One day one of the players asked me, "Are we winning, coach?" I had to tell him that we weren't even keeping score, which led him to ask a pretty profound question: "How can we tell how we're doing if we don't know the score?"
Out of the mouths of babies, eh? Well, that's our topic this time: How to measure results in a proposal operation.
Measuring What Matters
In the previous message, we discussed some of the factors to consider in building a "proposal center of excellence." One crucially important factor that we didn't discuss was metrics.
You need to regularly take the pulse of your proposal operation by measuring both performance and proficiency. In measuring performance, you want to make sure the work you are doing and the results that work is producing are in alignment with the company's goals. In measuring proficiency, you need to define what tasks proposal writers perform and which of those tasks have the greatest impact on producing successful projects. Then you can measure whether or not the people involved have the right skills at the right level of proficiency.
Why bother measuring all of this stuff? Well, if you want to improve your proposal process, and if you want it to produce more wins and require less time and money, you have to be able to track what you're doing and measure the results. That's a basic principle of continuous improvement methodologies, and it applies to the proposal operation as much as it does to the factory floor.
To improve your proposal process in a systematic way, you must first decide what it is you want to measure. Which measurements are truly meaningful? The obvious answer would be "the win ratio," but that can actually be a misleading statistic. What if you won 30% of the deals last year, during a boom period, but the economy has tanked and you're now winning 28%. In reality, you might be having a terrific year in spite of the small drop in win ratio. It's possible that 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 might be high but your revenues generated per proposal would be low. If you supplement win ratio tracking by measuring the percentage of dollars won as compared to the total amount for which you bid, you might get an idea of how well you did overall. But does it take into account such factors as changes in the economy? Does it distinguish between follow-on bids and new bids? You get the point. Deciding what to measure is not necessarily as easy or intuitive as it might first appear, but it is the first step.
The second step in effectively measuring results is to develop a baseline of data based on the "old" way of handling the task. I can't tell you how often we work with clients to improve their proposals and automate their process, only to find that they have no way of measuring the improvements because they weren't tracking their performance previously. If you don't know where you are, it's pretty hard to figure out if you're moving in the right direction.
The third element in measuring results is to implement a system that will collect the appropriate measures from the "new" process. This may be a matter of self-reporting on the outcome of each sales opportunity, but it could require a more structured effort, such as conducting a win/loss analyses or tracking hours of effort.
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. In general, I recommend that companies take a three-dimensional view of their performance, the three dimensions being financial, technical, and social.
Financial results include win ratio, and capture rate (the amount you're winning compared to the total amount available). They can also include production costs per proposal or per finished page or per dollar of business won.
Technical results are measures of work efficiency. How long does it take to answer the average RFP question? How many hands must a proposal pass through before it's approved and released? How quickly and easily can proposal content be captured, archived, reviewed, and retrieved?
Social measures focus on customer satisfaction. Regardless of whether we won the contract, what was the customer's reaction to our proposal? Did it leave a positive impression? Was it a document that differentiated us in a positive way? Win/Loss interviews can uncover some helpful insights into our current performance from the one critic who matters the most: the buyer.
At Sant, we believe in measuring results. On average, companies who implemented Sant Suite achieved an increase in win rate of 25% and a productivity improvement of 37%! You can also view an informative demo on our website at www.santcorp.com. You're also welcome to call us at 888-448-7268 (USA) or +44 (0) 870 734 7778 (UK).
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