Key DataPricing strategy must begin with your organization’s overall business plan and company philosophy. How you dissect the business plan and segment that plan into specific opportunity data elements will spell the difference between knowledge and wisdom about the bid or ignorance and shooting-from-the-hip type pricing. Without appropriate and fact-filled data, your pricing will be unfocused and will not win. Gather data and your decision to bid will be better informed.

What data?
The data you gather should be focused on the three types – the customer, your company, and your competitors. With this type of data, you can feel more confident you know more about the bid than your competition. What information should you gather?

Customer
• What are their program objectives regarding the price as a factor, i.e., low price, best value?
• What value adds, if any are they seeking?
• Discover their budget range or their price targets
• What is the price to win?

Company
• What is already in your business base – customer agencies, type of work, size of work?
• What will you do with this bid – is it a recompete or a new piece of work – how are you willing to impact the business base to achieve a win?
• What are the creative changes to your organizational pricing structure you can do to achieve a win?
• What is your current indirect rate and direct labor rate structure look like?

Competitors
• How can you obtain competitive historical data – do you develop yourself or get outside support?
• What is the competitive assessment look like for this bid?
• How much analysis of the competitors’ pricing have you done?
• Have you accomplished a black hat review?

Remember data factors are part of building the background you need to make a wise bid/no bid decision as well as to position your company executives with information that will build into a strong pricing strategy = winning price.

For more on this topic see:  https://richterandcompany.com/services/strategic-analysis/

 

 

Marsha Lindquist
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