Messages That Matter: Tracking Results - Metrics and Measures

 

Posted By Dr. Tom Sant | May 22, 2013

 

A discussion on the Association of Proposal Management Professional's LinkedIn discussion board posed a very interesting question:
How to measure success in responding to RFPs (requests for proposals) if management does not want to include win rate as one of the key criteria?

Check out the discussion here

So if you can't track win rates, where do you focus? It seems to me that you have two options: (1) improvements in proposal cost effectiveness or operational efficiency, and (2) customer satisfaction independent of win rates.

1A. Cost Effectiveness

Companies that have a dedicated proposal operation can measure how much it costs to run that operation compared to how much the proposal team has helped win. This metric acknowledges that winning contracts is the result of a multitude of efforts and skills, and that the proposal is only one part of that total package. However, a well managed proposal operation should learn to operate more efficiently and effectively over time, so it should be able to handle more bids with the same headcount and/or increase the amount of revenue won through greater experience and insight. If this measurement is trending in the right direction, the ratio between the cost of running the proposal operation and the revenue won from proposals produced by that operation will grow larger:

2011: Proposal Center budget = $850,000
Revenue won = $38 million
Ratio of revenue to cost = 44.7 :: 1

2012: Proposal Center budget = $850,000
Revenue won = $64 million
Ratio of revenue to cost = 75.3 :: 1

This metric gets at the issue of whether the proposal operation is delivering "value for money" overall and whether the operation appears to be improving year over year.

1B. Increased Operational Efficiency

Using better tools and better processes should result in greater productivity, better utilization of resources, lower costs of operation, or similar measures related to time and effort.

One of our clients had a firm rule: if you can’t find the content you need in 45 minutes, stop looking and write a new version. We eliminated that wasted effort by implementing automated search tools and a systematic database for them. They could have measured the improvement in efficiency this way:

2011: Finding an RFP answer among existing proposals: 42 minutes average

2012: Finding an RFP answer from redesigned database: 3 minutes average

If you extend that improvement in efficiency beyond the Proposal Center to include the entire sales force, you'll have a huge impact on productivity.

2. Measuring Customer Satisfaction

To use customer satisfaction as a metric, you first must define who the “customer” is. The obvious choice, the economic buyer in the client organization, may be only part of the answer. In a proposal operation, you also have internal customers whose satisfaction matters. The sales force is an obvious customer for your proposals—they are counting on them to help move opportunities toward closure. What about marketing? They might be customers, since their work in branding your company’s products and services should help inform and guide your proposals. What about the legal department? They may be an important part of the review process to which your proposals are subjected. After all, proposals that fail to protect the company’s interests can be disasters.

After you’ve defined who the customer is, your next task is to gather quantifiable, objective measures of their satisfaction. Win/loss analyses, focus groups, interviews, surveys, and other research tools will help you get the data you need.

In summary, establish solid baseline data before you start measuring anything. Without a baseline, there’s no way to know if you and your proposal team are doing better or worse than before.

Obviously, one way to have an impact on win rates, operational efficiency and customer satisfaction is to invest in a system that enables you to do the job better and faster. Call us. It just so happens we have exactly what you need. And the metrics to prove it.

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