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Price To Win (PTW) - Designed To Yield A pWin of 1 (12-10-2008)

Business developers and salespeople the world over use win probability (pWin) to provide their management with a (more) realistic view of the discounted value of the opportunities in their pipelines. pWins for viable opportunities are expressed as percentages ranging from say, 10% on the low end (a pWin of .1), to 100% (a certainty, or a pWin of 1). Time-phased revenue forecasts are functions of each opportunity's pWin and its likely value, duration and burn rate.
It must be said that pWin development processes can range in sophistication from the proverbial wetted finger against the wind to detailed and weighted analyses that increase in intensity as opportunities accomplish key capture activities and seek to pass through more and more stringent capture process gates. Regardless, pWins for viable opportunities should improve over time and reflect improving win probabilities.
What does this have to do with Price To Win (PTW)? Simply put a PTW team's job is to develop the price they believe the Home Team needs to bid to achieve a pWin of 1, all competitor evaluation factor scores considered. PTW analysis, as practiced by CAI/SISCo, involves 3 discrete phases that produce the following views:
  • Phase 1 - where all competitors are likely to score for non-cost evaluation items and target their bids relative to the addressable budget;
  • Phase 2 - how a subset of targeted competitors are likely to size, cost and price "bottoms up" bids with "partial gaming" applied (e.g., productivity curves, etc.); and
  • Phase 3 - how the Phase 2 subset of targeted competitors are likely to "fully game" the Phase 2 sized, costed and priced "bottoms up" bids.
The fact of the matter is that each PTW view produced and presented to the Home Team has to show what it is going to take to beat the competition. In essence, this means that the PTW results produced as a result of each PTW phase have to represent pWins of 1. Producing a PTW result at any stage that provides a pWin of less than 1 is less than useful.
Good luck and happy hunting!
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