Hotels have always relied on RFPs (requests for proposals) to drive revenue. Meeting planners request additional information, properties respond, and they can determine the best venue for their needs. But are we approaching RFP responses most efficiently?
If your sales team responds to every RFP without prioritizing high-value leads, you could waste time and lose inbound business. Let’s examine how the traditional RFP process has changed and how to adapt.
What is the RFP Process?
The RFP (Request for Proposal) process helps event planners find the right venue for their group events. Here’s how it works:
- The event planner starts the process by specifying their event requirements, such as the number of attendees, dates, meeting room specifications, audiovisual needs, accommodation, catering, and budget.
- Hotels respond with detailed proposals showing how they meet these needs. They include pricing, availability, amenities, and their experience with similar events.
- If a proposal meets the planner’s needs, both parties begin negotiating contract terms, including pricing for meeting space rental, group room rates, and potential vendors.
This process allows event planners to compare multiple hotels and choose the best venue for their event.
The State of RFPs
Current RFP win rates reflect a highly competitive landscape in the hospitality industry. But with the use of digital platforms and advanced analytics, hotels can submit more targeted and customized proposals. Despite this, win rates remain a challenge.
- According to a survey of 1,500+ RFP teams, the average RFP win rate across all industries is 44%.
- In the hospitality industry, RFP win rates are reported between 5-7%.
- Factors influencing win rates include the quality of the proposal, response time, the strength of client relationships, pricing strategies, and availability.
- On average, companies source 33% of their sales revenue through deals involving RFPs.
Remember, these statistics paint a general picture. RFP response rates and win rates can vary depending on factors like hotel size, location, and target market. However, understanding these industry benchmarks can equip you to develop a data-driven RFP strategy and increase your chances of securing those lucrative hospitality deals.
It’s Time to Rethink the RFP Process
Speed shouldn’t be the greatest factor in hotel RFPs. It’s time to build processes around RFPs that reflect a deeper understanding of the account and your hotel’s ability to close the business.
The traditional RFP process might look like this for sales teams:
- A salesperson assigned to the account or the segment checks availability (maybe a few sets), runs a rate past the revenue manager and responds to the RFP within 2-4 hours.
- Then, they wait.
- If they are lucky, they hear back from the meeting planner and learn they didn’t get the piece of business.
- If they are fortunate, they win the business.
Instead of having salespeople send proposals out into the void, you should implement an RFP process that uses account-based data to make informed decisions.
The new process might look like this:
- Your team identifies a single point of entry for RFPs.
- Cross-check your occupancy with inbound RFPs to prioritize the accounts most likely to fill need periods. If the timing is not right, move on to a better qualified lead.
- To do this, you will need a tool to help you understand their buying behavior.
- Next, you assign a priority level. A perfunctory rate, dates, and space response is appropriate for those with a low likelihood of booking. However, if you’re responding to a higher-priority RFP that aligns with your offerings, consider a more robust offer that showcases your value relative to others.
- Once you receive an RFP, assign follow-up to the appropriate salesperson. Those with the highest possibility go to a hunter, and those with a lower probability might stay with the RFP contact to help them establish their own pipeline.
In addition, here are some tips to help you keep your proposals and RFP responses organized:
- Add all RFPs to your sales and catering system (not just those you think you can win). This will help you better understand the volumes and accurate close rates.
- Track the probability of booking in your sales and catering system. This might need to be added as a custom field, but it’s worth it. When you start going through old leads as a source of business, you don’t want teams chasing lower-probability opportunities. Identifying this at the point of entry will make it easier in the future.
- Track the lost business reason in your sales and catering system. This needs to be specific to RFPs. Great examples include “chose another venue,” “no response,” etc. Understanding the underlying cause of lost business status will help prioritize how your teams follow up on leads as possible future opportunities.
- Implement a cadence on all Closed/Won business to go beyond the singular win to capture more wallet share (where applicable) from the account.
4 Tips for Winning More RFP Proposals
Winning RFPs in the hospitality industry hinges on understanding your audience and crafting compelling proposals. Now that you understand how to improve the RFP process, let’s examine some additional tips for winning more bids.
1. Implement the Proper Sales Tools
If you haven’t invested in tools beyond the traditional CRM platforms and list builders, your sales teams may be overwhelmed with inbound leads and confused about how to identify qualified group business with the highest probability of booking with your property.
Look for tools that can consolidate data and present it in a way that doesn’t overwhelm sales staff. These systems are essential to your RFP toolkit:
- Automated prospecting tools can empower sales teams to work more efficiently, optimize their outreach efforts, and focus time and resources on high-potential leads.
- Account-based selling tools provide high-level account details to help you personalize outreach. You can also track past RFPs awarded to your competitors to understand what resonated with the client.
- Customer relationship management (CRM) systems track past interactions with your clients, revealing their preferences and buying habits.
2. Understand Your Market
Market intelligence platforms aggregate data on industry trends, competitor activity, and account insights. By understanding the market landscape, you can tailor your proposal to address specific needs and demonstrate a competitive edge.
Additionally, guiding your hotel sales strategy with market trend data is a powerful way to reach the right leads. By analyzing market segments and industries, hotels can pinpoint where there is potential to increase market share, assess how their property compares to competitors within these segments, and determine areas of strength and weakness.
3. Develop a Proactive Sales Plan Using Data
Identify the top opportunity accounts in your market and develop a strategy to target them using data. For example, with an account-based selling tool like Knowland Classic, you can source highly relevant but hard-to-find account leads matched to your property, prioritize high-quality leads in the sales process, and access competitive set event data.
4. Train Your Team
Formalize training processes for selling, using the tools available to your team, and pivoting as needed. Leverage relationships with your vendors to facilitate training and analyze product usage to ensure you get your toolset’s total value.
RFPs aren’t going anywhere, but our industry must improve its RFP response process. So, follow up on them and grow wallet share afterward.
Streamline Account-Based Selling with Knowland
By wielding the right tools, streamlining your process, and implementing winning strategies, you can transform your RFP responses from necessary tasks to winning opportunities. Remember, a well-crafted proposal can mean the difference between securing a lucrative event and missing out.
If you’re ready for less time-consuming RFPs and more time for strategic sales using data like event history, chain scale preferences, hotel brand preferences, meeting size, and much more, request a demo with our sales team today.
