The two most common pricing mistakes we see are:
Often businesses, or the individual in charge of tenders, will focus on pricing for a tender separately from the overall bid strategy. Plucking a number out of the air is not a pricing strategy, there is always a need to understand the drivers behind your prices. Pricing should be part of a comprehensive decision-making process and agreed upon following the implementation of an overall bid strategy.
When setting prices, you should ask yourself:
Knowing the competitive environment and the key drivers for the customer are paramount to making good decisions. The prices need to balance your chances of success with the value derived for the contract, which won’t be possible if you don’t give your pricing the time and contemplation it deserves.
There are ways to look at this in more detail. For example, from our contract award database we could provide you with information about who specific contracts were awarded to and their values. From here it would be possible, by looking at the spend reports from individual public sector authorities, to start estimating how much incumbent suppliers are charging for their services. This type of analysis can help prevent your pricing strategy from being a shot in the dark.
If you are interested in using contract award data to inform your pricing strategies, you might be interested in our Competitor Tracking Alerts. Not only do we offer a five-year archive of contract awards, you can also track an unlimited number of competitors and receive alerts whenever they win high-value public contracts.