As you may be aware, every year QorusDocs conducts a survey of key stakeholders employed in the proposal management field to gain insight into the current trends, challenges, and opportunities impacting the RFx response landscape.
For our 7th annual benchmark research report, we reached out to professionals across proposal roles, IT, sales, business development, marketing, and C-suite leadership roles to gather input from individuals and teams involved in creating proposals or responding to RFPs, RFIs, DDQs, and security questionnaires. More than half of the surveyed companies earned $10M+ revenue in 2021 across a range of vertical markets: technology, professional services, financial services, and more.
This year’s study uncovered actionable data and key industry benchmarks for:
- Win rates for new and existing business
- RFP volumes and revenue generation
- Key challenges of response management
- The size of missed RFP revenue opportunities
- Tangible benefits of automating the RFx response process
- Key technology that insiders find most useful in the creation of RFx pursuits and presentations
To help you translate this data into practical insights to guide and refine the response process in your organization, we picked the brains of Nora Navin—our resident business development leader with specialized expertise and experience in professional services, including 13 years with EY and four years at international legal powerhouse Baker McKenzie—and our fearless leader, Ray Meiring, CEO and co-founder of QorusDocs. Let’s walk through a few highlights from the research:
Onwards and upwards
2022 was a bit of a tumultuous year—rising inflation, the threat of recession, labor shortages, geopolitical unrest, the Great Resignation, supply chain disruptions—yet companies were not deterred. Despite the economic uncertainty, our research confirmed that organizations were still sending out large numbers of RFPs in support of new projects they were undertaking.
In fact, more than 50% of respondents said they received a higher volume of requests in 2022 than in 2021—and they saw higher win rates as well. While the increase in RFP volume in 2022 was a slightly lower than the increases we saw in 2021, companies continued to work hard to build pipeline and create winning RFx responses.
Notably, the biggest gains were reported in companies who were already fairly busy with RFPs. Seventy-three percent of organizations completing more than 31 RFP responses in a month—that's more than one per day—reported an increase in RFPs (median increase of 27%) coming through the door; similarly, 62% of companies completing 11 to 20 RFPs in a month experienced higher monthly RFP volumes (median 24% increase) in 2022.
These rising RFPs volumes are not a surprise: as purchasing processes become more intense, complex, and formalized and companies facing cost pressures become more price-sensitive, single sourcing—a direct award of a contract—is becoming more and more rare. Indeed, the use of RFPs to drive the purchase process is becoming increasingly common, especially among professional services firms (e.g., legal, consultancy, accounting).
Amongst QorusDocs professional services and legal clients, there’s been seen a shift over time from a very heavily pitch-oriented process to the increased use of the RFP process, with many discussions around how RFPs are critical in the process of organizing content and workflow.
“At QorusDocs, we’ve heard from our professional services and law firm clients that while relationships are still an important element, the process is becoming more formal. A lot more work is being won through an RFP or a formalized procurement process, and things like panels for external legal services are on the rise.”
-- Ray Meiring, QorusDocs CEO and co-founder
“Existing business” win rates buoying the bottom line
This year’s benchmark study found that win rates for new business were stable or increasing (although not as strong as 2021). The good news is that 48% of the companies we polled reported an increase in win rates in 2022, with another 37% reporting stable compared to 2021. And although the median dropped by 5% from 2021 levels, we’re still hovering around a 40% win rate for new business in 2022.
Notably, many large companies, especially in professional services, typically aren’t pursuing new clients; they’re going after additional business from existing clients, building on relationships with current customers to drive revenue—and it’s paying dividends. The 2022 research found that 38% of all respondents had a win rate for existing business of more than 70%!
With new business revenue starting to tighten up as we head into the second quarter of 2023, bidding on opportunities with existing customers is a smart revenue strategy. Notably, RFP win rates for existing business averaged 62%—more than 20% higher than those from new business (although still a little bit down from 2021).
“As a professional services team leader, my goal (and the goal I wanted my team to set for themselves) was a win rate of about two-thirds. So 62% is nearly right on the mark—and exactly what I would want to be seeing from existing business.”
-- Nora Navin, Business Development Leader
Content management challenges continue to rear their ugly heads
Content development continued to be a major challenge for proposal and bid teams responding to requests in 2022. Updating expired and old content (46% of respondents) and creating new content from scratch (42%) were the most common challenges.
Unsurprisingly, companies are still wasting time locating content (36%) and redeveloping the content they couldn’t locate (33%), while struggling to organize content to respond to requests (32%) and collaborate effectively (23%). And it’s no secret that spending unnecessary time and resources to create proposals, pitches, and RFP responses is detrimental to top- and bottom-line performance.
“We see this issue every year in our research: time-consuming, error-prone, and labor-intensive manual processes continue to hinder the ability of teams to respond to RFPs effectively and on time.
Even in a simple scenario, such as updating the total number of employees in a firm (that needs to be updated in multiple places), attempting to make these changes manually takes time and effort. And you’re always wondering if you’ve remembered all the places that need updating.”
The good news is that proposal management software enables you to automate the workflow to be able to centrally manage key statistics that your organization may want to propagate throughout its content. You can update once and see it updated everywhere across your documents. Or when it comes to more complex content, you can put workflow processes in place to either reactively request updates to that content—which may need to be done on the fly—or proactively through a biannual or annual review cycle.
“Checking with four different departments before you can use a piece of content, or trying to dig a bio off of a partner’s desk or out of his assistant's files, is very tedious. Keeping old information out of the hands of partners going rogue was a challenge in itself! Having a single source of truth for your data helps tremendously with the content management issue.
Having worked on both sides of this scenario—in large organizations with tens of thousands of pieces of content that did not have technology and large organizations where we did implement proposal automation technology—I can say everything gets a whole lot better when there is technology.”
Microsoft Word: fan favorite
2022 was the first year we asked respondents about the tech they’re using to create responses and which tools have the biggest impact on the efficacy of the response process. Microsoft Word was the fan favorite of bid and proposal teams, with half of companies wanting to spend as much time within the familiarity of MS Word as possible.
When responding to a request, companies reported spending an average of 41% of their time in Microsoft Word, 18% in Microsoft Excel, and 16% of their time in Microsoft PowerPoint, vs. spending 9% of their time using Google Docs. In fact, Microsoft 365 was the clear winner for generating response documents, accounting for 80% of companies’ tool of choice.
“It’s not surprising that Microsoft Word stands tall in this category. It’s such a powerful tool that many of us have been using for years. If we care about how our proposals and RFPs look, and we are responding to longer format questions and/or including images, grid layouts, callouts, diagrams, color and style, Word makes the most sense. Why would anyone want to build an RFP response in a tool that doesn’t support this level of formatting and familiarity?”
We also asked respondents about collaboration tools and the data showed that many organizations relied on Microsoft Teams in 2022. In fact, 61% of companies indicated that their use of Teams increased over the past year, while nearly half said they don’t use Slack or Skype—definitely a trend we've seen increase over the years. Indeed, Teams is becoming fundamental to companies’ collaboration: more chats, more discussions, more meetings, more files being stored in Teams.
Benefits of Proposal Management Software
Organizations surveyed reported numerous benefits using proposal management software—from automating their response process, collaborating more effectively, and improving the quality of the response documents to experiencing an increase in speed, completed volumes, and win rates.
“In my experience as a leader, it's the aggregation of these benefits that makes the biggest change in our pitch departments, and in business development in general. The combined benefits allow partners to spend more time on client-serving activities, on billable hours; it allows account managers to spend more time with the client and enables the pitch team to do a better job, improving the quality of the document because they're not just throwing it together and shoving it out the door.”
Although 71% of respondents found that “quality of responses” improved with proposal automation software, it’s often an underestimated benefit. In fact, proposal management software gives you a window into how content is being used and which content is winning. You can see content that is missing or outdated, or not used. The technology also helps identify which subject matter experts (SMEs) are responsive and who is contributing content to the re-usable library. All of these insights hone the effectiveness and quality of the responses and, ultimately, drive up the win rate.
Gauging the impact
Given the economic uncertainty as 2023 unfolds, companies need every advantage they can get to help boost revenue and protect margins. Driving win rates up is the goal of every bid and proposal team—and creating professional, accurate, and personalized response documents is the crux of a successful bid.
For those companies using proposal management software, this year’s survey found a median impact of 48% improvement in time spent managing content, 47% median improvement in gaining client feedback, and 46% improvement in the quality of responses. The data also revealed a 45% improvement in ease of collaboration and 40% improvement in time spent working on requests. We also saw good median improvements in volume of requests, cost of proposal generation, deal velocity, and RFP win rate.
From a bottom-line perspective, our research found that proposal management software had a positive impact: 37% median increase in deal velocity, 25% increase in win rates, and 39% median improvement in the overall cost of proposal generation to help maximize net profits.
Proposal management software has proven to be a competitive differentiator, helping companies thrive despite economic turbulence, pandemic-induced supply chain disruptions, and the geopolitical upheaval that has characterized the past couple years.
"What’s not reflected in this data is the impact of technology on the morale of my team. Giving my team new things to learn and cool technology to work with contributed to a happier, more stable team. We experienced much lower turnover and team members were able to do a better job at their job. Indeed, there was a marked difference in the way my team performed and behaved post-technology implementation. "
We’ve touched on a few of the 2022 benchmark research highlights here but I recommend you watch the webinar recording to hear the full conversation and in-depth commentary with Ray and Nora. And if you want to get up close and personal with all the statistics, tables, and graphs, download the 7th Annual QorusDocs Proposal Management Benchmark Study.