Value-added is something you may see being requested in RFPs and if not, you’re likely trying to figure out how to provide it in your proposals. The simple question is what ‘value added’ really means and whether it will have material impact on your proposal.When it comes right down to it, so-called value-added in a proposal should really be your competitive advantage. However, if it looks like it’s important to the client that you provide ‘value-added’, or the value-added is part of the evaluation criteria or scoring, you need to find things that the client will consider value-added.

This sometimes ends up being a pricing issue – what you want to provide as value-added services, and how much they impact the price, if at all.

Unless it’s explicitly identified how value-added services or features will influence the client to select you as the winner, assume that any value-added items you provide will simply give you the edge in the existing evaluation model.

Your main goal is to clearly demonstrate your capabilities and the fact that you’re the best choice to provide the requirements identified in the RFP.

Value-added can be the icing on the cake. However, you do need to consider the costs and impacts value-added may have on your final proposal price, and the impact on evaluation scoring. Start by focusing on ‘value-added’ that is simply part of how you operate your business efficiently.

If you can provide value-added without having a negative impact on your proposal price, either through technology, volume or efficiency, simply identify the value these items provide, and explain the results for the client.

Don’t make the mistake of pulling things out of your normal service and calling them value-added unless they’re clearly value-added items. This will be apparent to the client and cause you to lose credibility.

So here’s an example of successfully using ‘value added’ to win a proposal:

An RFP specifically required adhering to current practices, which were very manual and not assisted by a computerized system.

The pricing structure was for management and administration only, with the direct costs of labor as a flow-through to the client. This meant a computerized system would have added costs to the price, but the direct cost savings were not considered in the evaluation. Adding the computerized system would have been value-added, but the higher price would have lost the bid.

The bid was submitted with the base requirements, however the capability and experience of implementing and using a computerized system to drive efficiencies and reduce direct costs was clearly identified as a ‘Value-Added’ benefit to the client, without actually delivering it.

After the bid was won, the client requested implementation of a computerized system at the client’s cost. This strategy helped win the bid.

Here’s another, less successful example.

In a consulting RFP, where the scope was very open it left lots of room for so-called ‘added value’ for the client, most of which, as usual, came at a price. The bidder assumed the client wanted lots of added value and so their proposed scope included not only the base service, but many value-added elements. Clearly, the strategy was flawed, however, since it resulted in a price much higher than the winning bidder’s proposal, who probably simply priced a basic, workable scope of work in their proposal. Either that’s all the client actually wanted or all they could afford.

The message is that value-added doesn’t always need to be incorporated within your base price. One way to structure a proposal with significant value-added items is to provide an optional service with optional pricing.

Some RFPs will ask for options while others will not. Regardless of whether the clients ask or not, if you have some attractive options, you should propose them. Make it clear that they’re separate and distinct from your main proposal. Be sure to read the submission requirements carefully to ensure this approach won’t disqualify you.

This issue is why you need to develop your strategy around the entire bid process, including the technical solution and the pricing. It’s how you win more business.

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