The Price To Win

You would be hard pressed to go through a Deal Review and not have this as a question asked by one of your Executives or teammates. What do you think the Price to Win is? In general, we will always be guessing, but some guesses are more informed than others.

The research surrounding this topic is interesting. If we were the ones who had the vision for the client and created the opportunity with them, then with a business case for change and a compelling ROI, you actually create some price elasticity. Even if you are the high priced vendor in the deal, if the business case creates a good commercial outcome for the client, then your win rate as the visionary goes up by 68% according to CEB. If you showed up at RFP time and are in demand reaction mode, then you should expect not to win and to also have significant price pressures to even be considered in the deal.

If you help create the opportunity through the status quo disrupting education you bring to the client, you are also driving the criteria towards the unique value that you deliver. Think about the scorecard the client [or the consultant they hire] may use to judge those that they invite to the party. If we are going to be successful, that scorecard needs to acknowledge the value adds that we bring to the table. A head nod is one thing, but if we truly provide things of value, then there should be some form of economic acknowledgement from prospective clients. One of our clients does something very unique as part of their implementation process. They staff the “go live” part of the project in a way that provides real value to the client. It is also something no competitor could match even they wanted to copy. If you have several of these value adds; if the client acknowledges the value, then it should create some price leverage come negotiation time. Of course the client will conveniently try and forget or negotiate around these facts. The same holds true if your competitor has unique value adds and this will negatively impact your price to win.

The more you know, the better positioned you will be to answer this question. For many of you, you compete against consistent competitors. You will determine the ranges of their pricing and how they position themselves. If you are a student of the game, you will learn how to compete against those competitors and continually adjust. Your understanding of your deal positioning from the internal stakeholders within the client organization gives you more information to both answer the question and adjust your positioning. When your CEO or CFO ask the question in that Deal Review, even though we may be guessing, we want to be able to provide a fact based answer that supports your win strategy, what you believe is required and why. We need to be able to understand the impact of the business problem we solve, the unique value we add, our competitive positioning and how the prospective client is making the decision to be able to determine the Price To Win. In the absence of the above we risk either guessing or being commoditized.

Tagged under: