Strategic Pricing: Turning The Price To Win Into A Winning Bid Price (06-17-15)

My last two commentaries provided a high-level overview of the Price To Win (PTW) process and how information should be leveraged and husbanded to inform and support present and future capture campaigns. This time I am going to dwell on Strategic Pricing, the process that turns price targets derived from PTW into winning, yet profitable, bids.

In addition to the usual pricing ingredients (e.g., costs and margin expectations), Strategic Pricing consists of two serial activities: Pricing Strategy development and Price development.

Pricing Strategy development documents the price-related specifics of the pursued business opportunity and acts as the blueprint, or plan, for price and price proposal development. This plan is a compendium of pricing strategies and tactics deemed applicable to various elements of the bid, the rationale for selecting them, and an overview of their expected effects.

Price development executes the Pricing Strategy plan, provides fully gamed inputs for the bidder's price tables and models, and implements the results within the government customer's bid structure and price model. The process involves applying the strategies and tactics identified in the Pricing Strategy to one-time costs, variable costs and required uplifts.

The Pricing Strategy should undergo peer review and refinement to ensure the strategies selected are both appropriate to the opportunity and acceptable (e.g., within corporate risk parameters) to management. CAI/SISCo offers a Strategic Bid Pricing service our clients use to develop a Pricing Strategy or sharpen an existing one. Our service examines both the business opportunity and the bid and uses our strategy library to locate strategies that are appropriate to the bid type, labor elements, and other opportunity elements that need to be priced.

Next time I will delve into the importance of keeping tabs on competitive labor rate trends and, at some point in the future, the realities of Forensically-Based Bid Pricing. To request training information, a PTW proposal, or to buy a book, please contact:

• Sherby Weinberg for PTW Professional Development Training - her phone number is (301) 717 9718 and her email is sweinberg@caisisco.com; or
• Rich Brown for a proposal to do a PTW study on a specific opportunity - his phone number is (301) 704 1289 and his email is rbrown@caisisco.com.

My PTW Book - Hope Is Not A Winning Strategy... ... But Price To Win Is - is always available from Amazon as are copies of the other books in our Roadmap To BD Success Series. If there are any other issues related to pricing strategies or bid price development that you would like to discuss please call me, Tony Constable, on (301) 807 8171.

Good luck, and happy hunting!