If you ask almost any development professional who has done more than a few proposals what they consider a relevant external benchmark for success you are likely to hear the conventional wisdom that a 30% success rate is about average. In other words, if your organization wins one award out of every three proposals submitted, then you are performing on par. Most organizations have their own internal data, but invariably when someone – a Board member, one of the senior executive team, or even business development (BD) team member – asks how internal performance on proposals compares to external benchmarks, that’s when the omnipresent 30% appears.
What’s the source of the 30% success rate? The 30% success rate has been the rule of thumb for decades, despite significant changes in the funding environment and competitive landscape. Multiple sources reference 30% success rate among federal contractors, including past Deltek’s Engility Surveys. A recent survey of 30,000 federal contractors by Richard Wagner Co. references a 0-30% win rate for public sector contractors. This data is drawn from all U.S. Government (USG) agencies (so primarily domestic) and contractor-focused. In 2004, a Foundation Center survey of 878 grantmakers found that 35% of respondents funded 50% or more of the grants received, which is not exactly 30%. Additional data on foundation success rates are here, but that data is from 2004. In short, there is no regular, reliable, and relevant source of benchmarking data for international development implementers.
If that is the case, then why do we keep using 30% as an external benchmark? We default to 30% in part because external benchmarking is so useful. Benchmarking, the practice of comparing business development processes on common metrics, can provide useful insights. For example:
- How does our organization’s business development performance compare to the sector as a whole at a point in time?
- How does our organization’s business development performance compare to the sector over time (e.g. we tried to improve our structure/process/staffing, how did our success rate change as a result relative to industry average)?
- How our performance varies with trends over time (e.g. our organization’s win rate has been decreasing over the last three years; is that happening to other organizations as well)?
If that is the case, then is this a useful benchmark? Here is the caveat. Win rates vary based on donor type, specific donors, incumbency status, region, sector, and overall funding trends. A large organization that bids on every Request for Application (RFA) will not have the same win rate as a small business that bids very selectively. Win rates, and other BD metrics, are a little like fingerprints. They will reflect distinct business models (e.g. contractor vs. foundation-funded NGO), pursuit strategies, and experience. This doesn’t mean that benchmarking is irrelevant, just that this is one data point among several and should be analyzed with thought.
How do you find the useful benchmarking data? Be a part of it! Humentum is launching a Business Development benchmarking survey to collect and distribute BD data. The survey results will help our members thoughtfully analyze the data and provides the context that is needed to usefully draw conclusions about their own BD efforts. This will provide more relevant external benchmarking information and help all of us determine if the 30% is fact or fiction for the sector. Of course – a survey is only as strong as its participants and we encourage all of Humentum’s members to join. Click here to register for our upcoming webinar about our new survey and click here to pre-register for the survey. Results will be distributed to participating members only. We guarantee privacy, confidentiality, and protection of data.
Bio: Bea Bezmalinovic Dhebar has over 25 years of experience working as an international health and development consultant. She has worked in more than 26 countries in Latin America, Asia, and Africa, including six years of overseas residence. Her consulting practice includes strategic planning, market research and analysis, and business development, including business development training, management improvement, and proposal development. Ms. Bezmalinovic has worked with organizations of all sizes, across different sectors, and with a variety of donors. She has worked on proposals ranging from $100,000 to $1 billion. As an independent consultant, her goal is to help international development organizations cultivate more intelligent business development practices.