What is a Price to Win Strategy?

Proposals must be priced competitively to win. It’s a simple statement, yet too often, it can be overlooked.

Pricing is one of the most significant scoring components in every bid and the only objective measure that companies have complete control over. The best-performing companies understand the importance of competitive pricing to winning solicitations and strategize accordingly.

Price to Win Strategy is the industry best practice process in proposal management and capture management for competitively pricing proposals with an eye on winning solicitations. This blog post defines Price to Win Strategy, how the best companies utilize it to capture business, and how to implement it at your company regardless of your size and expertise.

What is a Price to Win Process?

Price to Win Strategy is an industry best practice tool that involves back and forth between the customer’s requirements, competitive intelligence, and internal solution architecture to craft a solution at a price that can win.

Although the name is “Price to Win,” it could also be thought of as Customize to Win. Price to Win Strategies prioritize crafting solutions for the customer that meet their requirements at the most competitive price. Price to Win Strategies take into account the customer’s scoring criteria to determine whether they should design a low-cost solution or should design something more robust, which may lose some points on pricing but will gain them back on the technical evaluation.

This means companies that employ this pricing strategy work to avoid submitting their standard pricing and offering and instead tailor their solution to each customer’s specific needs in an attempt to maximize their total scoring on the solicitation.

How do Price to Win Strategies Work?

Design a Minimum Viable Solution

To begin, the Solution Architect, or someone filling a similar role, must understand the minimum requirements of the prospect. They should then design a solution that can meet the minimum requirements of the prospect at the most affordable price and communicate this price to the team. This will be the starting point for the proposed solution.

Determine the Target Price

Next, the Salesperson will provide input on the desired price range of the prospect, while pricing and competitive experts will estimate what competitors are likely to bid. If an RFx has already been issued, the Proposal Manager and Capture Manager might also give feedback about how pricing will be scored. The team will then decide the optimal price needed to win.

Decide if the Target Price is Viable

If the Price to Win is well below the cost of the minimal solution, it might mean the opportunity needs to be qualified out in a Go/No-Go Decision (AKA Bid/No-Bid Decision). There’s no point investing additional time and energy into a losing opportunity. If the Price to Win is at or above the cost of the minimal solution, then the team should move on to the next step.

Consider Adding Features to Optimize Scoring

If the Price to Win is above the cost of the minimal solution, then the team might consider proposing a more robust solution at a higher price to improve the scoring they’ll receive based on additional criteria of the prospect. The best-performing companies will analyze how many points they’ll gain by adding a feature against how much they’ll lose by increasing the pricing.

Decide on Optional Pricing or Alternative Proposals

Finally, the team should also consider moving some of the scope or features into an optional pricing category. This allows teams to satisfy as many requirements as possible while keeping their bid price low. This strategy also enables reviewers to consider both the low-cost solution you offer as well as the more robust version.

Depending on the solicitation rules, this might also be time to consider submitting alternative proposals with more robust pricing and solution options. This way, you can submit a lower-cost bid and still give the prospect options to understand your preferred approach.

Download the Guide to Modern Proposal Management eBook to Learn More

Want to learn more about how the best-performing companies optimize win percentage, reduce stress, and capture more revenue? This eBook breaks down the best practices of the most successful proposal management functions and translates them into useful insights for companies of all sizes.

Download The Guide to Modern Proposal Management eBook to learn four key strategies to help you win smarter:

1. 1. How to Implement a Disciplined, Documented Proposal Qualification Process
   2. How to Design & Implement Win Strategies to Create Winning Proposals
   3. How to Run a Color Review System
   4. How to Track the Most Impactful Proposal Metrics