2022 RFP Trends & Benchmarks
Chapter 2: Downturn of Win Rates & Revenue
RFP revenue and win rates dropped this year. But trends indicate this is due to more teams accurately tracking performance.
Companies are winning fewer RFPs than in prior years—mirroring the slight decline in participation rate. This could be a sign of the industry becoming more competitive, as proposal teams have also increased their use of dedicated tools (like RFP or RFI software) over the past three years. But performance and metric tracking has also improved, so it’s likely that RFP win/loss analysis is actually becoming more accurate.
Looking at the breakdown for this year’s win rates, far fewer respondents fall into the category of saying they win an excess of 80% of their RFPs. This year, 7% claimed that—down from 13% last year.
This trend, coupled with the fact that 92% of RFP teams are regularly tracking metrics, indicates that company win rates are likely becoming more accurate. (Learn more about this trend by downloading the full Trends & Benchmarks report.)
What’s a Top Performer?
Companies that win 51% or more of their RFPs.
This year, 41% of respondents fell into our “Top Performer” cohort, judged as those that win 51% or more of their RFPs. This ratio was the same last year.
Overall RFP Revenue is Down
Companies sourced one-third of their revenue from RFPs this year, which continues a moderate downward decline since 2019. However, this may be due to delayed economic activity from 2020, and it may not take into account those deals with longer sales cycles.
Associates and Executives Disagree on Why They Lose
When asked why they lost RFPs, the top reason this year was “Lost to a competitor.” Price as a reason has dropped, while product fit has increased.
What to make of all this? RFP responders are growing more advanced. They’re less likely to always be blaming price, which is often treated as a catchall for “We’re not actually sure.” The rise of sales win/loss analysis tools may also be helping (like Clozd and Klue).
If we look at responses by role, there is some disagreement between executives and associates. Executives are likely to say the issue is with the product, whereas associates say it’s price. If you ask an RFP manager, they’re most likely to say the issue is product (66%).
Interestingly, there’s also variation between roles. 15% of RFPs led by sales were lost because they missed a deadline, as opposed to 0% led by an RFP manager.
Small & Midsize Companies Struggle with Advancement Gap
Advancement rates are somewhat rosier than win rates. On average, 53% of companies advanced to the next stage, but that varies quite a bit by company size. Generally, the larger the company, the more likely they are to have both a higher win and advancement rate.
Small & Midsize companies appear to invest the most time into RFPs that they don’t win. They have the largest gap between advancement and winning—48% advancement versus a 38% win rate. It’s probably no coincidence that they’re also less likely to have a go/no-go process and three times less likely than Enterprise companies to be tracking metrics.
Americas Sales Programs Leader
Advertising, Media, and Telecom Drive the Most RFP Revenue
The percentage of revenue sourced varies a lot by industry. Advertising, Media, and Telecom derive nearly half its revenue from RFPs (46% to be exact). This is impressive, given that they respond to the fewest RFPs of any industry—but it also may be evidence that focusing more attention on fewer proposals can lead to more revenue.
Manufacturing derives the second-highest percentage of revenue (40%), and Software derives the lowest percentage (28%).
Key Takeaways: How to Manage Declining Win Rates
Looking at research over the past three years shows that win rates are steadily declining for RFP teams. While it seems that this decline is due to proposal teams tracking them more accurately—and introducing a broader variety of metrics overall—you’ll still want to make a plan for your team to succeed in this changing climate for 2022.
Here’s how to respond like a top performer in the face of declining win rates:
Conduct more competitive research: “Losing to a competitor / incumbent” rose to the number one reason for losing an RFP this year. Consider refreshing or launching a competitive insights program, and updating your stored RFP answers accordingly.
Track a blend of process and revenue metrics: A combination of RFP metrics provides the most balanced view of changes you should make to win more in your proposal process. Revenue metrics could be overall $ sourced from RFPs, while process metrics may focus on timelines. Understanding where your team lies with both is critical for success, so you can set-up the systems your team needs to succeed.
Download The Full Report
Get more best practices and trends to guide your team in 2022.