Revenue comes from securing contracts, which makes winning bids a leading indicator of business health. That’s why we measure proposal success in the first place.
Typically proposal success is measured as new sales, revenue growth, etc. If we’re in sales management, we’ll also track closing ratio, win rate, or whatever we’re calling the percentage of wins to bids submitted.
More visibility into business health is always better than less.
So, it’s the win rate (my preferred term for closing ratio) that we want to take a closer look at.
The Number Win Rate
First, there’s the win rate based on the percentage of wins to bids submitted. It shows success based on number of bids.
This is great for bragging rights, which can help increase, or maintain funding to your sales group. Let’s face it, we get far more credibility for sales efforts when we can claim “$78 million secured @ 73% win rate” (shameless plug: this is my technical proposal writing success rate for clients).
The Dollar Win Rate
However, there’s a second win rate. This one’s based on the percentage of dollars secured compared to total dollars bid. My dollar win rate for clients is 59%, which means of all the dollars my clients bid, only 59 out of 100 were secured.
Sounds less impressive than winning 73 out of a 100 times (my number win rate), doesn’t it?
The dollar win rate only comes into play if your customers award less than the full amount bid – but this happens frequently in large bids.
How Do You Measure Proposal Success?
Are there better measurements out there? Tell me how you measure proposal success, post your comments and feedback here.