1. Timing is everything
When I first started working on pricing bids for RFPs in the IT industry some 20 years ago, there could be as much as 6 months to respond depending on the magnitude of the request. Nowadays, it’s fairly common to see a hefty RFP with a deadline requiring a response within four weeks. Talk about pressure!
Well, even long ago when there was half a year to develop a big proposal, pricing was always done at the last minute. The technical solution was pulled and tweaked right up until the last possible moment and then thrown over the fence to the pricing team. Up until that point, we never even saw the thing.
Doesn’t sound like such a great job right? How can we possibly determine what a saleable, profitable, and deliverable price is when we have half a day to evaluate the project and come up with a number? Even worse, some executive has determined that the price is too high an hour before the submission is due and wants to slash the bid by 15%. On what basis has this been determined? What evidence is there to support this discount? Since it’s far too late to confirm or deny these numbers, the bid goes in with a price that no one can confidently support or justify.
The lesson from this: pricing must be top of mind as soon as you consider responding to an RFP. In order to price your proposal effectively, your pricing strategy needs to be included in every step of the development process, from the qualification stage to the final moments before submitting your bid. The bid price is an exchange rate that must support the services offered in your response, so don’t deliver a Rolls-Royce solution and price it like a VW Beetle just to win the business.