“It is wiser to find out than to suppose”. – Mark Twain
Many organizations and capture leaders understand and appreciate the value of Price to Win analysis in enhancing Pwin. Unfortunately, some view Price to Win as a standalone activity that does not require Competitive Analysis to support it. For those who are not familiar with Price to Win, it is more than a number; it reflects the complex relationship between customer needs and budgets and bidder solutions and strategies. It represents a tradeoff between price and capability that forms the foundation for successful bid strategies.
Therefore, Price to Win is based on data and assumptions about the customer and the competitors. So where does that data come from if not from Competitive Analysis? Oftentimes, capture teams believe they already have all the answers thanks to their years of experience in a given market– but this often leads to a rude awakening when they lose to a surprise competitor or an unexpected strategy. There are questions that must be answered– questions as simple as:
- Who is the customer (decision-makers AND influencers), and what are their hot buttons?
- Who are the competitors?
- What are the competitors’ capabilities? solutions? strategies? discriminators? strengths and weaknesses?
There are also more complex questions that are more specific to a Price to Win– questions such as:
- How will the customer calculate the total evaluated price?
- What are the competitors’ cost structures?
- How do competitors plan to bid in terms of teammates, locations, and aggressiveness?
- What component pricing data is publicly available to help develop the bottom-up cost estimate?
These are all questions that Competitive Analysis can help answer, and as Mark Twain said, “It is wiser to find out than to suppose.” Early engagement in the procurement process allows more time to gather competitive intelligence and identify additional questions that can further increase win probability.
Competitive Analysis allows an understanding of customer requirements and the ability to craft solutions that beat the competition. This allows for an independent assessment of the competitors’ capabilities, strategies, and potential solutions.
As organizations approach Price to Win, it is important to remember that price is NOT simply cost + profit, as most tend to think of it. More accurately, price = cost + strategy. This makes Competitive Analysis the other strategic half of a successful Price to Win process. It is nearly impossible to develop the optimum strategy to position your solution without both.
For more information about Competitive Analysis or Price to Win, contact Richter & Company, and we’ll be happy to help you take the guesswork out of a potentially winning solution.
