How Do You Measure Proposal Success?
December 12th, 2006
Revenue comes from securing contracts, which makes winning bids a leading indicator of business health. That’s why we measure proposal success in the first place.
Typically proposal success is measured as new sales, revenue growth, etc. If we’re in sales management, we’ll also track closing ratio, win rate, or whatever we’re calling the percentage of wins to bids submitted.
More visibility into business health is always better than less.
So, it’s the win rate (my preferred term for closing ratio) that we want to take a closer look at.
The Number Win Rate
First, there’s the win rate based on the percentage of wins to bids submitted. It shows success based on number of bids.
This is great for bragging rights, which can help increase, or maintain funding to your sales group. Let’s face it, we get far more credibility for sales efforts when we can claim “$78 million secured @ 73% win rate” (shameless plug: this is my technical proposal writing success rate for clients).
The Dollar Win Rate
However, there’s a second win rate. This one’s based on the percentage of dollars secured compared to total dollars bid. My dollar win rate for clients is 59%, which means of all the dollars my clients bid, only 59 out of 100 were secured.
Sounds less impressive than winning 73 out of a 100 times (my number win rate), doesn’t it?
The dollar win rate only comes into play if your customers award less than the full amount bid - but this happens frequently in large bids.
How Do You Measure Proposal Success?
Are there better measurements out there? Tell me how you measure proposal success, post your comments and feedback here.
How Do You Measure Up to Your Peers?
We’re developing a contractors’ group to benchmark proposal success to peers in their same industry.
Names of peer companies and specific customers’ names are blinded. You won’t see other firms’ names and they won’t see yours. Come on, who would participate if that info was shared?
If you’d like to participate in this benchmarking project send an email to info@serviceperformance.com
Entry Filed under: Proposals & Presentations
2 Comments Add your own
1.
Taylor Bruce | December 14th, 2006 at 6:57 am
Proposal to Closing ratio is very important in judging your company performance as well as comparing Salesmen. There are factors that affect the ratios, such as multi-site bids, reverse auctions, etc. but the ratio is still avauable tool. It is especially useful if you use it year after year to spot trends.
Chris the article was very good and I would be glad to supply data from our company for your survey and comparasions.
2.
revenue-iq | December 14th, 2006 at 8:56 am
Taylor –> great insight into the factors affecting the ratio, specifically the online-reverse auctions.
For benchmarking purposes would want to identify proposals by those factors. Wouldn’t want to compare high #s of reverse auction proposals to traditional RFP bids.
Any other factors worth considering along with reverse auctions and multi-site bids?
Reverse Auctions. In the last several years customers have begun to get more familiar with the good and bad of reverse auctions. Do you see a trend towards more customers using reverse auctions? Less, or about the same?
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