By Michelle Golden - Q. How do we know if our firms' success (win) rate with proposals is at, above, or below average? For that matter, what is the industry average for CPA firms?
A. My answer will apply philosophically to law as much as to accounting. As to a CPA industry average proposal success rate, a number like this isn't meaningful as it never compares apples to apples. There are just too many variables!
Consider different vertical markets. NFPs or governments almost always require formal proposals with most going out to bid at regular intervals. But businesses, especially the highly-desirable closely-held business market, will often close a deal over lunch or golf game and the "proposal," if it exists at all, might be a formality that accompanies the engagement letter.
If a comparison were made, I might suggest comparing a vertical market (construction, NFP, etc) to other firm's success ratios in those markets. But, I still don't think it will be very meaningful without knowing things for the compared proposals such as:
- Was the firm the incumbent?
- Was a personal relationship in existence?
- Did personal contact take place before answering an RFP?
- If so, how much contact? And what was the quality of that contact (i.e. was it private, one-on-one? In person? By telephone? At a widely attended pre-bid conference? etc)?
- How focused was the proposal on the prospect (customer-centric) versus the firm?
- Did the proposing firm demonstrate they really understood the prospect's situation and needs?
- Did the proposing firm meet the requirements of the RFP and have the experience to truly qualify for the work?
- Was the firm already widely known as dominate service provider to that industry?
- Was it a newly entered vertical market?
- Was the proposal professional-looking, user friendly and free from typos and other signs of negligence in preparation?
- Did the person presenting the proposal do a great job of demonstrating competence and trustworthiness? (or leave some seeds of doubt...?)
Any or all of these things will weigh significantly in the outcome and that is why I don't think a CPA (or law) industry comparison is worthwhile.
The best benchmark is to measure the firm against itself now and later. In the meantime, study existing processes to determine where your firm could use some improvement in the above areas!