Bidding and RFP Management Industry Best Practices and Secrets for Winning More Deals
In the highly competitive professional services industry, companies must devote significant time and resources toward the complex bidding and RFP process. In addition to strong competition within the industry, buyers are becoming increasingly knowledgeable. As a result, many companies find that in order to submit a competitive RFP, they must architect a significant fraction of the solution (often around 25%) just to be in competition to win the job. Depending on the scope and specifics of the job, this can equate to hundreds of thousands if not millions of dollars. That’s why it is so important to follow a set of best practices when going through the bidding process.
Bidding and RFP Best Practices
With significant pursuit costs that can run into the hundreds of thousands of dollars, the RFP win rate on forecasted opportunities for businesses in the professional services space must be between 60-70%, or greater. To maintain this win rate, businesses should carefully vet which jobs to bid on and then efficiently manage the RFP process from initiation to completion. By following this set of best practices, businesses can create a streamlined and effective RFP process that will result in more wins and keep profits climbing.
Ensure jobs are qualified before soliciting the business
This might sound obvious, but in today’s market it is wildly expensive for professional service firms to chase opportunities, which is why thoroughly vetting opportunities up front is so critical. A customer relationship management system (CRM) can assist in the vetting process by acting as a central repository for all the data that must be analyzed in order to determine which opportunities are worth chasing. By ensuring all data is contained in a CRM, businesses are able to make quality, analytical decisions to identify the most viable opportunities and focus resources where they’re most likely to succeed.
Have a task management strategy and system in place
The bidding process is complex and more often than not there is no standardization around the RFP process. With the many people, business functions and assets that are involved in the RFP creation process, it is helpful to have a task management system, such as a CRM, that can improve efficiency and decrease the likelihood of error. A CRM can associate tasks with people, timelines, dates and more while giving businesses visibility into the RFP timeline and helping teams share relevant documents and information. By using a CRM to manage data and tasks, redundancies are eliminated, meetings become much more productive as questions arise based on data in the CRM, communication is streamlined and timelines are closely managed.
Manage your relationships as well as your data
There is an intricate network of relationships with both external and internal stakeholders, that are typically involved in the opportunities professional service firms bid on. For example, there may be a large real estate firm, an architect, an engineer, a construction company and multiple consultants all involved with one project. Understanding the role of each individual in the context of a specific opportunity is valuable information during the pursuit, as well as later on during the engagement as a point of reference. In order to do this, you should employ an advanced relationship management system that manages not just data but also the people and relationships involved in the project.
Start capacity planning early
It takes many people and multiple departments to put together a successful and winning RFP response, and then to carry out the project. Using a CRM can enable businesses to scope out capacity ahead of time by pinpointing required parties and identifying who has the bandwidth to join the team or consult on the project. A CRM also allows you to compare resources, skills and proficiencies in order to identify the best employee to fill each role. On an aggregate scale, this capacity planning capability also allows leadership to make longer term hiring decisions, by recruiting proactively before there is an actual resource shortage.
Use a centralized system to manage all data and parties related to a bid
Managing the RFP and bidding process can get messy if there is no centralized system in place to store data, track tasks and manage relationships. With the amount of detail involved in an RFP and the number of resources dedicated to the process, businesses shouldn’t rely on just email and spreadsheets. A CRM can be the best tool businesses employ during the bidding process, helping them to become more efficient, reduce error and streamline internal communications.
If you are interested in learning more about how a CRM can help your business win more bids, contact us. With deep industry experience and a close partnership with Microsoft, the team at Hitachi Solutions understands how technology can help businesses just like yours move forward, cut costs and increase profits.