The Great Win Rate Debate
A colleague recently posted about win rates and posed the question of whether win rate was a fair assessment of a Proposal Manager’s performance. It’s an interesting question since it seems to be such a huge focus in our industry, and I was surprised by how many individuals seemed to favor the metric. But here’s the Catch-22 of being a Proposal Manager: Proposal Managers can certainly be the deciding factor in a proposal loss; however, winning the proposal is frequently very much out of the Proposal Manager’s hands. This is because proposals are won during capture.
An Argument for Capture Rate
The first problem with measuring proposal or capture professionals based on win rate alone is that win rates can be misleading, especially when it comes to impact on a business’s revenue and bottom line. Let’s say your team loses one large proposal worth $500M but wins three small proposals worth $10M each. In this instance, your win rate is fairly high (75%), but the impact to revenue is fairly low ($30M). In this example, you’ll see that the capture rate is actually quite low as well ($30M/$530M = 6%).
Now let’s say your team wins that one large proposal worth $500M but loses the three small proposals worth $10M each. In this instance, your win rate is comparably lower (25%), but your capture rate is significantly higher ($500M won/$530M pursued = 94%). In this example, the $500M in wins does much more for the company’s overall business performance than the $30M in wins from the example with the higher win rate.
Sometimes the Capture Team has Little Control
Another problem with measuring proposal or capture professionals based on win rate alone is that sometimes the capture team has little control over the win or loss. In some organizations, it is fairly common for business development executives to assign out opportunities, often allowing very little time for any sort of capture or preparation. In these instances, the capture team has no control over the opportunity shaping, so win rate is not a fair assessment for the proposal team OR the capture team. However, in this case the win and capture rates would certainly be a fair assessment for the business development executives driving the poor business practices and results.
Starting Points for Assessing the Business Process Health
Capture and win rates are great starting points for assessing the health of a business development organization. If you notice low win or capture rates, you can start to assess the reasons why you might now be winning. Start with the evaluation debriefs from the customer. If the debriefs cite problems with compliance, then it may be that the process is breaking down at the end, when the Proposal Manager takes the reins. However, if the debriefs cite problems with the solution or lack of customer understanding, it’s much more likely the problem starts much earlier than the RFP drop, during the business development and capture phases.
Problem #1: Not Starting Early Enough
One reason win rates may be low is that you’re not targeting opportunities early enough. Long-term planning provides corporate awareness of upcoming opportunities aligned with strategic goals. Once opportunities are targeted, Capture Managers should begin gathering customer, opportunity, and competitive intelligence. Remember that building a relationship with the customer and understanding their underlying concerns takes time. Without solid customer relationships, the team won’t have the opportunity to understand the customer’s programmatic concerns or determine what really keeps them up at night. Further, the team won’t be able to develop solutions to meet their needs and vet those solutions prior to the RFP release. Once the RFP is released, the Federal Acquisition Regulation (FAR) limits customer interaction, so it’s too late for effective opportunity shaping and solution vetting.
Problem #2: Not Documenting the Capture Intelligence
Another reason win rates may be low is that the capture intelligence isn’t being documented. How often have you entered the proposal phase with an incomplete or nonexistent capture plan? I’ll use the analogy of baking a cake. If the ingredients you put into the batter are rotten, or you leave out a critical ingredient, what kind of cake will result? If the capture information feeding your proposal is similarly bad or incomplete, you can expect a comparable proposal product.
The capture plan is a critical document for transferring knowledge of the customer, opportunity, and competition to the proposal team. Even if a company begins a pursuit with sufficient time, if the capture intelligence is never documented, it’s very unlikely that the business intelligence will ever make it to the proposal. An effective Capture Manager builds the approach and win themes around intelligence gathered and documented during the capture phase and clearly documents this information in the capture plan.
Problem #3: Not Making Make Smart Bid Decisions.
Another reason win rates may be low is that the company is making poor bid decisions. This is a hard one for many companies because it is so difficult to ignore the sunk costs that have gone into a pursuit; however, smart executives will not discount the opportunity costs of developing and submitting a proposal with a low probability of win. Remember to reassess the bid decision once the RFP is released and during key proposal and/or gate reviews. Critical questions to ask include:
- Does the opportunity fit your business plan?
- Do you have an excellent customer relationship?
- Do you understand the customer’s goals, issues, and requirements?
- Do you have/can you get the people to support the requirement?
- Do you have the required experience/past performance? Can you team if not?
- Do you have the required corporate commitment and resources?
- Do you have a committed proposal team? Can you augment your staff with consultants if not?
With a live RFP, if the answer to any of the above is NO, you should think long and hard about pursuing the opportunity at hand. In addition to lowering your overall win and capture rates, consistently pursuing opportunities with low probabilities of win is an ineffective use of resources, which can burn out your staff, lower morale, and result in increased proposal staff turnover.
Although they shouldn’t be used as the only measure of success, capture and win rates are great starting points for assessing the health of a business development organization. If you notice poor performance in these areas, you can start to assess the reasons why you are not winning. If customer evaluation debriefs cite problems with compliance, then it may be that the process is breaking down at the end, when the Proposal Manager takes the reins. However, if the debriefs cite problems with the solution or lack of customer understanding, it’s much more likely the problem starts much earlier than the RFP drop, during the business development and capture phases.
The Proposal Manager is just one player in the game of winning. Business development and capture professionals must lay the right groundwork for a smooth transition to the proposal team. In addition to focusing on the proposal strategy and implementation effectiveness, make sure you start the pursuit process early enough for the Capture Manager to develop relationships and shape the opportunities. Use a strong gate review process that validates that the Capture Manager is documenting the right solution elements to set the proposals up for success. Finally, ensure that your gate review process has the right checks and balances to result in smart bid decisions. Remember, you can’t attribute your wins and losses to the Capture Managers or Proposal Mangers alone. Proposals are definitely a team sport!
Written by Ashley Kayes, CP APMP
Senior Proposal Consultant, AOC Key Solutions, Inc. (KSI)LinkedIn