What is Price to Win?
Price to Win (PTW) is the price at which you will likely win a competition based on how the buyer evaluates all competitors. The process takes into consideration the Price and Non-Price factors. PTW is also shorthand for the method and professional function of evaluating competitions.
Price to Win examines how well your solution is priced compared to what the organization budgeted for the purchase. PTW also evaluates the relative pricing of the different competitors in comparison to one another. Although buyers do not always cite pricing as the reason for the final selection, it can be and often is a significant factor in the buyer’s final decision.
Price to Win Helps You
If your goal is to win contracts, you’ll need to outperform your competitors, account for what you don’t know, and quantify the motivators behind each bid opportunity. PTW helps you:
- Appropriately price your products relative to the competition. This will place your company in a more competitive position to win the opportunity.
- Weigh the probability of winning against the costs of pursuing and proposing, e.g., business development, budget, and pricing costs.
- Asks the question, “Does this opportunity fit with our business strategy, business plans, and competitive posture?”
Price to Win Answers 7 Important Questions
When you consider bidding on a contract, you will need to
answer specific questions so you can price your solution accordingly. Price to
Win is the strategy that will answer the following strategic questions:
- Who are the incumbents?
- Who are the competitors?
- Is it worth our investment?
- Will it fit into our revenue stream?
- Can we compete effectively?
- Do we have a realistic chance of winning?
- Is this the right opportunity for the company?
Price to Win versus Probability of Win
PTW assists you with the Probability of Win, also known as P-Win, which is your company’s probability of winning an opportunity compared to your competitors. This P-Win is a specific number for each sales proposal based on a business development team’s assessment.
The Probability of Win determination requires in-depth knowledge of the customer, competitors’ strengths and weaknesses, and an unbiased assessment of your company’s capabilities and competencies.
P-Win is also affected by a company’s ability to shape the:
- Acquisition strategy
- Business requirements
- Customer relationship
- Innovative prime/substructure
- Compelling technical solution
- Value proposition
What happens if you don’t implement a PTW strategy?
You will risk having less market intelligence on the appropriateness of your pricing. In the long term, this will affect your competitiveness and win rate.
Price to Win Next Steps
The best and easiest way to implement PTW at your company is with a real-time analytics tool. Lone Star Analysis TruPredict SaaS solution transforms the way you Price to Win. These advanced methodologies have delivered over a 96% accuracy rate.
TruPredict calculates what price it will take to win your contract and gives you a deep understanding of your overall competitive positioning, risk tolerance, and optimal bid strategy using a series of alternative “what if” scenarios.
With TruPredict, you get unrivaled accuracy, record decision making, and actionable insights. We’d prefer to show than tell. Please book a demo to get started today on your Price to Win strategy.