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Winning a RFP, what are the odds?

by on September 3, 2013
Last updated on
Image courtesy of Wikipedia
We often hear the knee-jerk response "nobody ever wins RFPs" as the answer to why someone should or shouldn't respond to Requests for Proposals, and even when the odds aren't asked, but instead advice is being sought.

This response isn't factually correct: someone is almost always winning that RFP, it just may not be you.

The probability of winning a RFP can vary, not just by how talented your firm is, how spot-on your pricing is, how much you've wined and dined your potential client, or how well your proposal captures your value proposition. These are all huge factors in the success rate of your proposal. But even before you get into these subjective aspects of winning or losing a RFP, it's important to look at the simple numbers game: the straight odds of your chance at winning a RFP.

The varied levels of Requests for Proposals

Understanding the base-level odds of a RFP "competition" is one of the most important first steps in evaluating your chances to win a RFP, and should always be a factor in your go/no-go decision tree. And by base-level odds, we mean understanding exactly how many people you're up against.

The sole source invitation (aka they only asked you)
You were the only firm invited to submit a proposal. Just you. It's still a RFP because they're asking you for a proposal, but it's hardly "competitive" in that you're not bidding against a competitor. And yet you are. You could be your own worst enemy in this situation by not taking the RFP seriously and giving them a full and professional response. This is certainly the situation where you have the highest chance of winning, just don't blow it by being too casual. 99% odds of success? Don't be the 1%.

The small list of pre-qualified vendors
You likely have had a long pre-game strategy, making friends with the vendor and perhaps earning their trust in some way, or perhaps you're one of a select few local vendors, or one of a handful of vendors that do what you do. Your chances of winning are pretty high based strictly on the numbers as, more than likely, it's you and four other companies. 20% odds of success? 33% odds of success? You don't have many people to beat out, take it very seriously.

The long list of invited vendors
You might have discovered the extent of the "invited vendors list" when the issuer "accidentally" publicly CC'd everyone on an update. Upon seeing this list, you might have gotten a sinking feeling in your gut, OR you decided to do some reconnaissance and see the quality of the other vendors. This obviously can vary, and more than likely has a low, single-digit odds of success.

However, your reconnaissance work could turn up some interesting facts than you can use to your advantage and increase your straight odds. For example, you might discover that you're the only local/close-proximity vendor, or your product has an advantage that none of your competitors have, or some other way of setting yourself apart from the crowd. Low odds of success, but there might be some silver linings here.

The publicly announced RFP
The Hail Mary RFP. The long shot. The one where, if you choose to respond, it's because you have nothing to lose and you'll be shocked silly if you win. But at the same time, the upside potential makes it worth while for you to give it a shot. Stranger things have happened! There was a large website project a few years ago for the City of Austin that was publicly announced and individually sent to over 200 firms.

...228 notices were sent out to prospective Web development companies and three proposals were received back...
City Chief of Staff Anthony Snipes said the two other companies that submitted proposals were based in Austin. However, the proposals from those two firms were both over $1.3 million, and one of the companies was later deemed non-compliant.

Only 3 firms responded and a contract was issued for a $700,000 project! That Hail Mary proposal, the one I'm sure was relegated to an intern as it had almost 0% odds of winning, turned up to be one of the only 3 proposals submitted and one of only two conforming proposal received.

Other possible outcomes include the vendor receiving 200 proposals, then short-listing 5-10 vendors, and requesting more detailed proposals. We've even seen vendors get asked to not participate as vendor to win the project, but instead to help the issuer evaluate the proposals or to run a new process. Long odds, of course, but still possibilities.

Knowing the odds

As we mentioned earlier, understanding your odds of success in winning a RFP before the "subjectivity" of your proposal and sales strategies are factored in is key to improving your RFP win rate. Don't buy into the "I won't play unless I'm the team captain" approach that will have you never bidding on RFPs.

Just play the game knowing the odds.

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Update on 11/12/2013

In case you needed another example, here's a good one: the City of Baltimore's website redesign project. Only 8 companies submitted and the proposals ranged from $68,000 to $840,000. Assuming they throw out the top and the bottom, a project in the $400,000 to $600,000 would likely have been a finalist.

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