Strategic pricing® is a set of deliberate choices, management direction, informed decisions, and mindful actions.  Most companies skip these steps and move directly into attacking pricing as if filling out the pricing sheets the Government has requested is all you have to do to get the price right.  Pricing strategy involves more than that.  Let’s talk about what some of those key winning actions and decisions might include.

Early Pricing
We always want you to begin pricing strategy early in the proposal process.  That is, during the capture phase or the pre-RFP stage. Wise companies always do that. For example, by taking action to begin pricing during this time will allow your company the opportunity to gather customer and competitive data, obtain multiple vendor quotes for long lead items, and analyze your company business base for changes you may need to make for this bid – these are just a few.

Winning Price
A winning price takes all of the actions and decisions into consideration, not just wrap rates and profit. Deliberate actions typically include executive management as well as team members participation and discussion.  These might include planning to bid some costs that are traditionally indirect costs as direct costs, examining the use of uncompensated overtime, or weighing and determining alternative courses of action for various high risk items into the pricing strategy.

Value Proposition
Most companies overlook the serious importance of presenting the value your organization adds to the customer. Always ask yourself if your customer cares about the added value you want to propose and price. If these items or services something your customer does care about, find out in advance if they are willing to pay for them, or are they making your company less competitive by including them. If the customer care about them, showcase the features and benefits to them in the cost proposal with an eye-catching chart and add the money you will be saving them.

Don’t let Pricing Keep you Up at Night.

Marsha Lindquist
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