In a recent study involving 500 companies, nearly half of marketing and sales leaders said that responding to Requests for Proposals (RFPs) takes time away from more important activities.
Yes, RFPs are time-consuming. However, research from the RFP Response Management Benchmarks & 2020 Trends report shows that RFPs account for up to 41% of total sales revenue. They also impact customer retention, which makes up 39% of RFP-sourced revenue.
Also, RFPs aren’t going away any time soon: 63% of survey respondents expect to answer more RFPs this year than last year.
Rather than avoiding them, marketing and sales teams should embrace RFPs and view them as jet fuel for revenue growth.
Here are four research-backed ways organizations can speed up their RFP process and ultimately win more revenue.
1. Designate A Single RFP Owner
Organizations with a dedicated owner of the proposal process generally submit more RFPs and have a more optimistic mindset. Research shows that organizations with a dedicated proposal individual or team are 9% more likely to feel their process is efficient, 5% more likely to complete more RFPs, and 8% more likely to be “very satisfied” with the quality of their RFPs.
A much-asked question is who should own the process? Many RFP processes are either owned by a dedicated proposal team or by an individual (45%). If there’s no dedicated role in your organization, sales teams are a natural fit. Next to proposal managers, they are the second-largest group of owners, with 17% of sales respondents reporting responsibility for managing RFPs. Marketing teams make up a significantly smaller percentage of owners at 2%.
While sales ownership makes sense for some organizations, there can be drawbacks. Sales teams tend to track RFP metrics less consistently. Plus, they spend less than five hours writing answers on average, which research shows is not conducive to achieving a high win rate.
Since sales team members are often the recipients of RFPs, their organization must provide a system to help efficiently handle the process by:
- Establishing a way to manage the intake (your CRM may be the best option);
- Create a clear process for deciding which bids to take on, based on the likelihood of winning; and
- Providing a single system for tracking the progress of RFP projects.
2. Invest In Tools
The right tools can significantly improve and speed up the response process. Tapping into technology is an efficient way to improve submission rates without needing to increase headcount.
The study found those who use RFP software respond to an average of 152 RFPs annually, while those without responding to only 103. They also indicated that they’re more likely to increase the number of responses they submit next year, in comparison to those without a dedicated platform.
Only 18% of sales teams use RFP software—and 27% state that they don’t need one. For those who don’t use an RFP response solution, their reasons were lack of budget or a belief that their current tools work adequately.
While these are fair objections, it’s worth noting that RFP technology can also encourage better collaboration between teams. Since working with internal subject matter experts on RFPs was called out as a top pain-point among most organizations, it is a problem worth solving.
3. Measure What Matters
There is a positive relationship between tracking revenue metrics and the percentage of RFPs won. Over half of those who consistently track RFP revenue have win rates of nearly 70%. Meanwhile, over a third of those who don't track RFP revenue have win rates of just 40%.
However, if you’re only tracking RFP revenue, you are likely shortchanging your process. Less than one-third of survey respondents track baseline metrics, such as the number of submissions made, response timelines and employee sentiment—all of which correlate with better outcomes.
To improve RFP performance, companies should take a deeper look at:
- Win rates and revenue influenced or sourced from RFPs;
- Submission rates;
- The time required to complete an RFP; and
- Employee satisfaction.
This will help pinpoint which factors impact success; submission rates, short deadlines, or employee morale.
4. Spend Time Writing Quality Answers
Marketing is often needed to finesse messaging in the RFP submission process. And research shows the more time you spent writing, the better your chance of winning bids.
Companies with 80-99% win rates are 6% more likely to spend 61 or more hours, on average, writing RFPs. Groups that have a higher percentage of RFP revenue are also 7% more likely to spend at least 41 hours per RFP.
Providing more time for writing may mean that companies need to find efficiencies elsewhere in their process. One of the best ways to do this is by building a library of pre-written content that can be easily searched. This will help your teams easily find quality answers, which can be reused again and again.
The right tools, people and processes in place will help your team more effectively handle RFPs and, ultimately, win more bids.
Learn what other RFP obstacles most companies experience, and pick up top tips to overcome them, by downloading the full free report.
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.