Content area
Full Text
Providers must get there first, pick the right battles and play to win if they expect to secure corporate business.
Is a low request for proposal (RFP) win-rate draining hours and revenues from your firm? Studies show that responding to an RFP can consume 40 to 100 man-hours, and on larger projects, balloon to hundreds of hours. This evolves into an expensive investment when you multiply those figures by compensation and overhead.
As more and more firms hold service providers accountable for their cost of business development (when calculating usage and revenue production), the need to improve RFP win-rates increases, particularly for public companies. Climb your way to the top by following these four tactics:
1. Get there first.
2. Pick the right battles.
3. Understand the RFP decision process.
4. Align your tactics to survive each phase of the competitive process.
1. Get There First
Pursuing new business exclusively in the "visible" market - where companies actively and openly look for service providers - is a dead-end strategy. The best way to win is to become the sole or preferred provider, which happens only by engaging clients before they seek service providers when the project is invisible to your competition.
By the time companies enter your field of vision - asking for proposals, statements of qualifications or price quotes - they're already at the end of a long decision process. They've identified and assessed a problem, and built internal consensus around a solution.
In most cases, they have a preferred service provider that began supporting them before the project became "visible" and is likely to win the business. The deck's stacked against you if you're not that provider.
So where should you put your business development efforts? Clearly, you want to become the preferred or sole source provider because that privileged position means higher margins, higher win-rates, and more committed and supportive clients. To do this, engage clients in the invisible market and establish your value before they start comparing service providers.
2. Pick the Right Battles
Many providers feel they have no choice but to respond to RFPs. They say, "We have to respond or it'd send the wrong message to the market" or, "You have to kiss the frog a...