rfp competitive price forecasting engine

RFP Competitive Price Forecast Engine

win more deals profitably

Robert D. Brown III

678.947.5997

[email protected]

www.incitedecisiontech.com

Sales groups employ a number of means to develop compeDDve RFP response bids

•  One approach: compare “best guess” compeDtors’ prices to an iniDal home price.

•  Adjust the home price unDl it undercuts the compeDtors’ prices.

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$Price

IniDal Home Price

“Best Guess” CompeDtor

Price

Readjusted Home Price

What can go wrong with this approach?

•  One rarely knows the compeDtors’ price with certainty.

•  “Best guesses” are based on bias, caveats & anecdotes.

•  CompeDtors’ actual price is based on uncertain underlying cost components & desired margins, leading to compounded uncertainty.

•  Uncertainty leads to ambiguity about the right direcDon to adjust price.

•  Price compeDDon and margin-‐destroying commodiDzaDon escalates.


“Boy, that escalated quickly. I mean, that really got out of hand fast!”

With the Incite! RFP CompeDDve Price Forecast Engine, you can

•  Compare your price against the likely range of compeDtors’ prices.

•  Focus prioriDzed adenDon on which compeDtors’ price components affect your ability to win on price.

•  IdenDfy the most effecDve areas to adjust your costs to price neutrality to focus on delivering intangible benefits that customers value more.

•  Avoid leaving value on the table and cugng margins by pricing too low.

4 Incite! Decision Technologies, LLC Copyright © 2013 All Rights Reserved

The Incite! RFP CompeDDve Price Forecast Engine follows a three-‐stage iteraDve process

Prepare Analysis

Calibrate CompeDtor

Cost AssumpDons

Supply Your Cost

AssumpDons

Adjust Your Price to Win at Probability of

Award

Can CompeDtor InformaDon

be Improved?

Can Your Price be

Improved?

No

IdenDfy Most SensiDve Inputs on

Tornado Chart

Recalibrate Inputs with Improved InformaDon

Yes

IdenDfy Most SensiDve

Inputs on Your Price

Readjust Inputs to

Narrow Price Gap

Yes

End No

1.

2.

3.

1.  Capture iniDal cost informaDon

2.  PrioriDze areas of greatest uncertainty, gain intelligence, then recalibrate accordingly

3.  Modify your costs to reach price indifference


Capture cost data according to your unique template price formula


Capture & document raDonales for compeDtors’ price components. Calibrate with 80th percenDle predicDon ranges.


The user interface imports the pricing data and provides key results


Home Price Probability of Win shows the corresponding likelihood of winning at a given price

Your current price is $2.25M.

The probability neutral price is $1.75M, given current informaDon.

In this example, you will need to determine how to move your price $500K.


Current Price Comparison shows your price compared to compeDtors’ likely prices

This appears to be a balanced price posiDon, but the Probability of Win at Current Home Price is only 1.74%.


The probability of winning is dependent on the amount of uncertainty about compeDtors’ prices. The tornado chart breaks down the sources of uncertainty to guide efforts to gain beder informaDon about compeDtors’ prices.


You have high confidence in these elements.

Focus your adenDon on gegng beder informaDon here

Home Price Sensi:vity to Cost Elements shows priority of adenDon for adjusDng your price to a neutral price


AdjusDng this element moves price fastest in desired direcDon

Final Price Comparison shows all final price esDmates aner price adjustments are made


Benefits of Using the Incite! RFP CompeDDve Price Forecast Engine

•  Develop more informed RFP pricing

•  Avoid the risk of pricing too low (leaving money on the table) or too high (reducing price compeDDveness)

•  Focus more adenDon on providing intangible benefits that differenDate your offering

•  Win more deals at a higher profit


rfp competitive price forecasting engine

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