How Enterprises Can Increase Proposal Win Rates (New RFP Statistics)
The latest RFP statistics are in, and perhaps unsurprisingly, it was found that enterprise-sized companies (those with 5,000+ employees) respond to a huge volume of proposals annually. According to Loopio’s 2021 RFP Response Trends & Benchmarks Report, they complete an average of 266 RFPs per year.
The report, which collected data from 650+ teams across North America, also found that companies that submit higher volumes of RFPs often have better win rates. However, year-over-year trends showed a 6% drop in win rates between 2019 and 2020—in spite of overall average submission rates and RFP team resources staying roughly the same.
So, how can enterprises continue to submit a high volume of RFP while trying to make up ground on lost revenue in 2021?
In this article, we’ll share data-driven benchmarks enterprise proposal teams can use to overcome response process challenges and improve their RFP win rates.
Table of Contents:
- Why High Volume Pays off for Enterprises
- Common Enterprise Challenges (& How to Address Them)
- How Writing Times Impacts Enterprise Win Rates
- Enterprise Team Size Impacts Satisfaction & Stress
- RFP Success Metrics: Thinking Beyond Win Rates
- Enterprise Teams Prioritize Training & Tech Investments
Enterprises Submit 266 RFPs Every Year—But They’re Surprisingly Selective
Enterprises may complete more RFP responses than smaller companies, but they’re often more selective about which ones they allocate resources to. Enterprise companies respond to 35%–50% of the RFPs they receive—which is low in comparison to the average company’s response rate of 65%.
In order to select which bids to pursue, most enterprises use a strategic framework called a “go/no-go process” that helps predict their likelihood of winning.
Go/no-go framework assesses an RFP based on key factors, including:
- Client relationship: Does your company have a prior relationship with the potential client? If so, is the relationship a good one?
- Project insights: Is your company capable of doing a great job if you win the bid?
- Team availability: Does your company have the resources to complete the work if you win the bid?
- Timeline: does timing for this project fit with your team’s usual turnaround for bids?
- Competition: When evaluating this RFP, do you see any specific features that you or your competitors are known for?
- Opportunity value: What is this contract worth? How does that compare to the resources you’ll need to spend to submit this RFP response?
Looking for a go/no-go decision template for RFPs? Download Loopio’s free framework.
This increased scrutiny on incoming bids helps enterprises have an average win rate of 49%—likely because they aren’t spreading themselves too thin answering low-fit proposals. (Average win rates for smaller companies range between 45-47%.)
While it may sound like enterprise companies have an advantage when it comes to submitting and winning a large volume of bids, they face unique challenges smaller companies don’t.
Common RFP Challenges for Enterprise Companies (and How to Address Them)
Larger organizations tend to face three unique challenges in the response process much more frequently than smaller companies: losing bids based on price, bandwidth for RFPs, and version control issues.
1. Enterprises Lose On Price More Than Average
Large companies tend to lose bids more frequently on pricing in comparison to smaller businesses.
This is why it’s crucial for win/loss insights to be shared widely across larger organizations—otherwise, customer concerns may not be addressed.
It’s worth noting that teams may choose ‘pricing’ as a reason for loss when they aren’t sure of the real outcome. A simple way to combat this is to send a short follow-up survey to the client after each bid to consistently gather intel. Then, make that survey available to your whole team through your Customer Relationship Management (CRM) tool or Google Drive.
To gain a better understanding of why your company lost a bid, ask questions like:
- What strengths of our RFP response influenced your likelihood to choose us?
- What weaknesses of our RFP response influenced your decision not to choose us?
- Did our RFP response influence your decision? Or was there another factor?
2. Enterprise Companies Struggle with Bandwidth
Enterprises are more likely to struggle with bandwidth for handling RFP volume (34% identified this as an obstacle).
Akshat Srivastava, founder of Sales Engineers of New York (SENY), recommends building a central RFP library that the whole team can access.
With a self-serve RFP answer library, more non-proposal team members can tackle creating first drafts—and reduce volume based bottlenecks.
3. Larger Teams Create More Version Control Issues
26% of enterprises surveyed also cited version control as a large problem faced by their team.
Julie McCoy, director of global proposal management at DocuSign, recommends creating a dedicated Slack channel for RFP updates to triage version control. “We use it to collaborate with our solution engineers. They’ll inform us in this Slack channel if something [an RFP answer] is outdated so we can update it in our centralized RFP tool.”
Basically, having collaborative systems makes it easier to maintain accurate RFP responses.
How More Writing Time Impacts Enterprise RFP Win Rates
Something that seems remains true about the RFP process: you get out what you put in.
One of the reasons enterprises seem to achieve high win rates is because they spend more time writing RFP responses. They spend an average of 27 hours on each RFP, in comparison to 25 hours spent by mid-market companies and 19 from SMBs.
Since enterprises work on such a large number of responses (266 annually), an additional 2 hours per RFP really adds up. On average, enterprise companies spend 532 more hours writing RFP responses every year than their smaller counterparts.
And research shows that top performers (those who win more than 51% of bids) also spend more hours than their peers on the response writing process. This is likely because spending more time writing customized, well-thought-out answers improves the odds of winning.
While the additional writing time certainly helps, so does finding efficiencies in the RFP process. In fact, 66% of enterprise companies say they’re using RFP response software to save time and improve their productivity. Which makes sense, considering teams surveyed say the top benefits of using RFP software include:
- Content storage improvements (65%)
- Time savings (63%)
- Automation of manual tasks (53%)
But scaling writing efforts through tools isn’t the only factor enterprises should consider. Understanding the people behind your projects also impacts your RFP win rate…
RFP Process Insights to Improve Team Collaboration
Enterprise companies come with some sizeable RFP teams: they have an average team of 12 people, versus eight for mid-market companies and four for SMBs.
The stats also show that larger teams tend to involve more people (and cross-functional expertise) in their process. However, there are some other factors that impact how well enterprise teams collaborate and perform.
1. RFP Ownership Mixed Between Sales and Proposal Teams
Research shows that internal satisfaction with the RFP response process is highest when it’s owned by a dedicated proposal team. But enterprise teams are more likely to assign mixed-ownership (between sales and proposal teams) for the RFP response process.
To make sure your process stays efficient for both proposal and sales team members, enterprises should have a dedicated proposal person (or team) lead the process—but enable sales to self-serve through a curated RFP content library. This will help your proposal lead scale efforts, while ensuring accuracy across the team’s responses.
2. Teams That Use Software Report Being Less Stressed
Larger teams report being less stressed than smaller RFP response teams. This is likely because enterprises have more team members and internal experts supporting the RFP process.
However, larger teams are more likely to use RFP response software than smaller teams—and research shows that using software correlates with reduced stress levels. This is likely because software frees up time for RFP teams by automating repetitive tasks and making answers easier to find.
Software also makes it easier to gain visibility into the response process, which can help when teams understand where their process may need improvement. Which brings us to our next insight…
RFP Success Metrics: Enterprises Need to Think Beyond Win Rates
You can’t change what you don’t measure. And research shows, enterprise organizations are more likely to track a wider array of success metrics than smaller companies. Better tracking helps large teams understand what’s going well and what needs improvement, so they can improve win rates long term.
Out of the metrics tracked by RFP teams below, here’s what enterprises track most often:
- New RFP revenue
- Number of bids won (otherwise known as win rate)
- Customer revenue retained through RFPs
While it’s great that enterprise teams track a variety of success metrics, there is room for improvement by focusing on more qualitative metrics, like team satisfaction.
Our RFP management trends report revealed that top performers (with a win rate of 51% or higher) are slightly more likely to be tracking non-revenue metrics, such as team sentiment, employee performance, and response speed. And it makes sense that measuring process-focused metrics leads to better outcomes, considering how research shows that team satisfaction strongly correlates with higher response rates.
Once your organizations knows where they need to improve, you can decide where to best invest your resources.
Enterprise RFP Teams Prioritize Team Training & Technology Investments for 2021
Throughout the pandemic, enterprise companies were the most likely to maintain steady submission levels. They also say they’re likely to invest in more team training and new technology this year (in last year’s report, they were more focused on hiring staff).
If you’re looking for proposal team training opportunities, check out the resources below. Consider training focused on response process improvements that will benefit the whole team, including:
- RFP Academy: Designing Your Ideal Response Process: A free online course that offers a step-by-step overhaul of your existing RFP response process.
- Winning on Value: Four Steps to Creating a Compelling Value Prop: An online course from the Association of Proposal Management Professionals (APMP).
- The Art of Winning Requests for Proposals (RFPs): This Udemy course teaches you how to improve your chances of winning competitive RFPs. You’ll walk away with a clearer understanding of a client’s decision-making process, as well as a map and navigation tools for winning RFPs.
Those considering investing in RFP automation tools should make system usability and integration key evaluation areas. An easy-to-learn platform that can be integrated into existing workflows will be the easiest for large teams to use.
Get Loopio Updates.