If your business depends on winning proposals, here are 4 things you need to maximize your ROI

Submitting low quality proposals and making it up in volume is a bad strategy. A better strategy is to target doing the least costly things that return the most revenue. When it comes to proposals, the things that generate the most revenue may not be what you think they are.

A key lesson for companies that depend on proposals

Preparing a proposal can be costly. But preparing a winning proposal returns a large amount of revenue. The problem is that not every proposal wins. When you increase your win rate, you gain revenue without additional cost. If you produce 5 proposals in order to win one, and you make improvements so that you only need to produce 4 proposals to win one, you will increase your company’s revenue 25% on average (the increase from a 20% win rate to a 25% win rate). That 25% increase in revenue will come without producing any extra proposals. The only cost will be what it will take to improve your chances of winning. That will be much, much lower than the 25% increase in revenue it returns. 

Maximizing your proposal return on investment

Is there any other way to increase your revenue by 25% with a lower investment? If so, do that too. But still focus on improving your win rate.

The flip side of this is that by under-resourcing proposals and cutting costs in a way that impacts your win rate, you could be losing 25% of your future revenue. 

Test it. Track it. Measure it. If you aren’t tracking how the things you do and the decisions you make impact your win rate, you’re really not trying hard enough to maximize your return on investment. 

How do you improve your win rate?

There are lots of little things you can do. But instead of focusing on techniques, it’s better to start by focusing on strategy.

1. Your win rate depends on the customer giving you the best score.
2. Your proposal must be constructed to maximize this score.
3. Your proposal must present what the customer wants to see in such a way that they can give it a top score, rather than presenting what you want to say about yourself.
4. This in turn makes the entire proposal process about discovering what the customer wants to see and then building your proposal around that.

Your revenue depends on getting both sides of the last item right:

1. Discovering what the customer wants to see requires insight that comes from making contact, doing your research, and developing empathy for the evaluator.
2. Building your proposal around what the customer wants to see requires developing a content plan for your proposal that positions your strengths in a way that supports the customer’s needs and preferences.

So how do you achieve these things? You've come to the right place! We've been writing about how to discover what it will take to win for decades. We've spent a similar amount of time writing about how to refactor and reengineer your proposal process. And all along we've focused on maximizing win rates and return on investment.

Signs that you're doing it all wrong

If your proposals are very descriptive and procedural they tend to be all about you and what you do, instead of being about the customer. Search your proposals for the word "will" and you'll see what I mean. 

If your proposals are based exclusively on the RFP, they don't show any real insight into the customer, their environment, stakeholders, or their concerns. How can you expect the customer to accept your proposal if you don't talk about what the customer is trying to achieve or anything beyond doing what they asked for? If you don't position your proposal in any particular way other than as competent, then all you are doing is competing on price.

If you don't provide input to the proposal team that includes insights about what matters regarding the customer, opportunity, and competitive environment, then no matter how they try, you'll end up with a mediocre proposal. You can expect to lose more proposals than you win. Probably a lot more. Maybe you can get by like that, but you won't prosper to your full potential. You won't maximize your ROI.

Proposal cost and benefits

The cost of doing what it will take to win is less than what your business loses through not doing it or minimizing the effort you put into your proposals. Discovering what the customer wants to see in your proposals before you write them is one of the lowest cost things you can do to maximize your revenue. 

If you are going to be in the business of bidding competitively proposals, then be in the business of preparing proposals that better reflect what the customer wants to see than those of your competitors.

Being in the business of preparing low-cost proposals based only on what’s in the RFP and saying great things about yourself will not turn you into a competitive company. Or maximize your revenue. No matter how many you submit. 

You can’t make up for mediocre proposals by doing them in volume. Keeping proposal costs low so you can do more of them will actually increase your costs and lower your ROI because you’ll be paying to lose more often. Your competitors will submit fewer proposals and end up with more revenue. And you’ll be left desperately searching for more RFPs to bid, as long as you try to make up for it in volume.