November 1, 2010

Responding to Web-based RFPs

Sometimes you do everything right but it all comes out wrong. You write a fabulous proposal and you still lose. True, it’s not fair.

That’s our topic this time.

Tom Sant

Responding to Web-based RFPs

A proposal specialist at a major health care company recently sent me a copy of an RFI (request for information) his team has to fill out. It’s a Web-based form that’s required of all health care companies who want to bid for contracts from any of the dozens of companies who have agreed to use this thing. Called eVALUE8, which is too cutesy to be tolerated in a license plate much less a business document, it’s basically a big checklist.

The document starts out, “Members of the National Business Coalition on Health (NBCH) and Watson Wyatt (WW) eValue8 group have embraced a common set of core health plan performance expectations and have worked collaboratively to develop the 2006 NBCH/WW eValue8 Request for Information (RFI).” Just reading that opening sentence, you know we’re in trouble. The sentence is 40 words long, contains three acronyms, not counting the “eValue8” thing, and uses some pretty bizarre business clich├ęs. And how about the weird syntax? The members claim they have “embraced” a “set of core…expectations.” I’d probably buy a ticket just to watch them do that.

Anyway, lots of big companies are involved in this thing, so healthcare companies feel like they’re bullied into filling it out. It consists of page after page of tiny fields where you enter all kinds of obscure data: the percentage of your practitioners who work in a staff model or in a captivated multispecialty group, or in a captivated IPA, whatever that is. Or the number of plan members you have enrolled in a commercial HMO/POS arrangement, or in a commercial PPO, the total number of Medicare members, and so on. It goes on this way for page after page, little boxes and lots of numbers. All in all, it’s over 150 pages long!
If nothing else would do it, filling out eValue8 would make you eager to see healthcare reform in this country.

What about you? Are you getting similar RFPs and RFIs in your business? What should you do with them?

One tempting answer is to pitch them in the trash. Requiring vendors to fill out reams of data and complete spreadsheets on pricing is a lousy way to buy anything. I've always believed that this kind of granular RFI or RFP really gets in the way of making an intelligent buying decision. And there are a couple of sneaky aspects to them that make them even less palatable.

First, a checklist RFP is based on the assumption that what you and everybody else in your industry offers is a commodity. For these buyers, value has no value. They deny the relevance or importance of any value-added components, any differentiators, and any distinctions in service delivery models. They refuse to acknowledge that prior experience is a good thing. Typically, all they want is pricing data and confirmation of technical specs. With the increased power procurement groups have grabbed during the recession, we're seeing a lot more RFPs that are written this way.

Second, this kind of RFP is often written by a consultant or some other third party.
Unfortunately, it’s in the consultant’s self-interest to make the buying process as complex as possible and to minimize the meaningful differences among vendors. The consultants prefer to keep the vendors at arm’s length from the actual customer and to focus the customer’s attention mainly on the consultant’s ability to manipulate a huge amount of data. That’s why the RFPs they issue are so complex, why they give you so little room to respond, and why they focus on technical details for the most part.

So… back to our question. What do you do with this kind of RFP? Well, it really might be in your best interest to refuse to respond to them. That decision depends on a number of factors, but the volume of effort involved in responding compared to the probability of winning profitable work makes them pretty unattractive.

This is particularly true if you have received the RFP from a client with whom you’ve had no previous contact. Statistically, your chances of winning any business in that situation—you’ve never talked to them, the RFP arrives out of the blue, and it gives you no room to make a persuasive business case—is less than 1 in 20.

It’s also possible you’re being used. Maybe the company issuing the RFP already knows who they want to hire, but they have to get three other bids. Or maybe they want to beat up their current supplier on price. Any way you look at it, it’s not a very good investment of your time, is it?

But let’s suppose you have to respond to it for whatever reason. Is there any way to make your proposal stand out a bit?

Well, first of all, if there are any areas of the RFP where you are allowed to enter free-form text, make sure you write as persuasively as possible. Second, write a well-structured, persuasive executive summary and use it as the covering e-mail when you submit your completed RFP on line. Maybe nobody will read it, but it’s not that much extra work and it might help. Third, if you make it past the first stage of reviews, seek a face-to-face meeting with the client and develop an absolute killer proposal presentation, one that emphasizes your understanding of the client’s needs, the value you can deliver and the differentiators that set you apart.

I hope these form-based RFPs are a passing fad, because it doesn’t seem to me they serve the interests of either the buyers or the sellers.

One bit of good news in all this is the fact that Sant Suite can automate your response to forms, even if they’re in spreadsheets or on the Web. At least that way you’re spending a lot less time on them! You can see an interactive, Web-based demo of how it works at our site,

October 25, 2010

Paper or Digital

groceries: paper or plastic? I even did research on the Web to figure out which was the right choice. Talk about confusing! I finally just gave up and now I bring my own—cloth, thank you.

But there’s another choice we face with our proposals: paper or digital? We know which is greener. But which is more effective?

That’s our topic this time.

Tom Sant

Paper or Digital

Would you prefer to submit your proposal as a printed document or as a digital file? Perhaps more important, which format do your prospects prefer?

We're at a flex point in proposal writing, I think. Traditional methods have involved writing a document, printing it out, binding it and putting it between nice looking covers, and then delivering it—usually multiple copies—to the prospect.

Many RFPs still specify that you must submit hard copies. State and local government agencies often require a paper submission.

But increasingly, RFPs call for digital submissions. At the simplest level, they may require that you submit your document via e-mail or that you upload it to a Web site. At a more complex level, they may require you to fill out Web-based forms.

I believe that at some point in the next few years, proposals will be true digital documents—more like Web sites than Word docs. They will feature embedded video clips, hyperlinks, search capabilities, and other functionality that will make them interesting and easier to use. That kind of development is inevitable, I believe. But will it be a good thing? I honestly don't know.

Each of these modes of delivery has advantages and weaknesses.

Traditional paper-based proposals have the familiar form factor that all paper-based documents have. They're easy to skim, easy to flip back and forth in and easy to score. You can write notes in the margins, you can fold down the corner when you see something interesting, and you can underline or highlight stuff that you want to remember.

On the other hand, with paper-based proposals, a lot of trees have to die. Right now I have a single copy of a proposal written to the state of New York, which required paper-based submissions. The proposal consists of three volumes. Each volume contains over 500 pages of text. Each volume is bound in an elaborate three-ring binder, and each binder is housed in a slip case cover. This proposal is so big; I had to clear an area of my desk off just to house it. Reading it is pretty much a nightmare. And how much do you think it cost—both in terms of dollars and carbon footprint—to deliver multiple copies of this thing to Albany?

Digital proposals save paper, save transportation costs, and can be delivered to the prospect almost instantaneously. There's no need to make multiple copies, because the prospect can simply forward your digital version to whomever needs to see it. You're probably creating the document digitally; using Microsoft Word, so delivering it digitally eliminates an extra step in production.

But digital documents can be difficult to work with. If the proposal has been saved as a .PDF file, which it probably should be, the reader will have extreme difficulty annotating it. Skimming digital documents can be very difficult, too. And when you deliver a document in native Word format, its appearance can change (and never for the better) if the recipient has the Normal template set to something unusual. In fact, you may have problems delivering the document if the client is using an older version of Word (accepting .doc files) and you're producing your proposal in a newer version (such as a .docx file).

The next generation of digital delivery sounds pretty exciting. The ability to embed video, to create hot links to Web sites outside the proposal, and the opportunity to use advanced search technology, hyperlinks, and a more creative interface all sound pretty cool.

But there are a whole host of issues associated with the use of technology that will have to be addressed. In the public sector, it's unlikely that such submissions will be accepted for a long, long time, because they usually require the least technically advanced mode of delivery—in part to keep the playing field level and in part because that's all they can handle. Even if you're dealing with a technically sophisticated clientele, we've all had problems from time to time getting a video to open, a photograph to display, or a page to load properly. What happens if your evaluator has similar problems? Do they simply mark your submission noncompliant and move on to the next one?

What do you prefer? Would you rather produce a paper-based document or do you prefer to submit via e-mail? Or are you excited about the prospect of creating a true Web-based submission?

In the meantime, you know that whatever the future holds in terms of delivery, our tools will simplify the process. From our early days, when we first generated proposals in Word, WordPerfect, and AmiPro, until our latest versions when we can build them from components in multiple media and deliver them the same way, we have tried to take the hard work out of formatting and make your deliverables as crisp, professional, and consistent as possible.

October 19, 2010

Keeping Score

The premise of open book management is that employees will make better decisions if they understand how those decisions affect profitability. In The Great Game of Business, Jack Stack argues that workers need to know what the measures of success are, should be expected to improve the numbers by taking action in their own area of responsibility, and should have a direct stake in success or failure.

It all makes sense, yet surprisingly enough many companies have no idea what their win rate is, have no idea how long it takes on average to close a deal, and don't know what their best source of leads is. If you're not tracking that stuff, you're playing shortstop with a blindfold on.

Metrics matter. That’s our topic this time.

Tom Sant

Keeping Score

For years we have claimed that our proposal automation tools increase effectiveness and improve efficiency. A recent survey of several hundred Sant clients shows that those claims were completely justified. On average, our clients' win rate improved by 33% and they reduced the time required to create a proposal an average of 42%.

Unfortunately, there were quite a few clients who were unable to participate in the survey. Why? Because they had never measured their win rate before, so they had nothing to compare it to. And they had never tracked how much time goes into creating a proposal, so they didn't know how much time they were saving.

If you want to improve your proposal process, if you want it to produce more wins and spend less time and money along the way, you have to track what you’re doing and measure the results. That’s a basic principle underlying all continuous improvement methodologies, and it applies to the proposal operation as much as it does to the factory floor. Likewise, unless proposal writers and managers know how they're doing, they won't see the need to get better. If nobody is tracking my batting average, why would I bother to take hitting practice?

One of the first steps an organization needs to take is to decide what it is they want to measure. Which measurements are truly meaningful? "Win ratio” is the obvious first answer that comes to mind, but we all know from the experience of the recent recession that win ratios can be very misleading. If you won 30% of the deals in 2008, when the economy was still pretty healthy, but only 26% last year, after it had really tanked, does that mean you had a terrible year? In reality, you might be having a terrific year in spite of the small drop in win ratio. It’s possible that because of the recession, everybody else is doing much worse.

Or, to give another reason why it’s risky to use win ratios as the only metric, what if you’re winning all of the small opportunities and none of the large ones? In that case, your win ratio would be high but the average revenue generated per proposal would be low. If you supplement win ratio tracking by measuring the percentage of dollars won compared to the total amount for which you bid, you might get an idea of how well you did overall.

Other factors might include the ratio of new business won from new opportunities compared to new business won from existing clients. If you have a high renewal rate but are struggling to win new business, that doesn't bode well for your market share over the long term.

Deciding what to measure is not necessarily as easy or intuitive as it might initially appear, but it is the first vital step.

The next step is to gather a baseline of data. After all, if you don’t know where you are, it’s pretty hard to figure out if you’re moving in the right direction. In organizations where the proposal effort is centralized, or where there are controls placed on proposals so that none of them are issued without being reviewed by legal, finance, or senior management, it's a fairly straightforward matter to start tracking results. But in organizations where sales people are able to submit proposals without any further review or approval, tracking the actual win ratio may require a crystal ball or a Ouija board.

The final step is to develop a process for tracking results going forward. Assuming that you have tweaked the system in some way, you will want to know if that tweak has improved your win ratio or reduced the time required to finish a proposal. But unless you have a systematic way of gathering the data, you'll never know for sure what's working and what isn't.

Once you have the three basics covered—you know what to measure, you have a baseline to compare it to, and you have a systematic way of capturing the data—you’re ready to start managing based on the numbers.

At Sant, we believe in measuring results. But why wouldn't we—our results have been terrific. We're happy to share references and case studies to show you just how good they've been. And you can see an interactive, Web-based demo of our software in action on our site,

June 23, 2010

Lessons Lost

You often hear people saying that they want to capture the “lessons learned” from an important project, such as a major proposal.

My question is what do they do with those lessons after they capture them? Because they sure seem to disappear pretty quickly, given the number of proposals that repeat the same mistakes again and again.

That is our topic this time.

Tom Sant

Lessons Lost

Last fall I worked with a company that was in a pretty desperate situation. They hadn't won a single bid for over a year. They had survived on some large projects that generated cash, but those were winding down. If they didn't win a major opportunity—and soon—they would be forced to lay off hundreds of employees.

They had an opportunity to respond to an RFP for a huge engineering project, something that was perfect for them. They asked me to help, because they saw it as a must-win situation and somebody in their management group thought my methods might work.

I began by asking for certain kinds of content and insights into the engineering project and the government agency that was funding it that they hadn't gathered. When I arrived on site, I led a series of workshops to create client-centered and persuasive responses to each of the 20 major "questions" or topical areas in the RFP. And when we got to the section on personnel, I asked them to throw out their traditional resumes, which were long and boring, and write them in a completely different way.

For some contributors, the process was invigorating. They enjoyed doing things in a new way. For others, the process was more painful. But at the end of the process, they had a response to the RFP that was persuasive, value oriented, and client centered. And a few months later, they learned that they had won.

That was good news, obviously, and I took a large measure of pride in having helped them. But since then, I have learned that they have not incorporated a single thing we did into their standard processes. We found that doing things differently, following a different process, putting the emphasis on different areas of content, resulted in a win. You might even call those "lessons learned". But none of them were preserved. Instead, they have gone back to doing things the same old way—the way that had failed to win a single deal for over a year.

This is an extreme example, but one that's nevertheless common. In proposal operations, in spite of lip service to the contrary, lessons learned are quite often lessons lost. If you are a habitual reader of Dilbert, as I am, you may be cynical enough to simply accept the notion that senior managers would completely disregard lessons learned that produced hundreds of millions of dollars of success after months and months of failure. But I think the real cause of lessons learned becoming lessons lost has more to do with processes than with personalities.

Most proposal organizations, and indeed most sales operations as a whole, have no institutionalized process for capturing lessons learned. The argument might be that each proposal, like each sales opportunity, is unique. Each poses its own challenges. What works on one proposal may have little relevance to the next.

As you probably know, if you have read my comments over the years, I think that is nonsense. Although the specifics of each proposal vary, they vary within predictable ranges. By documenting what works, what contributes to greater success, what saves time or eliminates quality problems, we increase our ability to produce successful work in the future. Yes, the proposal itself will be different—perhaps very different—but the processes and tools we use will be very similar from one opportunity to the next, and focusing on improving those processes and tools is absolutely vital if we are to show steady improvement in both effectiveness and efficiency.

So why do so many proposal operations skip the process of gathering, documenting, and institutionalizing lessons learned? One reason is that they are immediately neck deep in the next bid effort. They believe they have no time to pause for reflection. As soon as today's proposal has been delivered, we must rush off to work on tomorrow's.

Another reason is that there is no budget set aside for this kind of effort. As a support organization, the proposal operation must be very careful to show that every minute of time and every dollar of budget is being directed toward winning business. Something that's one step removed, like capturing lessons learned, could be criticized as frivolous, so proposal managers avoid doing it.

A third reason is that in many organizations the proposal effort is decentralized. In a decentralized organization, it's extremely difficult to gather any kind of information on what's working, and it's even more difficult to learn what doesn't work. After all, who wants to volunteer to be the example of how not to do it?

Finally, lessons learned are often lost because the proposal operation and the sales organization as a whole may not have any system in place for implementing change. In an engineering or project management environment, change management is a well-defined part of the process. There are documented steps for institutionalizing a better process when you discover one. That is seldom true in sales or proposal operations.

What's to be done? The first step, I think, is to acknowledge that doing things the same way, over and over, without being open to changes that may improve results, is a recipe for stagnation and eventual failure. If you can get your organization to make that cultural shift, then here are some suggestions for capturing lessons learned and incorporating them into your standard procedures:

• Conduct regular lessons learned meetings with the sales and proposal development team. At a minimum, this should happen right after a major bid has been completed. Ask: What worked? Where were the obstacles? What workarounds or solutions did we come up with?
• For problems that come up repeatedly, create a task group to analyze the root causes. Ask: What preventative measures can be implemented? What gaps in capabilities should be closed?
• What did you do differently? Did it work? Was there anything you did that was so effective you think it should become part of your standard approach in the future? If so, document it and figure out how to make sure everybody embraces it. Training? Checklists? Tools? What's going to make this new way of working the standard way in the future?
• At least once a year, stand back from your standard processes—you're unquestioned "best practices"—and question them. What's being done simply because it's always been done? What's no longer adding value to the final deliverable? Can these steps be eliminated? Can they be changed and made more effective?
• Establish a formal process for institutionalizing change. Document the changes. Incorporate them into internal training. Modify your ProposalMaster and RFPMaster databases or the user interfaces to reinforce the changes. Begin including the use of these new methods into performance appraisals. Figure out what's going to work to convert lessons learned into accepted standard practices as quickly as possible, and then follow through.

If you would like some help in figuring out what lessons you have learned and what lessons other people learned that you can borrow, give us a call. From working with hundreds of companies in dozens of markets, we can help you jump start the process.