Eight Trends Shaping RFP Management in 2021
There’s a lot to be learned in a year of RFP management—especially after an unpredictable one like 2020. Fluctuations in proposal numbers, remote working challenges, and increased financial scrutiny made agility the theme of the year.
Looking ahead to 2021, we don’t have a crystal ball. But, we do have eight key trends that will shape the year ahead for RFP responders. They’re from Loopio’s second annual 2021 RFP Response Benchmarks & Trends Report, which analyzes data collected from 650+ RFP teams across North America, spanning 15+ industries.
In this blog, we’ll explain the trends, highlight what top performers do differently, and aim to answer the most important question: what strategies should your team adopt to get ahead in 2021?
Table of Contents:
1. RFP Revenue and Win Rates Drop Between 2020 and 2021
Organizations responded to an average of 150 RFP responses last year—which is slightly higher than 2019’s benchmark of 147 RFP responses annually. Despite the rise in volume (and number of collaborators per RFP), RFP-sourced revenue dropped 6% between 2020 and 2021.
Strategy Shift for 2021: With RFPs yielding less fruit from a revenue-perspective last year, teams should be increasingly critical of how they use resources. Increase efficiency by automating the tedious RFP tasks (like formatting, answering repeat questions) with the right tools so your team can spend more time on what matters: crafting quality answers. This will improve your odds of winning.
2. COVID-19 Makes Some Teams Timid With Targets
The number of teams planning to submit more RFPs in the coming year dropped by 16% in comparison to Loopio’s 2020 report—and 34% of teams forecasting a decrease attribute it to economic fallout from COVID-19.
Over the past year, industries have experienced mixed results with RFP volume: nearly a third saw decreases; roughly another third received more RFPs; the final third saw no significant changes overall. Software companies were the least likely to experience a change—while Financial, Legal & Media Services, as well as Manufacturing & Retail experienced a decrease in annual RFP submissions.
Strategy Shift for 2021: If you need to tackle an unexpected volume of RFPs in 2021 (but can’t get headcount), try building a scalable library of RFP content. Having a central location for accurate content that everyone can access is a game-changer. Take the initiative to organize, improve, or refresh your RFP answers to increase your odds of winning the proposals you do get.
3. Top Performers Prioritize People, Process & Proposal Quality
People, process, and proposal quality. Data shows these three P’s are what give the best RFP management teams an edge. Here’s what top performers (those who win more than 51% of their bids) do differently:
Profile of a Top Performer:
✓ Higher submission volume: Top teams submit 175 responses, compared to a 147 average.
✓ Involve more stakeholders: Top teams involve 10 stakeholders, compared to 9 on average.
✓ Spend more time writing: Top teams spend 25 hours writing each RFP, compared to the 23 hour industry average.
✓ Track metrics: 91% of top teams track RFP success metrics.
✓ Use response software: 69% of top teams use software to complete RFPs faster.
✓ Adopt a go/no-go decision: 72% of top teams use this RFP decision-making framework before they take on an RFP.
Overall, top performers participate in more RFPs annually and invest more time than average writing each RFP. But this doesn’t mean small teams should respond to every bid they receive. It’s about focusing on quality RFPs over quantity.
Strategy Shift for 2021: Before starting a proposal, teams should first determine if the customer is a fit and how likely they are to win. Download this free go/no-go decision template specifically designed for RFP teams.
4. More Collaborators, More Problems
Top challenges for RFP teams center around finding and storing accurate answers, as well as collaborating with internal Subject Matter Experts (SMEs). But collaboration challenges seem to have grown for many teams throughout 2020, possibly due to the increase of remote work. When asked how the RFP process could be improved, the top suggestion was requiring SMEs to respond to requests in a more timely fashion. (Ouch).
This challenge is likely on the rise due to the number of RFP contributors increasing this year: it went from 7 to 9 people per RFP between our 2020 and 2021 reports. Heightened scrutiny on sales opportunities and more companies shifting to a remote workplace could also be contributing to collaboration woes.
Strategy Shift for 2021: If organizations hope to improve their proposals and process, they need to focus on streamlining remote collaboration. Consider using more digital tools to help with communication challenges. Here’s how Julie McCoy, Director, Global Proposal Management at DocuSign keeps the lines of communication open across SMEs.
You can learn more about the top tools teams use in Section 5 of the 2021 RFP Response Trends & Benchmarks Report—which brings us to our next trend…
5. Response Software Boosts Efficiency
Research shows that using RFP response software gives response teams a significant edge in the response process. Teams with RFP response software are more likely than average to enjoy:
- Improved RFP content storage
- Time savings, thanks to the automation of manual tasks
- 10% higher RFP submission volume
- Higher satisfaction with proposal quality, response speed, and overall efficiency
- More manageable stress levels (which is also tied to higher win rates)
Teams that adopt response technology are also more likely to say they have the right resources to respond efficiently. They also receive consistent recognition for their work, which could be because they perform better in terms of RFP volume than their counterparts.
Strategy Shift for 2021: Proactively analyze your current process. Ask yourself, how many RFPs do you submit in a year? Is it more, or less than the average of 147 RFPs? If you want to submit more in 2021, consider how RFP technology can help you get there. (Check out these short videos to preview now.)
6. Morale Matters: Top Teams Track Stress Stats
In 2020, top teams focused on tracking RFP revenue stats. The most common metrics tracked by stats include:
- New RFP revenue
- Number of won bids
- Customer revenue retained through RFPs
- Number of bids submitted
Research shows that middle performers are most likely to consistently track revenue metrics (even more than top performers). But top performers are more likely to track non-revenue metrics, like response speed, performance, and team sentiment.
It seems that focusing on employee happiness and productivity can impact revenue-related outcomes. RFP management teams with more manageable stress levels respond to 5% more RFPs annually. They also have 10% higher win rates in comparison to teams with less manageable stress levels. Having the right owner, team size, tools, and metrics tracking is vital to reducing stress.
Three Factors Impacting RFP Team Stress Levels:
✓ Collaborators: Teams with lower stress levels often have more contributors helping on each RFP.
✓ Ownership: Less stressed teams are unlikely to have ad hoc ownership of the RFP process. Instead, they typically have a dedicated individual or team responsible for proposal management.
✓ Metrics tracking: Those who track more metrics are more likely to have lower stress levels. This insinuates that having clear measures of success reduces anxiety and makes priorities clearer to team members.
Strategy Shift for 2021: Focusing on metrics around people can give organizations a winning edge. If you don’t already, regularly track qualitative metrics, like team morale, individual capacity, and performance.
7. Resource Investments: Hiring Down, Training Up
The top resource investment areas for RFP response teams in 2021 are:
- Team training (34%)
- Investing in new technology (32%)
- Hiring more staff (30%)
Looking back at 2020, the priorities for investment were previously:
- Hiring more staff (40%),
- Adopting new technology (39%)
- More training for teams (39%)
This downward movement of hiring as a focus could be due to economic uncertainty hindering headcount plans. Interestingly, research shows only a fifth of teams lost resources due to the pandemic in 2020 (like budget or staff)—while another third actually gained resources in 2020.
Mid-Market and Enterprise organizations were more likely to invest in hiring more senior staff, as well as focusing on additional team training in comparison to small businesses. Enterprise organizations were more likely to invest in new technology. Overall, the investments slated for 2021 indicate RFP teams are still seen as an important revenue generator.
Strategy Shift for 2021: While more headcount may be off the table, look for ways to leverage tools and train your team on the ideal RFP response process to scale your efforts. This will help you handle unexpected changes in volume while maintaining proposal quality. You could also consider taking a free course, like RFP Academy, to help your team level up their process management and proposal writing skills.
8. Response Pro Recommendations for 2021: Focus on Improving Content
When asked what their company can do to better response management, 27% of RFP responders said: ‘Improve how we find and maintain our content.’
The popularity of this recommendation tells us many teams see improved RFP content as the key to success in 2021. And while there are many steps that can be taken to improve content, Samantha Enslen, President, Dragonfly Editorial, says it best.
Strategy for 2021: Quality writing is a commitment that pays off in the proposal world. (Research shows top teams spend an average of 25 hours writing each RFP.) But to write persuasive content, you need to do more than just copy and paste. Join a writing workshop to improve your proposals in 2021—or better yet, learn how to change the narrative of your proposals today, through this free messaging workshop.
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