How to Run an In-Depth Win/Loss Analysis for RFPs
If you’re like the average proposal team, you might submit around 162 RFP responses per year—that’s almost three a week. 🤯 With a new request always waiting around the corner, it’s no wonder you’re short on time to reflect on why you’re winning or losing.
But here’s the catch-22…
These insights are essential for running a successful RFP program. Only by intentionally tracking and analyzing bids can you better understand your customers (and precisely what they’re looking for), improve your RFP process, and ultimately, increase win rates.
In this article, you’ll learn how to conduct an in-depth win/loss analysis by following these steps.
What Exactly Is a Win/Loss Analysis for RFPs?
A win/loss analysis evaluates why you’re successfully closing deals involving RFPs (and what’s holding you back from winning even more). Instead of making a wild guess, it allows you to methodically gather insights from RFP metrics and valuable buyer feedback to help you make more informed go/no-go decisions and improve overall proposal performance.
Ready to face the facts? Download this win/loss analysis template to determine where your proposal team is doing well—and where you can improve. (Psst, you can successfully use this template by following the same steps below.)
3 Steps to Improve Proposals With Extensive Win/Loss Research
According to our research, the average RFP win rate is 44%. While most proposal teams win or lose half of their bids, pinpointing why can be a puzzle—if you don’t know where to look for the pieces. 🧩
Some say they lost because they were “no match for the incumbent.” Others credit the closed deal to an agreeable price.
…But the reasons are far more nuanced.
You could be wasting your time responding to RFPs that are not the right fit for your business. On the flip side, your highly personalized proposals could be the secret to your success—giving buyers the warm and fuzzy feeling that you just get them.
So, how can you solve this mystery? 🕵️ Follow the steps in this win/loss analysis.
Step 1: Track Your Success Throughout the RFP Process
Most proposal teams know how to calculate a win rate to measure RFP success. After all, this metric answers the #1 question: What percent of your RFP responses result in a win? But it doesn’t tell the whole story.
As it happens, two other metrics indicate whether your RFP process is a revenue-generating machine—or a rewards roadblock:
Participation Rate (a.k.a Submission Rate)
Your participation rate is the percentage of RFPs you respond to vs. received. This metric indicates whether your go/no-go decision criterion is on the right track—when you compare it to your win rate. For example, if you have a high participation rate but a low win rate, you may need to be more selective (responding to more RFPs isn’t always merrier).
Shortlist Rate (a.k.a Advancement Rate)
Your shortlist rate is the percentage of RFP responses you’ve submitted that the buyers have shortlisted. This metric reflects more accurately on RFP quality than the win rate alone. That’s because the buyer selected your company to move on to the next stage (typically a finalist presentation) simply by reading your proposal. A high shortlist rate is well-earned. 👏
Tracking this data over time and comparing it to industry benchmarks (in the table below) will help you identify where to make some RFP-altering improvements to win more.
| RFP Metric | The Global Average 🌎 | If Lower, You May Need To… |
|---|---|---|
| Participation Rate | 63% | Adjust your go/no-go criteria so it’s more flexible to meet revenue targets. |
| Shortlist Rate | 55% | Focus on crafting strong win themes and customizing answers to the buyer. |
| Win Rate | 44% | Align better with your sales team and rehearse your presentation more. |
Step 2: Calculate How Much You’re Making From RFPs
How much does it cost your organization to reply to an RFP? What’s your average return on investment (ROI)? These numbers are essential for your win/loss analysis because they help you plan a proposal budget and prioritize the most lucrative RFPs.
Here are three different scenarios you might face when looking at these values (and the decisions you can make):
👎 Worst case scenario: If you have a low cost per bid and low win rate, don’t feel defeated. Perhaps your team needs additional support to be successful. So, consider making a business case for more resources.
👌 Base case scenario: If you have a low ROI but a high win rate, you may want to make bidding worth it by putting your time and materials into high-value RFPs. You’ve proven that you got what it takes to win, so go after the big money. 💰
🤘 Best case scenario: If you have a high ROI and high win rate, you’ve hit the jackpot. It’s time to scale your resource-efficient RFP program and generate even more revenue.
Step 3: Identify Your Top Reasons for Winning (or Losing)
What’s the best way to learn why you won or lost a bid? The answer: Ask the prospect.
Only by going straight to the source through a feedback interview can you discover their reasons for choosing your organization or not. Otherwise, your win/loss review will merely be speculation.
Of course, soliciting this information is easier said than done—especially when reaching out to someone who sent you an RFP letter of rejection. Unlike new customers who are happy to sing your praises, prospects who passed might not be open to spending more time with their second or third choice.
However, as the saying goes, “It never hurts to ask” (so long as the procurement legislation allows you to do so). If you have the green light, here’s how to appropriately gather feedback from a prospect:
✓ Be prompt: Reach out to the prospect while your proposal is still fresh in their mind. The more time that passes after receiving the rejection letter, the less likely they will say yes to a feedback interview because they would have already moved on.
✓ Explain the reason: Everyone likes to feel heard. Let the prospect know you’ll use their insights to improve your RFP response process and provide a more tailored solution if the door reopens. They’ll appreciate (and remember) your strive for excellence.
✓ Come prepared with questions: A prospect who agrees to a feedback interview is sharing valuable time with you—don’t take it for granted. Show up with critical, open-ended questions that will help you get to the bottom of their decision.
✓ Show your appreciation: Always follow up the interview with a thoughtful thank-you email. A little appreciation goes a long way in showing prospects how well your company values its customers (even when they are not one yet).
Remember, you’ll need to hear from more than one prospect to determine why you tend to win or lose RFPs. You can sort through this qualitative data using a modified rainbow spreadsheet (a tool created by UX researchers) to track win/loss trends visually.
Steal These Questions for an Insightful Win/Loss Interview 📋
- What was your impression after reading our proposal?
- What did we do in the RFP process that you liked?
- How did you feel about our solution overall?
- At what point did you know we were (or weren’t) the right fit for you?
- Which alternative solution, if any, did you choose over ours?
- What was the biggest consideration for your decision?
- What’s one thing you’d advise us to change in our proposal?
💡 Pro tip: It’s also a good idea to ask your RFP team for feedback. They have a first-hand account of how the response process went and can offer valuable suggestions about what you can collectively do to increase that chance of winning next time.
Conducting a Win/Loss Review is Well Worth The Time In Your Proposal Process
If you’ve never conducted a win/loss analysis before, there’s truly no better time to start than now. It’s difficult to know where you have a competitive edge—and what’s holding you back—without having relevant, unbiased data to draw from.
Soon, you’ll have a better understanding of your ideal customer (and what they’re looking for in proposals), data-backed ways to increase your win rate, and an optimized response process.
FAQs
A win/loss analysis is a critical process for any organization to understand the factors contributing to their successes and failures in sales and business development. It provides valuable insights for your sales and marketing teams that can help improve strategies, products, and customer relationships.
Here’s what should be included in a comprehensive win/loss analysis:
Identification of Deals
Start by identifying the deals you want to analyze, including both won and lost opportunities. This could involve all sales or only specific segments, products, or services.
Data Collection
- Deal Information: Collect basic data on each deal, such as deal size, timeline, industry, and the sales rep involved.
- Customer Information: Gather information about the customer, their industry, size, and location.
- Decision-Maker Profiles: Understand who the key decision-makers were in the buying process.
Reason for Decision
- Why They Chose You (Wins): Determine the reasons you won opportunities. This could include specific features, pricing, support, or your company’s reputation.
- Why They Didn’t Choose You (Losses): Understand the reasons potential customers opted for a competitor or decided not to make a purchase. Common reasons for lost opportunities might include pricing, features, competitors, or product fit.
Competitor Analysis
- Identify the competitors you were up against.
- Assess why customers chose competitors over your offerings.
Sales Process Evaluation
- Analyze the effectiveness of your sales process.
- Identify any bottlenecks or inefficiencies in your sales funnel.
Customer Feedback
- Collect feedback from customers and prospects.
- Understand their experience dealing with your sales team, the product, or the service.
Product/Service Assessment
- Evaluate the performance and quality of your product or service.
- Identify any shortcomings or areas for improvement.
Market Trends
- Consider the broader market trends and how they might have influenced the decision.
- Analyze shifts in customer needs and industry dynamics.
Quantitative Analysis
- Use quantitative data to support your analysis, such as deal size, lead source, and sales cycle length.
- Identify patterns and correlations in the data.
Qualitative Analysis
- Conduct interviews with key stakeholders to gain deeper insights.
- Seek to understand the emotional and psychological factors that influenced the decision.
Feedback Consolidation
- Summarize the feedback and insights gathered in a clear, organized manner.
- Seek to understand the emotional and psychological factors that influenced the decision.
Recommendations
- Based on the analysis, provide recommendations for improving sales strategies, product development, customer engagement, or other areas.
- Identify opportunities for growth and strategies to mitigate weaknesses.
Action Plan
- Develop an action plan based on the recommendations.
- Assign responsibilities and set timelines for implementing changes.
Follow-Up
- Regularly review and update the win/loss analysis process to ensure continuous improvement.
By conducting a thorough win/loss analysis, sales teams can gain a deeper understanding of customer preferences, competitive dynamics, and areas for improvement, ultimately leading to better decision-making and more successful sales and business development efforts.
Running a successful win/loss analysis involves a structured and systematic approach to gathering and analyzing data. Here are the steps to conduct a win/loss analysis:
- Define your objectives: What specific insights or improvements are you hoping to gain from this process?
- Select the deals: You may choose to analyze all deals within a specific time frame or select specific segments, products, or services.
- Data collection: Use your CRM system and other relevant tools to gather this information.
- Identify key stakeholders: This includes decision-makers, influencers, sales reps, and members of your customer success team.
- Interviews or surveys: Gather information on why they chose your product or service (in the case of wins) or why they didn’t (in the case of losses).
- Competitor analysis: Try to understand why the customer chose a competitor over your offering.
- Sales process evaluation: Identify any bottlenecks or inefficiencies in your sales funnel.
- Customer feedback: Collect and analyze feedback from customers and prospects.
- Product/service assessment: Evaluate the performance and quality of your product or service. Identify any shortcomings or areas for improvement.
- Market trends and competitive landscape: Consider the broader market trends and competitive landscape that may have influenced the buyer’s decision.
- Quantitative analysis: Look at the deal size, lead source, sales cycle length, and other relevant metrics. Identify patterns and correlations in the data.
- Qualitative analysis: Look for any deeper insights into the emotional and psychological factors that influenced their decision.
- Feedback consolidation: Summarize and consolidate the feedback and insights gathered in a clear, organized manner.
- Recommendations: Based on the analysis, provide recommendations for improving sales strategies, product development, customer engagement, or other areas. Identify opportunities for growth and strategies to mitigate weaknesses.
- Action plan: Develop an action plan based on the recommendations.
- Share findings: Share the findings and insights with relevant teams within your organization, including sales, marketing, product development, and customer service.
- Implement changes: Execute the action plan and make the necessary changes to address the issues and opportunities identified during the analysis.
- Follow-up: Regularly review and update the win/loss analysis process to ensure continuous improvement.
It’s important to note that win/loss analyses should be an ongoing process, not a one-time event.
Regularly collecting and analyzing data on won and lost deals will help your sales and marketing team adapt to changing market conditions and customer preferences, ultimately leading to improved performance and higher win rates.
The ideal win/loss ratio will vary depending on your industry, specific market, the maturity of your business, and your strategic objectives.
There is no universally applicable win/loss ratio that can be considered ideal for all organizations. What’s considered a good ratio for one company might be inadequate or excellent for another.
Instead, you should aim to achieve a win/loss ratio that aligns with your business goals and the conditions of your market.