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8 ways you are wasting a ton of money on proposals

It's not unusual for companies to waste half their proposal efforts

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I tend to focus on winning proposals instead of efficiency. One more win can produce enough revenue to cover the inefficiency of many proposals. If you want more revenue, you are better off focusing on winning than reducing proposal effort. Unfortunately, many organizations treat proposals as a cost instead of as an investment (let alone the core competency of the organization). Proposal costs are covered out of the overhead portion of the budget, and that’s always under pressure for reduction.

But the best ways to reduce effort on proposals have very little to do with proposal production. Here are eight ways companies waste a ton of money on proposals:

  1. Not being selective in what they bid. Fooling yourself into thinking a bid is an “opportunity” just because you have an RFP and think you can do the work does not mean that you are prepared to win it. Fooling yourself into thinking you can win it, even though you’re not prepared, only makes it worse. Each low probability bid that loses adds the entire cost of the proposal to the efficiency equation. Just one can do more damage than buying magic proposal software can fix.
  2. Not being ready to win at RFP release. If you are not ready to win at RFP release, it means you’ll be trying to figure out what it will take to win while writing. This means you’ll have to do re-writes every time you figure out something new. It means you won't be able to write to prove the points you want to make because you'll be figuring out those points as you go. Those points will be less numerous, weaker, and torn up during review without time to fix it. Your win rate will suffer accordingly. To save the cost of losing proposals, try investing a much lower amount in pre-RFP preparation.
  3. Changing the outline. Nothing is as disruptive to proposal writing as changing the outline can be. It can burn a huge number of hours. Far more than setting aside a little bit of time to review and approve the outline. Reviewing the outline should be given the same priority as reviewing the content. Never leave it to one person to determine the outline.
  4. Discovering their bid strategies by writing about them. If your proposal is going to accomplish your bid strategies, they need to be known before the writing starts. You can’t sprinkle some "themes" on at the end and expect them to win it for you. When you change your bid strategies after proposal writing has started, you’ve changed the thesis or the point you’re trying to make. This can cause a complete do-over because everything in your proposal should be trying to make that point. Change the point and you should have edits everywhere. If you don’t, it literally means your proposal was pointless. An investment in content planning prevents this and saves far more than it costs. Proposal content planning can actually be seen as a profit center, since it will increase your win rate and bring you revenue you would have lost in return for the investment.
  5. Not being able to decide their approaches. When people don’t know what to write, it often has more to do with not being able to decide what to offer than it does with the writing. What are you going to offer? How are you going to do it? Why are you going to do it that way? When you can answer those questions, writing it down becomes straightforward. When you can’t answer those questions, you waste time getting started and then every reconsideration spawns a re-write that wastes even more time. Don't waste effort writing in circles if you want to lower your proposal costs.
  6. Not being able to answer the writer’s questions. Would the customer prefer this or that? How should we position our offering? What matters to the customer? When the writers don’t have answers to questions like these, they either

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    stop and wait, write something lame with the intention of re-writing it later, or simply pull their punches and not bother making the point. This leads to waste when they don’t have the answers before they start writing.
  7. Not defining proposal quality until the review. Proposal writers should start with the same criteria the reviewers will follow. If the reviewers make up their criteria at the time of the review, you are guaranteed to introduce unnecessary and costly re-writes.
  8. Not reviewing the proposal until all the narrative is in place. Waiting until all the text is in draft form before you start reviewing means the review takes place later than needed and the changes will spawn more extensive re-writes with less time to accomplish them. It’s wasteful. By the time you get to a draft, you should have already reviewed your outline, bid strategies, approaches, positioning, and many other things, leaving only wordsmithing and presentation to be reviewed.

Add up all the delays and re-writes and it’s not unusual for companies to waste more than half their proposal effort. How much effort should a company go through to prevent some of that waste? It’s an 80/20 problem. For 20% of the effort, you can reduce 80% of the waste. Why don’t more companies invest in that 20%?

Looking back on what I just wrote I find it very interesting that by reducing the waste, you’ll also win more proposals. The things you do to eliminate the waste are some of the same things you should do to increase your win rate. Reducing cost at the same time you increase revenue is a fantastic way to increase your ROI. If you do the math and compare the costs to the benefits of reducing a percentage of that waste while increasing your win rate by a percentage, it’s not hard to see benefits that are orders of magnitude greater than the costs. But what I like best is that instead of having to psych yourself up to invest effort to achieve your gains, by eliminating waste you’ll actually be putting less effort into achieving your gains. Or you could just wastefully muddle through like you are now.

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More information about "Carl Dickson"

Carl Dickson

Carl is the Founder and President of CapturePlanning.com and PropLIBRARY

Carl is an expert at winning in writing, with more than 30 year's experience. He's written multiple books and published over a thousand articles that have helped millions of people develop business and write better proposals. Carl is also a frequent speaker, trainer, and consultant and can be reached at carl.dickson@captureplanning.com. To find out more about him, you can also connect with Carl on LinkedIn.

Click here to learn how to engage Carl as a consultant.

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