How important is price in proposals?
I’ve heard many salespeople claim “the only reason buyers issue RFPs is because they want the lowest price.” In fact, any salesperson who employs this obsolete generality to justify dismissing the function and role of RFPs is irresponsible and shortsighted.
In the real world, the importance of price in proposals will vary depending on the unique goals of each procurement. In some state and local government procurements, for example, buyers are required under the law to establish which vendors meet minimum requirements, and of them, to choose the vendor with the lowest price. In this case, price is a primary issue.
There are other procurements, though, that have different objectives. I remember one recent project where the buyer made clear they were willing to spend far more if the vendor could produce better outcomes for their user base. It wasn’t about price, it was about results.
The point is every buyer is different, every procurement is different, and if you’re going to be effective at winning more of them, you must understand how important price is in their selection process.
David Seibert is a professional salesperson and consultant for businesses that respond to formal procurements in non-federal markets. Dave publishes a comprehensive curriculum of online, self-paced proposal training classes, delivers onsite and online proposal training programs for dedicated proposal teams, and provides proposal and business development consulting services for businesses that want to improve their win rates.
Dave is founder and president of The Seibert Group, a proposal consulting and training organization serving businesses that sell to other businesses, A/E/C firms, schools, and to state and local governments. Dave authored the popular proposal book, Proposal Best Practices, is active with the Association of Proposal Management Professionals (APMP), and is a member of the APMP Speakers Bureau. You can contact Dave at [email protected].