June 15, 2008

Once More with Feeling

Winning the second time in a proposal competition is normally much easier than winning the first time around. Incumbent vendors win, on average, about 90 percent of all rebids. Even incumbents who have performed poorly win about 50 percent of the time. Clearly, winning a renewal is not as difficult as winning new business.

But you still have to do it right. That’s our topic this time.

In many industries, contracts come up for renewal every year or two and we are required to recompete for the business we’re already doing. This can feel like a waste of time. If we’ve been the client’s choice for several years and have done a decent job of providing services or products, we may think it’s unnecessary to write a persuasive proposal just to keep the business. Unfortunately, that attitude can creep into our proposal, suggesting complacency or even contempt, triggering the customer to start looking closely at competitors.

Another mistake people sometimes make on renewals is to wait to start the process until the Request for Proposal has been issued. If the decision maker in the client organization hasn’t heard a word from us in the past year, we may have made our job harder than it needs to be. It’s a good idea to start the renewal process on your own, well before the client brings it up. For example, you might schedule a “mid-term review” so you can remind the client of the promises you made in your last proposal, what you have done to fulfill them, and how well you have met or exceeded their expectations.

The renewal proposal can be shorter and more focused than a first-time proposal, because you don’t need to include some of the traditional content areas. For example, you won’t need to provide as much evidence of your competence. The client already knows whether you’re competent. You can minimize the company history, the team resumes, the references, and the case studies. (Obviously, if you’re responding to a formal RFP and the document asks you for these items, you must provide them.) Your renewal proposal can be much more concise and still be effective. However, you still must provide some evidence of competence, ideally by referencing work you have done during the previous period of work for this client.

There are two other changes to a renewal proposal that are important to note.

First, you should use the same persuasive structure you use in competitive proposals where you’re not the incumbent, focusing first on the client’s needs, then the outcomes, followed by the solution and evidence. However, when you present the client’s needs, you need to finesse them. After all, if you’ve been the incumbent provider for any length of time, the client might reasonably ask, “If you’ve been doing such a great job, why do we have these unmet needs and unsolved problems?”

The answer to this conundrum is to position the issue of needs by pointing out to the client that because of the positive changes that you have already introduced, because you have successfully resolved existing problems, you have laid the foundation for further growth, for improvements and innovations. Or you might try to position the client’s needs in terms of changes in the marketplace or the competitive landscape that require a response. Or you might present what they need in terms of opportunities. We’re no longer taking the client from a state of disarray to a state or order. Now we’re taking them from a very good position to a state of excellence, from a position of strength to a state of overwhelming competitive advantage.

Second, at the very outset of your executive summary, before you ever discuss the client’s needs, take a few minutes to remind them of some key successes during your recent contract. People have short memories. They tend to forget how it used to be before you came in to fix things. If you really did do a great job of improving their situation, you don’t want them to forget about it. Listing the accomplishments and comparing the client’s before with their after is an effective and appropriate first step.

What if there were problems between your organization and the client’s? What if you failed to deliver, missed deadlines, had cost overruns, or otherwise had serious client satisfaction issues? Is it better to ignore those problems and hope for the best, or to acknowledge them and try to put a positive spin on the situation? In general, if the problems occurred recently and were of some significance, you are better off mentioning them and indicating what lessons were learned and what changes to procedures or personnel were made to assure smooth performance going forward. However, if the problems occurred early in the contract and considerable time has passed, there’s probably no point in bringing them up. If you had some hiccups during start-up, for example, but since have had two years of seamless performance, why dredge up ancient history?

Renewal proposals are great, because your odds of winning are so much higher and you can cite specific examples of success the client will recognize. But the one thing you can’t afford is to take the renewal—or the client—for granted. Maintain a competitive attitude and write to win.

Did you know that Sant Suite allows you to convert your previous proposal into a new document with just a couple of mouse clicks? That feature makes it easy to turn your proposal into a review document or to transform a review presentation into a proposal. And with Sant Suite you can easily modify the proposal format so that renewals are different from first-time proposals. It’s all part of giving you a complete solution for your proposal needs.

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