How to implement a Price to Win process

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How to implement a Price to Win

processAlex King, Amplio Software

July, 2014

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1) Who needs Price to Win?2) 5 step Price to Win process

• Step 1: Strategic Competitive Intelligence• Step 2: Customer Need & Buying Analysis• Step 3: Tactical Competitive Intelligence• Step 4 & 5: Price to Win Review

3) Final Thoughts

Contents

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• Some industries bid repeatable products and services and the competitors pricing strategy is observable from historic data. Price to Win is for those of us that don’t.

• This methodology is for you if price might equal something other than cost plus profit margin.

Who needs Price to Win?

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• Before we can get started on modelling a Price to Win, we must understand the factors that will shape it

• We will analyse:• Strategic Competitive Intelligence – the company level

trends that influence strategy. This is how competitors like to sell.

• Customer Buying Behaviour – This is how this customer likes to buy.

• Tactical Competitive Intelligence – how our competitors bid teams will try to win this bid.

5 step Price to Win process

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5 step Price to Win process

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• Your competitors start a bid with a legacy that will constrain their options and future strategy

• They aren’t going to unwind their corporate strategy & cost-structure for this one bid so we need to understand how these will narrow their options

• Competitors either have good references of similar work, or they don’t

• They’ve either sold to this customer before, or they haven’t

• They either have the capacity to deliver the work without expanding, or they don’t

Step 1: Strategic Competitive Intelligence

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Step #1• Create a Bidder Comparison Matrix (BCM)• This is based on your Strategic Competitive Intelligence

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• Step 2 is about converting these references and credentials into value for the customer

• Value is something the customer is willing and able to pay for

• This difficultly of this task is that different parts of the customer community will send mixed messages

Step 2: Customer Need & Buying Analysis

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Step #2• Create a Evaluation Method Assessment (EMA)• This is based on your customer information and competitive

intelligence

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•By Step 3 we know what most competitors would prefer to offer and what the customer would prefer to buy

•We need to consider the exceptions to the rules. Often tactical competitive intelligence will conflict:

• You might hear that a competitor is going to be very aggressive on price because they see this as a ‘must win’

• At the same time, you check their annual accounts to see they’ve run up losses for the last two years which suggests they will bid more conservatively

Step 3: Tactical Competitive Intelligence

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Step #3• Conduct a Black Hat activity• This is based on your tactical competitive intelligence

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• We should now have a view of our competitors strengths and where they would like to compete

• We should know our customers procurement strategy and which bidders this favours

• We can model the options the competitors bid teams have to respond to these constraints

Step 4: Price to Win Modelling

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Step #4 & 5

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• We now convert these options into a Price to Win model

• Our Price to Win White Paper explains how to categorise competitors strategies and interpret the implications

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• If this sounds like a lot of effort, that’s because it is. But honestly, compare the cost of an analyst with the appropriate tools to the cost of losing bids for predictable reasons. The return on investment is a no-brainer.

• Amplio offer services to help companies with Price to Win• Advanced Price to Win Training and Coaching & Mentoring for companies

looking to enhance their internal Price to Win capability • Price to Win as a Service for companies who want to buy a high-quality,

external service avoiding the overhead of an internal capability

• If you want to find out more about the details of implementing a Price to Win process then download our White Paper here.

Final Thoughts

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• Thanks for reading. Check out more of our blogs at: http://www.ampliosoftware.com/blog

• Connect with us on LinkedIn• Tweet us on Twitter• Email us at: [email protected]

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