Most of the organizations I talk with and work with have a RFP win rate of no more than 30%. That means that for every three RFPs they respond to, they only win one of them. Sounds familiar? And we all know how much effort goes into the submission of a RFP response.
Here are three reasons why your RFP win rates are so low:
- You respond to too many RFPs. You have no way of identifying a good opportunity vs. a bad one, so you respond to everything. I recently worked with a client to reverse this problem and the results were immediate – higher win rate, higher revenues. All because they focused on those opportunities they had the best chance of winning and that afforded the largest growth opportunities.
- Too many people touch the RFP response. If you mapped out all the people that contributed to the submission of a RFP response, I bet it would look like a spider’s web. There’s no way all of those people are adding value and enhancing the response. I helped a client look at their RFP response process and helped them realize that, on average, 25 people touched a RFP response. I also helped them realize less than half of those were adding any value. Submission effort went down and win rate went up after implementing some changes around this.
- You don’t know what the customer really needs. Many organizations read the RFP document and respond to what is asked for. Don’t let the potential customer define your solution. You are the expert. You have done this before. Ask a lot of questions. Set up a meeting to find out their objectives. This can be extremely effective when done before the RFP ever comes out. I have helped a few clients be more proactive in this area and not only did they win more RFPs, but those RFPs were bigger than originally planned because my clients engaged in a discussion with the customer around THEIR objectives. Thus, they were able to offer better solutions than what the customer had originally envisioned.
Increasing your RFP win rate requires a different mindset and approach to what you have done before. In my first meeting with one client I told them that if they wanted to win more RFPs, they had to respond to fewer of them. I thought the executive was going to kick me out of the office. 12 months later, they had doubled their win rate and grown revenue by more than 10%. That is the reason why this is so important!
On November 27, I will be hosting a teleconference to help organizations achieve dramatic results through their operational excellence functions.
Whether you already have an operational excellence department and want to maximize its’ value, or you are considering starting one and want to do it right, this teleconference is for you.
Click here for more details and to register.
There are more than 26,000 companies in North America with 500 or more employees. Any company who serves other businesses and says they are running out of prospective customers is missing huge opportunities.
Almost every company I talk with has created, or is creating, an operational excellence department. This makes me very happy. I love operational excellence and the fact that companies are embracing it’s new meaning.
What concerns me is that many of these companies are not going to maximize their results from these departments. Operational excellence is not just about improving processes or eliminating non-value added activities. It’s about identifying what outcomes you want to achieve and then figuring out the fastest and most effective way to achieve them.
The most effective operational excellence functions need to have these four components:
- An ability to help the organization prioritize. This might mean prioritizing strategic initiatives, projects, or even ideas. Most organizations have too many priorities and then wonder why they are not able to move forward on them. Operational excellence functions need to help the organization focus on those ideas, strategies, and initiatives that will help it move closer to its ideal future state.
- An ability to identify leverage points. Think of process re-engineering on steroids. A great operational excellence department will identify ways to leverage each step of a process so that things are not just being put together, but are being enhanced every step of the way.
- An ability to make the intrinsic extrinsic. Identifying what is working well internally and then replicating that across an organization is a skill most organizations lack. Finding and replicating best practices is one of the quickest and easiest ways to improve overall organizational performance. Your operational excellence function needs to help make that happen.
- An ability to identify areas for operational transparency. Every inquiry a customer makes is failure work. A strong operational excellence function will help the organization find ways to increase operational transparency with customers, thus reducing the time and effort spent on answering basic questions and inquiries.
I was speaking with an executive last week and he told me his company reduced costs by more than $500,000 when they realized the majority of customer questions were related to when customers were going to receive their order. By giving the customers access to the order flow online, all of those inquiries went away.
Is your operational excellence department finding those kinds of opportunities?
If not, then it is failing you.
I have developed a program for those who want to learn how to be an operational excellence consultant.
If you are interested in learning how to better service clients and make more money, click here.