Request for Proposals (RFPs) offer a valuable opportunity for small companies: they’re a level playing field to prove value against competitors, win business and dramatically boost revenue. That is, if you can respond with compelling content that knocks out the competition.
According to Loopio’s RFP Management Benchmarks & 2020 Trends Report—which surveyed 500 individuals involved in the RFP process across 14 industries—the majority of small businesses (64%) are responding to less than 10% of the RFPs they receive. And, they are only winning 44% of the RFPs they bid on, which is low, in comparison to the average company win rate of 53% for companies that are larger in size.
So, what’s holding small businesses back from improving RFP responses? In this post, learn four researched-backed insights that will help your small business increase RFP quality and win rates.
Assign a Process Owner
Research reveals that 52% of small businesses do not have a dedicated owner for their RFP processes—which can be a significant roadblock to completing RFPs.
Organizations without a designated owner are 30% more likely to complete less than 10 RFPs per year. In comparison, organizations with a dedicated proposal manager or team respond to 174 RFPs per year on average—the highest of any other ownership style. Plus, teams with a dedicated RFP individual or team are 8% more likely to be ‘Very Satisfied’ with the quality of their submission. They’re also 5% more likely to complete more RFPs than those without a dedicated team or individual.
Although small companies are less likely to employ a full-time proposal manager, steering away from ad-hoc ownership, and identifying an RFP lead individual or team will help improve win rates.
Relentlessly Track RFP Submission Rates, Timelines and Revenue
There is a positive relationship between tracking revenue metrics and the percentage of RFPs won—68% of those who win 70% or more of the RFPs they bid on track overall revenue, compared to 36% of those who win less than 40% of their bids.
In general, companies tend to track RFP revenue. But analyzing additional baseline metrics—such as response timelines, submission rates or employee sentiment—is also correlated with higher win rates.
Research has also shown that smaller businesses are 13% more likely to have an ad-hoc process for RFPs. Through monitoring these four key data points, teams can be provided with some much-needed oversight into how they are performing in regard to achieving their RFP goals.
Respond to More RFPs With The Right Tools
The average company responds to 147 RFPs per year, and small businesses are significantly below this benchmark, at an average of 52 submissions annually.
An investment in dedicated RFP software could help small companies boost volume: those with response software complete 152 RFPs annually, while those without respond to only 103. Those who use an RFP platform are also more likely to increase the number of responses they’ll submit next year. RFP software automates parts of the process and stores content from past responses, making it easy to access and leverage.
Interestingly, 33% of those surveyed feel that their team doesn’t have all the resources and tools they need to efficiently and effectively win more business. Investing in a dedicated response tool could give small businesses looking to scale their RFP process a competitive advantage.
Involve More Team Members
Small businesses can improve win rates by leveraging internal subject matter experts quickly and effectively. Our research found that involving more people in the process was tied to higher quality responses and win rates.
To involve the right people in the response process without slowing it down try:
- Having criteria that helps you quickly decide whether or not an RFP is worthy of responding to based on your chance of winning.
- Meet with team members before you start writing to seek their advice and get them bought into helping with the project.
- Track RFP progress using a project management tool or RFP software, so tagging people for questions and approvals is easy and direct, versus getting lost in emails.
On average, 37% of small business sales revenue is sourced from RFPs, so dedicating more time to having the right people improving proposal quality is worth the investment.
The Impact of Improved RFP Processes on Small Businesses
Finding time to respond to RFPs is one of the biggest roadblocks for small businesses: 50% of companies with less than 100 employees identify resources and time as their biggest challenge.
However, there are simple improvements that small businesses can make to win big with RFPs this year. Assigning a dedicated process owner, investing in RFP software, tracking metrics and increasing writing time can improve RFP response rates, quality and, ultimately, win rates.
Read the full RFP Response Management Benchmarks and 2020 Trends Report to learn how you can gain more efficiencies in your process.
Zak Hemraj is the CEO and co-founder of Loopio, a Toronto-based technology company that helps enterprises supercharge their responses to RFPs, DDQs and Security Questionnaires. With Loopio, companies can empower their teams to respond faster, improve response quality, and win more business. Loopio is one of Canada’s fastest-growing tech startups. It was ranked as the 13th fastest growing company on the 2019 Deloitte Technology Fast 50™ list and selected twice as one of LinkedIn’s Top Startups in Canada.