In most industries, buyers who issue RFPs don’t select vendors based solely on the proposals they submit. More often, the typical RFP process involves two steps. In the first step, the buyer evaluates the proposals that are submitted by each vendor. Based on this evaluation, along with their previous experience working with the seller, the buyer then selects the two or three vendors they most prefer. The sellers who are selected are then invited onsite to deliver a presentation to the people who will be making the ultimate buying decision.
Among people who respond to RFPs, this is often called “making it to the short list.”
Understanding this process is important. It means your overall success is not based solely on the quality or content of your proposal, it’s also based in part on your ability to effectively present your solution in person.
I was contacted one day by a customer who wanted to arrange proposal training for her staff. Their gross win ratio, she explained, was far below what they thought it should have been. As we spent more time talking about their proposals and proposal process, however, it became clear that the problem was not their proposals. In fact, in the large majority of cases, the proposals they wrote resulted in them making it to the short list. The problem was they weren’t effective at presenting their solution onsite. Said another way, they didn’t need proposal training, they needed presentation skills training.
This story illustrates the importance of measuring your proposal effectiveness at a more granular level than what can be done with the gross win ratio alone. By measuring performance at each stage of the process, you gain a more precise understanding of what you’re doing well and what you might need to improve. This is precisely what the Short List Win Ratio and the Presentation Win Ratio are designed to capture.
Calculating ratios to gain insight
The short list ratio is calculated by dividing the number of times you make it to the short list divided by how many proposals you submit in response to RFPs. For example, if you submit 100 proposals, and you advance to the short list seventy-five times, then you divide seventy-five by 100 to come up with a Short List Win Ratio of 75%.
The Presentation Win Ratio is calculated by dividing the number of opportunities you win by the number of times you make it to the short list. For example, if you win twenty-five opportunities, and you made it to the short list fifty times, then you divide twenty-five by fifty to come up with a Presentation Win Ratio of 50%.
In contrast to the Gross Win Ratio which only gives us a very high-level view of the effectiveness of our proposal efforts, calculating the Short List Win Ratio and the Presentation Win Ratio gives us a much more precise understanding of what’s working and what isn’t.
David Seibert is a professional salesperson and consultant for businesses that respond to formal procurements in non-federal markets. Dave publishes a comprehensive curriculum of online, self-paced proposal training classes, delivers onsite and online proposal training programs for dedicated proposal teams, and provides proposal and business development consulting services for businesses that want to improve their win rates.
Dave is founder and president of The Seibert Group, a proposal consulting and training organization serving businesses that sell to other businesses, A/E/C firms, schools, and to state and local governments. Dave authored the popular proposal book, Proposal Best Practices, is active with the Association of Proposal Management Professionals (APMP), and is a member of the APMP Speakers Bureau. You can contact Dave at [email protected].