What should be your Performance Measures in Proposal Development?

In effective proposal development, the goal should always be to provide superior products or services of value to the customer.

According to Bob Lohfeld, the founder and president of the Lohfeld Consulting Group, Inc., too much proposal development does not have superior products or services of value to the customer as its primary goal.  He recommends that businesses use the following performance measures in proposal development to ensure the delivery of great products and services:

  • A high return on overall investment:  dollars won per dollars invested.
  • The right risk/reward ratio:  attaining profit margins and revenue targets is more important than the win rate.
  • For the Proposal Manager and proposal team:
    • Management by objectives.
    • Peer review.
    • Customer satisfaction.
    • Executive assessment of the proposal.
    • Compensation aligned with achieving business objectives.

Lohfeld recommends that Proposal Managers and proposal teams not use win rates as a performance measure for several reasons.  First, Proposal Managers and teams rarely get to select bids.  And second, it is more important to reach revenue targets and profit margins than it is to win contracts.

The overall goal should be to achieve a high return on proposal development – that is a high ratio of dollars won compared to dollars invested in proposal development.

If you have this kind of goal orientation, you are likely to develop a high-performing proposal development approach to bidding on contracts.

1 Comment

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    February 29, 2012

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