The overlooked reason why your probability of win (pwin) estimate is wrong

It would be really great to know if you're going to win a pursuit, or even just have a decent chance at it, before you put all that effort into it. We are driven to really want to quantify our chances of winning a pursuit. We want to make it a science. Really badly. There are several reasons why people need to estimate the probability of win (pwin). It helps to:

• Determine whether a lead is worth pursuing at all
• Figure out how much to budget on the pursuit
• Assign the right staff
• Have a better idea about the likeliness of future revenue

The problem is that even though we don’t like to admit it, nobody can predict the future. Most pwin estimates are rubbish. It’s bad enough that:

• Your quantified estimates are not based on anything quantified
• You don’t refine your pwin estimate based on real world outcomes
• The estimates you have aren’t statistically significant anyway

The real reason your pwin is a complete work of fiction

But the real reason your pwin estimate is inaccurate wrong is that it is disconnected from the proposal. There is no tangible connection between the factors you use to estimate pwin and what you do or say in your proposal. In other words, there is no connection between what you claim is your probability of winning and what you do to win. This alone makes your pwin a complete work of fiction.

Snarkiness mode: On
Setting: High

If you wanted to attempt to create pwin factors that actually define your probability of winning, you would need a verifiable mechanism for driving them into the proposal, and a means to track doing that over time so you can refine your estimates based on reality. Instead, a lot of companies produce a list of themes and hand it off to the proposal. Advanced companies will produce a capture plan, but unfortunately more often than not it will sit around unread. Well, maybe read once and never referred back to during the proposal. If you do better than that, congratulations, but your pwin estimate is still rubbish. Prove me wrong.

Why pwin estimation can lead to lower win rates

A list of themes is a weak attempt to impact the proposal. A list of themes or advantages is problematical because it presumes that proposal writers will keep it in mind and incorporate every place they should. This is not a safe assumption. That list is usually not mapped to the proposal outline, completely unrelated to the evaluation criteria, mostly all about you instead of being about the customer, leaves huge gaps where the proposal team will just make stuff up, and has overlaps where the team will simply ignore the weaker entries. The result during the proposal is falling back to basing everything on the same RFP that all your competitors have, as if there wasn’t any pre-RFP pursuit and paying zero attention to what you thought drove your pwin.

If you don’t have a tangible means to drive the advantages used to calculate a positive pwin, your proposal will fail to live up to your projected pwin value. Your projected pwin value becomes a work of fiction used to secure a bid decision, and not an accurate reflection of your chances or of your advantages.

There are as many ways to calculate pwin as there are companies. Anyone claiming to have an “algorithm” to calculate pwin usually just has weighting factors that sound good to them. But calling it an algorithm helps to imply that it has a sophistication that somehow imbues it with predictive gravitas. Pwin can be calculated in many different ways. Different factors are considered and everyone’s secret sauce is how they subjectively quantify them. What they all have in common is the disconnect between the estimate and what goes in the proposal.

Does your pwin estimation pass the "So what?" test?

Try applying the “So what?” test to your pwin calculations. Here are four areas that are often part of pwin calculations:

• Customer intimacy. Have you talked to the customer? How many times? At least once? Pwin calculations often try to quantify customer contacts. But if we’re being honest, so what? So what that you talked to the customer? Does it matter if it doesn’t change what you offer or say in your proposal? 
• Experience. You have relevant experience, maybe even more than your competitors. But so what? How will that change what the customer gets in your proposal? Every proposal evaluates past performance. Maybe you have an edge in that section. But does this RFP even include any evaluation criteria based on experience in the technical and management volumes? Some do and some don’t. If it does, is it weighted enough to impact whether you win or lose?
• Offering advantages. Hopefully you believe with quite firm conviction that your offering is better. But so what? What needs to go into the proposal to prove that those advantages should earn the highest score?
• Price to win. You believe you can deliver at the price required to win. Is that something you calculated or are wishing for? Is price the most important evaluation criterion? How will your pricing strategy change your offering and how you position it to get you the highest score where it matters? 

If considerations like these are going to change what you say in your proposal, then how? How will you ensure that the right parts of the proposal position things in the best way so that your advantages achieve the highest possible score?

If you go straight from the RFP into proposal writing, then your win rate will be much lower than your pwin estimates. In fact, just for fun, compare your average pwin values to your actual win rate. I apologize in advance for cluing you into that dose of reality. What people are saying to convince The Powers That Be to bid things is numerically and provably different than the action outcome.  See also: Drinking your own bathwater.

As a side note, if you still insist on calculating pwin as a percentage, consider only accepting pwin rates within, say 20%, of your win rate. Anything higher is likely improperly calculated and anything lower isn’t worth bidding. 

How your pwin estimation can positively impact your proposal win rate

In order to drive your pwin considerations into your proposal, you need something in between creating the proposal outline and the start of proposal writing. This is where you can combine your advantages with the RFP evaluation criteria and allocate them to the document. This is how you explain to your proposal writers the points they should prove. This is how you ensure that you prove your advantages to the customer. This is how you increase your win probability much higher than throwing out a list and hoping it finds its way into the document. 

Increasing your probability of winning is a good thing. Assigning a percentage or value to pwin is an exercise in self-delusion. To increase your probability of winning, identify the factors that contribute to it. Measure them when you can, and guess when you can’t. Just be honest about your subjectivity. If you can, refine it based on reality on a regular basis. But if those factors don’t drive change into the proposal, then they have no impact on whether the sale closes and nothing to do with your actual pwin.