The verdict is in: Writing fewer proposals typically increases both your win rate and your sales. That, at least, is the consensus of the many sales and proposal experts I "surveyed" via a Google search. That has also been my experience over the last 25 years working with a variety of engineering, environmental, and architectural firms.
But many firm
principals aren't buying it. Not in practice, at least. They find it
hard to "miss opportunities" by being more selective in the proposals
they submit. Several have explained to me that while that maxim may work
for most, it doesn't apply to their firm, office, or market sector.
They fear dire consequences if they reduced the number of proposals.
Inevitably, these "volume sellers" have a low win rate. Their business development costs
are often inordinately high, and their profits are usually lower. It's
not uncommon for volume sellers to pursue a higher percentage of
price-driven selections, which would seem to substantiate their
conviction that more proposals equals more sales.
They may be
right, but I doubt it. For one thing, that approach to developing new
business inherently erodes the perceived value of their services. My
take after watching business development trends for decades is that
indiscriminate selling reinforces indiscriminate buying (e.g., selecting
on the basis of low price). When you shortchange the sales process by
simply responding to RFPs, you shortchange the opportunity to establish
your value proposition.
Still not convinced? I offer the following additional reasons why you should be writing fewer proposals:
Proposals are costly, but the greatest cost is opportunity cost. Proposals
constitute roughly half of the typical A/E firm's BD budget. But for
many firms, the budget share is still higher. And as proposal costs
increase, there is usually a corresponding drop in ROI (i.e., win rate).
That's because the larger expenditure is rarely an investment in better
proposals, but in more proposals.
typical for volume sellers to spend about 70% of their proposal budget
on writing losing proposals. But that's not the worst of it. The greater
cost is that those hours could have been diverted to higher-value BD
activities, such as positioning their firm for success in advance of the
RFP. I remain convinced that the vast majority of awards go to the
firms that invest substantially in the pre-RFP sales process.
You need to invest more in your best proposal opportunities. What
about the argument that
most of the cost is borne by overhead staff who you have to pay for
anyway? You still suffer opportunity costs because they could have spent
more time on more promising proposal efforts (not to mention marketing,
which is frequently neglected in A/E firms). Plus, if most of your
proposal labor cost comes from marketing staff, I would question your
commitment to producing winning proposals.
hundreds of proposals, I've observed that most fail in the area of
technical content. Rarely do they reflect the firm's true expertise and
insights. Why? Because the technical experts invested too little of
their time in the proposal effort. Yes, I understand the demands on
their time. Which is all the more reason why they shouldn't be wasting
time on proposals that have little chance of success.
You shouldn't be using proposals to introduce (or reintroduce) your firm to the client. I advocate a "no know, no go"
policy. In other words, if you weren't talking to the client before the
RFP was released, you shouldn't be submitting a proposal. There are
exceptions, of course, but I consider them rare. I addressed this issue
in a previous post,
but I'll recount two reasons that stand out: (1) if you don't know the
client, you're usually going to lose to someone who does and (2) if you
haven't been gathering insight into the client's issues, you're not
going to be able to write a strong proposal. That means a mediocre first
impression—another opportunity cost.
the volume strategy usually ends up diluting your value and wasting a
substantial portion of your BD budget. Yes, it can be a step of faith to
say no more often and trust that less is more. But you can take courage from the fact that the best firms have already taken that step.