In an earlier blog, I listed the 12 step process you should use to develop a winning bid and in my last podcast, I talked about the Strategy Session and Kick-Off steps. If you missed it, visit my website.

Now, I’m covering Step 5 – Pricing. While my book focuses on the written proposal response, Pricing is obviously important, not just from a price perspective, but because it drives your overall strategy and your solution.

While a well-developed, persuasive proposal is a prerequisite for winning a scored RFP response, pricing could be the tipping factor. The RFP approach used by the client can provide you with insight on how this will factor into the final decision and how to develop your overall strategy. Whether the client will take the price as-is or negotiate with a preferred proponent is the key issue to identify.

Understanding the pricing structure and considering what level of detail the client is asking for and why will also help you with your approach. Sometimes details are requested to verify that you adequately priced the service delivery, and wise clients won’t want to award a contract to a company who won’t be able to afford to provide the necessary services.

For some services that are very labor-based, asking for the proposed hours and the related labor rates lets a client to reverse engineer your pricing and make sure you’re pricing the full service you’re proposing.

Asking for pricing details is also a way to more appropriately compare different bidders and facilitate negotiations on pricing.

Although you need to clearly understand the pricing model, the client expects that as part of the proposal submission and you will provide it to them in the format and structure they require. However, you may want to propose an alternate model based on your own experience and advantages.

The pricing model in the RFP may be based on what the client feels comfortable with for best pricing, and so that the client can get information they can use for the negotiation process.

There may be better ways to handle pricing that reduces risk or makes service changes more flexible. In addition, if your product or service approach is different, there may be pricing models that make them more attractive.

By making an alternative proposal, and clearly identifying the reasons for it – as long as it isn’t prohibited in the RFP – you could have the advantage.

It’s important, however, to provide pricing in accordance with RFP requirements to avoid being disqualified or disadvantaged. If a client doesn’t get what they expect and can’t compare you with others the way they expect, the client may not look favorably on your approach, even if you have a compelling reason for your alternate methods.

From a strategic perspective, if you feel that your costs and therefore your pricing won’t be the lowest, take the time to explain it in your proposal in a way that makes the reviewers question the other lower bids.

I’ve just covered Step 5of the 12 step process. In my next podcast, I’ll deal with Step 6 – Your Service Solution

Our Book "Win More Business - Write Better Proposals". is now available at Amazon in many countries, including the USA , Canada, UK, Japan, Germany and France. You can also order it directly from the author on this website