RFP metrics for improving win rate and optimizing efficiency

You should constantly be looking for opportunities to optimize efficiency and improve win rate. Tracking metrics and analyzing the data can help you do that.

RFP metric #8: Identify Content Gaps

Auditing your Content Library is an art unto itself. From an RFP metrics perspective, RFPIO includes an insights tool that helps you identify content gaps, content that needs to be updated, and content that needs to be created.

What terms are being used in search? What’s being found? What’s not being found? Let’s say a security product company is seeing a lot of requests for “zero trust” but no content exists because it’s new terminology that has quickly become industry norm.

The insight tool alerts content owners that content needs to include “zero trust” in order to stay relevant—and could provide insight to leadership and product teams on where the market is headed.

Sometimes you just need new content in your library. For example, if a lot of people are looking for information about “outages” (i.e., what has been your longest outage?), but turning up empty-handed, it might be a good idea to reach out to your product team to let them know new content is needed.

RFP metric #9: Determine content library health

To determine how healthy your content library is, see what percentage of RFPs can be completed with auto-respond, as opposed to manually creating answers from scratch. With a well-curated Content Library, 40-80% auto-response is realistic. 30-40% of content exists but needs editing. 20-30% needs to be brand new.

If your auto-respond is hovering below 40-50%, that’s a good sign you’re in need of a content audit. If this sounds like you, check out our guide on how to conduct a content audit in 3 steps.

4-Step RFP Content Audit

Future impact

There’s more to discover after delivering a project. Before you even know if you won or lost, you can start mitigating future risk based on what you learned during this project.

How long did it take (longer/shorter than average)? How many deadlines were missed? How much content was re-used? How much content was missing? Set up a feedback mechanism to share these findings with content owners and SMEs so you can continue to improve knowledge management and the response process.

Time matters

Our success metric is not to have users spend more time in our platform. This is not social media. We want users to be able to work responses faster and more effectively than they’ve ever thought possible. Which brings me to the last RFP metric I want to mention here: how well you’re using your team’s time.

Generate an Application Usage Report to gain insight into which modules (Project, Content Library, etc.) your users spent their time. Compare that time spent against past similar projects. Did you save the team time? Did it take longer than average? From here, you can dig into why and start minimizing risk for the next proposal.

Gain insight into which modules your users spend their time
Schedule a demo today to see how to use some of the RFP metrics mentioned in this article to improve proposal management.

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