Why Is Strategic Pricing So Important to a Bid?

By Marsha Lindquist on October 24, 2022


Most contractors approach strategic pricing like it is an afterthought. It isn’t if you want to win. Plain and simple there can be nothing more important to a proposal than the pricing. Because pricing too often is a deciding factor in the win, (even if it is low price technically acceptable) it stands to reason that it should take center stage. Rather than the approach which too many contractors take “now that we have finished the technical response, let’s get the pricing done,” choose to do what makes sense. Get a strategic pricing approach as part of the capture process.


Strategic Pricing Plan


We often hear that a contractor must win an opportunity. But the focus on developing a strategic pricing plan is left to the end and without much thought to what will get the price to the right target. If money is everything to a bid, and it is, then devote your attention to your strategic pricing. To think money is not important is foolhardy. What is your process for establishing pricing in your organization? Here are the three most important strategic pricing processes.


The Processes


First, start early. Engage the pricing team in the capture stage. That means you start your strategic pricing planning and actions before the RFP comes out. Otherwise, you have begun too late.


Second, engage the entire pricing team. This includes pricing specialists, outside consulting for the price to win, competitive assessment, and pricing strategists, along with the finance and accounting staff, capture team, proposal team, human resources, and procurement – add these people to the executive management team to bring in the importance of pricing to the forefront.


Third, begin assessing the deliberate choices you have to consider and the long lead items necessary to dig into the details. Be generous in choosing all the elements necessary to make an informed decision.


If you do just these three actions, you will be ahead of your competition.


Also check out this article about preventing High-Price Sensitivity as well as our services section on Pricing Strategy Development.


Learn more strategic pricing tips from Marsha on our next New Normal in Government Contracting!


About the Author

Marsha Lindquist is an experienced pricing strategist & contracts professional. In her groundbreaking #1 Amazon Best Selling book, Secrets of Strategic Pricing for Government Contractors, Marsha Lindquist delivers the wisdom of strategic pricing for Federal proposals. Marsha has built a tradition of quality consulting for Government contractors for over 30 years. She has wide-ranging experience with Government contracting firms–mostly scientific & high technology companies. Marsha is adept in persuasive pricing that wins & is masterful in authoring customer-focused winning pricing strategies. She is described by clients as tenacious and a true pro. Marsha has achieved the distinguished titles of NCMA Fellow, APMP Fellows & APMP Professional (CPP) as well as Future of Pricing Honoree by ProPricer. Marsha can be often seen hiking with her dog Ziva -a young Australian Shepherd with lots of energy. Connect with Marsha on LinkedIn and Twitter.