In this series of posts, I am addressing the common errors that occur time and time again when writing bids. Below is our 3rd post and will address the following mistake:
Not knowing how your pricing fits into your strategy
Often businesses, or the individual in charge of tenders, will focus on pricing for a tender, but there is a need for a more comprehensive decision-making process of which price is only a part, albeit an important one. In other words, agreeing one number is not a strategy. A price should be agreed upon following the implementation of an overall bid strategy and not the other way around, or in isolation from the bid strategy. These are the main issues we see, where pricing is either decided on its own, or looked at too late and not aligned to the offer as a whole. Either approach isn’t fit for purpose as there is always a need to understand the drivers behind your prices.
For example, you should ask yourself:
- What is the context of your chosen prices in regard to your entire offer?
- Are you able to offer unique value adding services or are your competitors able to offer exactly the same?
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 going back five years. 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.
For my next post, we’ll look at the the issues associated with leaving things to the last moment.
In the meantime, if you’re looking for specific help with your bid, please get in touch. Every week I help clients with their tendering, from bid writing to leading on bid responses. Use the details below to view the range of services we offer or to contact me directly.