How To Create A Winning Proposal: Strategies & Procedures For Competitively Responding To RFPs. An OPEN MINDS Market Intelligence White Paper

Transcription

1 How To Create A Winning Proposal: Strategies & Procedures For Competitively Responding To RFPs An OPEN MINDS Market Intelligence White Paper July, 2013

2 OPEN MINDS Market Intelligence White Paper How To Create A Winning Proposal: Strategies & Procedures For Competitively Responding To RFPs White Paper Prepared By OPEN MINDS OPEN MINDS is a national health and human service industry market intelligence and management consultation firm. Founded in 1987 and based in Gettysburg, Pennsylvania, the 75+ associates provide innovative management solutions designed to improve operational and strategic performance. Learn more at York Street Gettysburg, PA Telephone: openminds@openminds.com Website:

3 Executive Summary Companies have long used Request for Proposals (RFPs) to procure vendors for specific services. However, as RFP issuers grow so too does the bidding process, which is beginning to become more prominent in individual company s business models. In 2012, Government health and human service procurements totaled 13,265 resulting in 6,520 annual rewards and 5 billion dollars in revenue. So far, in 2013, solicited RFPs have accumulated more than half of last year s total with over 4 billion dollars in contract awards! Purchasers of services are increasingly subcontracting their business to organizations promising to perform those services with more focus, more efficiency, and with less cost. This growth in RFP use, however, is double edged. It presents a great opportunity to expand your customer base, add a new revenue stream, and measure yourself against your competitors; but, as purchasers increase service solicitation, vendor responses are becoming increasingly competitive. A successful proposal response must contain several indispensable elements to remain viable in this shifting market. This paper will present the strategies and tactics necessary to create a winning proposal and grant your organization competitive access to this RFP landscape. It can take a significant amount of time, resources, and effort to track, evaluate, respond to, and win competitive procurements. So, how much should your organization devote to these RFP response activities? Investing in proposal writing and maximizing the return on that investment (ROI) depends on comprehensive planning. This planning begins with defining your organization s criteria for evaluation: structured opportunity analysis is critical to resource management. Establishing criteria for evaluation services, geographies, customers, price range can help quickly sift through opportunities. A more thorough review of the RFP language then leads to the assessment of whether or not to develop a response. The decision to move forward is rapidly followed by a rigorous proposal production process including strategic positioning of your organization, the creation of the technical and pricing proposals, and the final production phase. This paper is a comprehensive guide to this entire process: from organizational preparation to the signing of a successful contract. It will offer your organization insight into the proven methods for successfully adding proposal based marketing to your receipts. 1

4 OPEN MINDS Market Intelligence White Paper I. Business Organization Incorporating competitive procurements to your organization s business model requires some strategic preparation. Long before you begin bidding on potential contracts, it is vital to establish bidding criteria! If you throw your darts at every target you see, you ll have expended them all by the time the best target comes around. It is wise to be selective! Define Your Organization s Pre-Established Criteria Outlining base level criteria is your first step toward identifying which opportunities to pursue. It allows you to frame your organization s goals and capabilities. When you begin tracking competitive procurements, you will become overwhelmed without this window of consideration. Service Line define what services and products your organization is capable of offering. What is your organization s expertise? What experience and qualifications do you possess? Review your marketing plan and your goals and clearly outline specific services which could match up with RFPs. Geography define your organization s regional limitations. How far are you willing to travel to facilitate a service? How much in expenses are you willing to incur? What unique, local expertise can you highlight about your organization? Know your limitations. Purchasers define your organization s target audience for consultation. Bidding opportunities exist in the government (local, state, federal) and through private organizations (foundations, insurers and care management, employers) and each have unique challenges. What audience is your organization most qualified and most comfortable working with? Financing and Price Points clarity in understanding your desired pricing structure and price range is essential. When identifying potential cash flows, it s necessary to know which procurements will contribute to your profit margin and which will be a waste of time and resources. These standards set a framework for evaluation. Once you define them, they are, of course, flexible, but it s important to establish your primary filter. Once your organization structures that window you are ready to enter the RFP landscape. Scoping the Landscape: Developing Your Network There are two distinct ways to begin building your proposal-based marketing network: both are important. The first is through access to information, news, and alerts. Tracking is a fundamental necessity of competitive procurement. Your organization needs to be able to view the thousands of RFPs in the market to begin considering and bidding on opportunities. There are several options to tracking these procurements: develop a list of business opportunity web sites, subscribe to newsletters and opportunity services, or subscribe to RFP tracking services. Tracking services, such as the OPEN MINDS RFP Hotline, significantly reduce the time and effort spent on searching and briefly assessing opportunities. The second method for building your network is through pre-selling. Building a relationship with the purchaser is a major tactic toward winning a contract long before an RFP is even issued. The marketing and sales divisions of your organization should establish early contact with a potential funding source and consistently position your organization as a strong business partner and solution. Once an RFP is released, contact with the issuer is severed. Use the prior relationship to test assumptions, communicate propositions, ask questions, receive feedback, and re-position your organization. Occasionally, a strong relationship with an issuer may even lead to your team assisting in the development of the RFP requirements and subtext. Pre-selling is the earliest opportunity for your organization to establish its competitive dominance. Your relationships and tracking services provide content for the evaluation process. Your organization must be poised to assess new opportunities as rapidly as they are released. Have established templates ready to facilitate an easy, smooth evaluation and writing process. You should also have your organization s biographical and demographic information ready for easy insertion. Finally, organize your evaluation and response process with clearly defined roles and responsibilities. This structured approach will standardize the response practice. 2

5 II. Structured Opportunity Analysis OPEN MINDS Market Intelligence White Paper The tracking of RFPs and establishing of a network is complete. As a multitude of opportunities are presented, it is going to be necessary to filter and condense. This is a two-step procedure: the initial phase is the sifting using only your organization s pre-established criteria. Selectivity pays off and will diminish the viable opportunities significantly for the more thorough review. The formal opportunity analysis is the gateway to successful RFP response production. It finalizes with the critical decision of whether to proceed with your organization s positioning for response. Remember, the more thorough your evaluation, the better prepared your organization is to meet the purchaser s demands. 1. Opportunity Analysis Checklist Who is the customer? Opportunity analysis begins with 2. What is our previous experience with the customer? exhaustive research and a strategic 3. How many covered lives or potential consumers? reading of the RFP. It is time to break out the colored highlighters 4. What is the service area? and parse out the specifics required 5. What is the product or service? by this procurement. It is foremost critical to understand the requested 6. Do we have the capacity? (Can we get the capacity?) scope of services and the required 7. What are the financial terms? experience. Use a review template to quickly and efficiently identify all 8. What is the start date/ contract term? necessary information from the RFP. 9. Who are the incumbent vendors? This review memo should be dispersed to all involved team members in your organization to familiarize them with the customer, the services requested, the experience necessary, the likely competitors, the proposal due date and the criteria used to evaluate your organization s response. The research 10. Who are the likely competitors? 11. When are RFP-related questions due? 12. What proposal preparation is necessary? 13. When is the proposal due? 14. What are the evaluation criteria? at this phase should also include a review of previous proposals that succeeded with the purchaser. Do not hesitate to submit any outstanding questions to the purchaser through their procurement officer and consider attending the bidder s conference. The analysis primary focus should be a review of submission instructions and evaluation criteria. Submission instructions tend to dictate the required format of your organization s response and the due date. Determine immediately if that due date is feasible. Evaluation criteria provide a checklist for your team to ensure all necessary information can be performed. Evaluation points typically include: experience, capabilities, financial strength, implementation plan, and price. The point distributions also allow your organization to do an honest score assessment. This is a time for organizational reflection and honesty. Before beginning the positioning period, decide if your proposal would even be considered. Analyze your competitive strengths and weaknesses. If your organization can effectively deliver the services being requested, has the prior experience and references that attest to this capability, can offer a structured plan, and is a viable alternative to competitors, then it is time to move forward. If not, then this procurement should be rejected. This decision is the final call before devoting time and energy to proposal production and that makes it very important! 3

6 OPEN MINDS Market Intelligence White Paper 1. Client/Purchasing Organization: 2. RFP Title: 3. RFP Issuing Organization: 4. RFP Number: 5. Proposal Due: 6. RFP Contact Person(s) & Contact Information: 7. Dates Of Pre- Proposal Activities: 8. Final Date For Letter of Intent to Bid: 9. Evaluation Criteria: 10.Minimum Qualifications: 11.Service Parameters/ Description: 12.Geographic Service Area: 13. Contract Start: 14. Contract Term: 15. Incumbent Vendors: 16.Vendor Requirements: 17.Summary Of Scope of the Work & Brief Program Description (elements): 18. Pricing Parameters: 19.RFP Related Questions: 20.Proposal Prep Instructions: 21. Proposal Outline: OPEN MINDS RFP REVIEW REPORT FORM Last updated: February 18, 2013 Example of an RFP Review Emplate

7 III. Developing a Winning Proposal OPEN MINDS Market Intelligence White Paper The opportunity analysis, as mentioned, is the determining factor as to whether an RFP enters into response production. After an affirmative decision is made, the rigorous proposal development process commences with the initial positioning phase. Initial Positioning Positioning is the process of creating an identity for your organization and its services so that your response is differentiated from competitors. This positioning strategy is grounded in competitive advantage and theme. This begins with determining the purchaser s current perception of your organization. If you spent a significant amount of time preselling with the RFP issuing agency, this perception may already be well developed. Differentiation is the most important aspect of positioning. There are many different options to present your organization as distinct: reasonable price, added value to provided services, knowledge of local markets, diverse and unique experiences, attribute differentiation, political attractiveness, low risk, and the list goes on. Define an exclusive advantage and establish yourself as the favored organization. Another aspect of positioning includes the development of a Win Theme. The evaluation process is very important in this aspect. The opportunity analysis phase should have given great insight into why the RFP was released and what the purchaser is looking for. Use this knowledge to develop a theme that has value and aligns with the RFP criteria. The theme should articulate your distinct position and how it is advantageous toward the purchaser s needs. This theme should be repeated throughout your proposal: state how the theme impacts the organization and the proposal content. In writing your proposal, consider developing a catch phrase; repeat the theme in the executive summary, the cover letter, the proposed methodology. This cohesive approach depicts your organization as a much more attractive candidate. The final piece of the positioning phase is a return to the RFP evaluation criteria and scoring guide. Understanding where points will be awarded allows you to prioritize your proposal writing and accentuate your strengths. Develop a winning strategy that aims to maximize the number of points in each evaluation section. Technical and Price Proposal Creation Phase The outlining and writing process begins with pricing and cost estimation. From your initial preestablished criteria, you already have a mandatory price benchmark. Review the pricing information set forth in the RFP, determine the purchaser s budget and use target costing principles to fine tune the cost toward a competitive, profitable level. Your pricing analysis should include level of effort estimation. Determine the necessary project activities and deliverables as outlined in the RFP scope of services and assign team hours to those actions. As your organization estimates level of effort while minimizing cost, you will be able to determine the best approach. This will provide the framework and individual components to use in the writing of your response methodology. It also provides structure when beginning the technical proposal. 4

8 OPEN MINDS Market Intelligence White Paper Begin the technical proposal by assigning a project manager. This manager should be in charge of proposal production. The manager should begin with an organizational matrix. This matrix should outline all sections in the required format along with all identified and assigned tasks and a set timeline for proposal completion. Be careful to select the proposal team carefully: some members should be seasoned with experience in the specific requested service, others should have standardized roles. All writers and contributors should then receive a memo informing them of the Win Theme and the necessary information to be included in each section. This is also a great opportunity to jumpstart final production: have team members begin early organization and copying of required documentation and attachments. Once the proposal tasks have been organized, writers assigned, and a timeline set, simultaneous writing and development should commence. Writing becomes the most important part. The proposal now becomes a canvas where you prove your comprehension, experience, capabilities, and proposed approach. This is where you let your competitive positioning and theme establish your success. There are several aspects to consider when writing: Introduction and Proposed Answer state the problem and offer declarative answers immediately. The proposal should serve as a mirror to the RFP issuer; accommodate them by restating their requested service. Let the purchaser know that you understand them! Then concisely show them how your solution answers their needs. Benefits of Your Solution provide the purchaser with a best value approach to their requirements. Again, your strength is in differentiation and theme: clearly express why your organization is different and optimal. Features of Your Solution be clear in the project activities, the proposed deliverables, and estimated timeline and throughout highlight the unique competitive advantage that your organization offers. Statement of Scope within your methodology, provide specific details on how you will fulfill every aspect of their RFP. Relevancy when outlining your organization s qualifications, use appropriate experience. Illustrate your expertise by picking similar projects where you have worked with similar purchasers. This is important for your proposed team as well. Throughout the technical proposal, be persuasive and customize! Be forward, specific, concise and avoid unnecessary technical verbiage. If your organization follows these elementary rules and effectively implements competitive positioning and theme, your technical proposal will be marked for success. Content may be key, but if a proposal is disorganized and obscure, then the procurement evaluators will not read it. The writing is the first of three steps in proposal creation. An editor is just as important to a successful response as the writers are. The editor s first task is to ensure customization. The cut and paste database dump may be easy, but it will not likely procure a contract. The editor should verify 5

9 that all information is tailored to reflect the new customer. Then is the arduous line by line comparison of the proposal to the RFP requirements to verify format, check for correct documentation, and ensure the inclusion of all mandatory vendor obligations. Often, simultaneous writing of the technical proposal leads to disparities in style. An editor should be mindful of stylistic consistency and be prepared to revise these technical differences. The final review should include checks for format, spelling errors, and grammatical incongruities. Finally, the edited proposal should then enter a multi-tiered review phase. The proposal team is theshould make initial edits and perform another requirement check both content and mechanical. Next, verify that all OPEN MINDS Market Intelligence White Paper Keys To Successful RFP Responses Identify key decision makers & influencers. Know your prospect (their goals, hopes, & fears). Do a brutally honest assessment of your competition and your organization. Take advantage of opportunities to influence the requirements, build relationships, & position your organization. Determine & clearly communicate your unique selling proposition. Develop capabilities you need to be competitive. Identify & bid your target rate. Have a work plan for proposal production, assign sufficient resources to get the job done, & have a senior person accountable for results. Respond to all RFP requirements & make your proposal reader-friendly. 10. Don t miss the deadline! questions are answered, that all information is accurate, that the proposal is persuasive and that the proposal theme is incorporated throughout. It is important to submit the proposal for a formal peer review and lastly, a red team review. This red team lends fresh eyes to a long process and can offer finishing insight. Production Phase The final phase in the proposal production process is production itself and that begins with graphic design and aesthetics. Content may be key but if a proposal is disorganized and obscure, then the procurement evaluators will not read it. Persuasion is not done solely through writing; it comes from first impression and appealing visuals. The first thing that is noticeable about a proposal is how good it looks. Develop a graphic theme and implement it; begin on the cover and format the style throughout your proposal. Add graphics, photos, illustrations, charts, and call out boxes to highlight key points. These visuals will serve to accentuate your organization s quality and care and can also emphasize your approach. Great visual organization may not show up on an evaluator s score sheet but it intrinsically differentiates your proposal from the competition. The proposal should now be ready for finalization and shipping. Most importantly, plan ahead. As soon as the deadline is known, schedule the shipping date for arrival the day before. Your organization should schedule finalization of production two days prior to the shipping date to account for unforeseen glitches or additional time. Read the proposal for specific packaging instructions. RFPs typically include instructions for number of copies, electronic versions, shipping labels, and even details as tedious as paper and binder types. This is the final step before submitting the winning proposal for evaluation so it necessitates careful appraisal and quality checks. Remember, production is the opportunity for your organization to outshine other submissions. Follow RFP instructions and dedicate time to visual organization. 6

10 IV. Closing the Deal - The Waiting Game Proposal evaluation takes time. In the interim, find a way to leverage relationships with your network. However, ensure you do not violate any rules regarding agency contact. Seek support from relevant references and relationships. Additionally, use appropriate venues to position yourself with targeted customers. This is also another reminder to pre-sell. If your organization implemented these tactics prior to the RFPs release, your proposal submission may already be at the top of the pile. OPEN MINDS Market Intelligence White Paper The submitted proposal may require another round of competition known as the Best & Final Offer (BAFO) Process. Occasionally this is necessary to further distinguish competitors for the purchasing agency. Other times BAFO is used simply for clarification or preliminary negotiation. In either case, the process may require preparation for written, oral, or panel discussion follow ups to the original submission; and, unfortunately, there is now greater pressure to stand out. Documents are released when entering into the BAFO process that includes follow up questions and instructions. These documents are just as important to read as the initial RFP. Do a thorough review of the BAFO requirements and review your submitted proposal. Identify any potential areas of change, carefully construct your answers to written or presumed questions, and be prepared to reduce your price. This final competition requires just as much preparation and could result in a valuable contract and business relationship. 7

11 OPEN MINDS Market Intelligence White Paper V. Diagnostic Analysis The ultimate goal, of course, is the signing of an actual contract with the purchasing agency. As you pick up the pen and commit your organization to this new business relationship, you will add a new revenue stream, establish a new opportunity for continued client engagement, and set your standard for a winning proposal. You will have succeeded in implementing strategies and tactics for successfully responding to competitive proposal-based marketing. Congratulate yourself when you win and use the winning proposal as a guide for future RFP endeavors. Perform a post-mortem on winning and losing proposals. Sometimes even the best, comprehensive, strategic proposals lose in this competitive market. Use this as a diagnostic opportunity! Research and become familiar with proposals that won and lost and determine ways to do better next time. The OPEN MINDS RFP Hotline provides copies of successful procurement contracts that are worth studying. Identify missing components in your process and consider implementing them. Continue to also do research on purchasers: determine their goals and objectives and familiarize your organization with their specific requirements. Studying and reorganizing after a loss is a critical method to remaining competitive. As you pick up the pen and commit your organization to this new business relationship, you will add a new revenue stream, establish a new opportunity for continued client engagement, and set your standard for a winning proposal. RFP tracking, evaluating and developing is a demanding process. It requires a reorganization of your business structure and a dedication of time and personnel resources; however, it is a growing opportunity for increased revenue and business relationships. As the market shifts and purchasers turn to RFP procurement for services, develop a strategic approach toward your proposal development, stay competitive, and maximize your success. 8