2022 RFP Trends & Benchmarks

Chapter 2: Downturn of Win Rates & Revenue

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.
Total Revenue sources from RFPs: 33% in 2021

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.
15% of sales-led RFPs lost because of missed deadline

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.

It’s also the case that being a larger company probably holds an inevitable advantage in deals—they’re known, have more offerings, and have more resources.

Want to learn more about advancement or win rates? Download the full trends report now.

“It is critical for you to look at advancement rates and win rates as parts of a single story if you want to identify the right actions to improve your success in the market.”
Trevor Evans,
Americas Sales Programs Leader
Qualtrics

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.

 

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