Dropping your price is one of the easiest ways to try and win business when times are tough. Although price concessions can be valuable in winning business, they often don’t include all the relevant information and expectations. Your client can have buyer's remorse wondering if they paid too much. How can you do it for this low of a price? It is only logical to ask what was left out. At the same time, the stakeholder/bid owner wonders how he/she can provide the service at that price point.
When a client says they are purchasing a product or services from the lowest bidder, I immediately think of something I heard as a kid a long time ago. John Glenn (the astronaut) was orbiting the earth in 1962 and was looking out the tiny window and said, "every part of this rocket was supplied by the lowest bidder.”
The lowest bid can easily distort other program problems. Right now, we are working on several government bids. Understanding what is needed for specific projects is what we do. When there are restrictive means of bidding, you must answer in a particular way, then prepare a second offer on how and for how much something should be done.
Most bidders distance themselves from the RFP following an outdated format and follow a one RFP fits all approach. We know this to be the case because if a government bid is asking for a cocktail reception with liquor, they are breaking some serious laws and it should be a cash bar.
How often have you seen the bidder document be incomplete without thought to the entire project (for example, early arrivals or late departures because of airline flights.)? If you leave it out and try to collect for it later you may be denied payment. The best thing I recommend is to keep the “change orders in hand”. Be sure before you do anything they are properly signed and executed. Otherwise, you will not get paid.
In a perfect world we would love to sell based on value to win the business and when you sell based on price it might be better to just let it go!
To our potential bidders please remember this:
1. We would not be bidding on the business if we were not good.
2. We can demonstrate the correlation between our offer and the value added.
When you sell on value you have won it; when you sell on price alone you are simply renting business. It is our belief that if you sell on value and service, in the long run, success will follow.
Tip:
• Work on communicating value with each and every item in your proposal.
• Provide alternatives and think about your response before you answer.
• Do not use a scenario that is just off the top of your head.
When given all of the competitive alternatives available in your proposal, the customer should want to do business with you.