Everyday in Australia, the UK and USA over 20 million people, business owners, sales reps, bid managers etc, produce over 20 million B2B, or business to business, proposals. The vast majority, approximately 90% of which, will fail. I believe that with the right mindset and some basic training, most proposal managers can easily double or triple their success rates.
Hi. my name is Ian Bosler, but many of my customers call me the Bid Boss. With 25 years corporate bid management experience in Australia, New Zealand, Europe and the USA, I’ve won proposals worth billions, but also lost at least three to four times that value.
Over the last 10 years I’ve been providing proposal document production services for B2B businesses of all sizes. Each year at Intertype we support over 500 tenders valued from $10 million to many billions, and over 10,000 proposals valued from $2,000.
Over the past 35 years though, has much changed? From where I sit, not much:
1) Proposal writing is still only seen as a necessary evil within most businesses.
2) Little attention is paid to the visual appeal of the proposal
3) The focus is still on compliance and price, very much the “tick the box” approach.
4) There’s a lack of enterprise-wide value story integration.
5) There’s a near universal lack of process.
6) There’s also a lack of recognition of the value created by proposals, which is evidenced by the universal absence of the Chief Proposal Officer or CPO role.
There are three simple steps your organization can take that will significantly improve your bidding success across all opportunities, from simple quotes right through to major tenders.
The first thing to do is to resign from your industry. Industries are like an amorphous mass of sameness. All businesses in an industry tend to look exactly the same. When this happens, it’s very hard to differentiate yourself from your competitors. Occasionally a black sheep will appear within your industry, often trying to standout by being the lowest priced supplier. Eventually these black sheep loose their distinction and blend back into the herd.
Resign from your industry and truly differentiate and you can become the lone sheep with the entire paddock or market to yourself. This makes business much more fun.
For example, you could be just another player in the building industry, or you could actually own the residential lifestyle industry.
Apple is a great example of a business that has achieved this many time over. They resigned from the personal computer industry many, many years ago. They’ve also redefined the mobile phone industry. Then they went on redefine the retail industry, with the likes of iTunes, as well as the retailing of hardware: computers and now they’ve redefining the wrist watch industry.
One of the key issues that you have as a member of an industry is that you’re seen for what you do not why you do it. For example, if you’re in the printing in industry, you’re seen by the market as just another a printer. You print things. The market will never see you for why you do what you do and so miss being able to truly connect with prospects and customers at the powerful emotional level.
There are some great resources I recommend for you. The first, is the Blue Ocean Strategy. A book written by two Harvard professors, it’s not a textbook but rather a very easy read with great frameworks on how to go about becoming an industry of one, and to move away from competitive environments. It includes great studies such as Nintendo, Yellow Tail Wines and the City of New York
The second resource is about getting in touch with your why. The WHY guru is Simon Sinek. Perform a simple YouTube and search for “Simon Sinek TED Talk” to access a short video on how powerful getting in touch with your WHY can be for your business.
You need to think about your proposals as part of a process. Proposals are an activity that fall within a marketing and sales process. A marketing sales process goes through a number of steps including; attracting of traffic, capturing leads, nurturing prospects, converting into a sale, which is where the proposal stage resides, delivering and satisfying, upselling to customers, then finally getting referrals.
Great proposals contain a summary of the complete value story as it relates to the opportunity at hand.
The problem is, snippets of your value story are told in every stage of the marketing and sales process. You start to build the story through that attract, capture, nurturing processes. You crystallize that story in your proposal, and you further crystallize that value story in the delivery phase. It’s only when the actual delivery matches the value story within your proposal that repeat business and referral sales will flow.
When we look at the marketing and sales process, we often see that they are treated as separate and discreet activities and managed under silos such as Marketing, Sales and Customer Service. Within a B2B environment the proposal is the singularly most important tool…it’s where your brand or value story actually meets the market in order to drive revenue. To me it makes sense that the entire Marketing and Sales process should be managed by a CPO or Chief Proposal Officer. This will ensure value story alignment which will deliver the greatest ROI.
The final step is to look at it as a numbers game. The traditional “proposal” numbers game was to get as many proposals out there. In other words, double the volume of proposals you send out and you’ll automatically double our sales volume. This is the wrong number to focus on. When managing numbers with our clients, we look to measure five key Variables. Firstly we measure traffic, whether it’s to your website or opportunities you’re invited to bid on. Next we look at the number of proposals that flow from the traffic followed by the value of those proposals. Then we look at the number of wins and the value of those wins.
By presenting these numbers in dashboard you have an easy to use management tool. A well constructed dashboard captures all the key variables, displays trends and provides management insight into improvement opportunities.
This is about a small printing business. Four years ago, it was a part of the printing industry, it looked like a printer, smelled like a printer, walked like a printer it was a printer clearly in the printing industry. It had very modest sales of $450,000 a year. The average order value was $80, which was the industry average for digital printers. Its win ratio was 15%, which is a bit higher than the printing industry. Their growth rate, again mirrored the printing industry, in that it was declining slowly at about minus 5%. Their prices were mid-market and they were getting a lot of price pressure. They communicated price not by proposals, but by quotes, again mirroring the industry norm. A typical print quote contains a list of jargon then a price. These style of quotes force their prospects to compare on price as there’s no value story. Price is the only form of differentiation.
Fast forward four years. They resigned from the printing industry yet they print more than they ever did before. Their sales have gone up to $1.5 million, very nice for the size of this business. They didn’t increase their head count and didn’t invest in additional equipment. The average order value has gone from $80 to over $1900 per order. Their average win ratio is now at 62%. After the initial burst of growth, they’re now settled into a growth rate of 13% per annum. Their prices are now in the high market which is about 10% above the mid-market range. They’ve eliminated quotes from their business and only deliver proposals. A clear demonstration of the power of proposals.
Those three steps again. Firstly, resign from your industry and get in touch with your why. Secondly, it’s all about the process. Thirdly, it’s a numbers game.
If you want to learn more, visit us at intertype.com.au, or text your first name and email address to 0407-058-709 to receive free resources, checklists and guides to help you improve your proposal success rates.