Importance of Price in Proposals

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 himself 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 vendors 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, proposal trainer, author, writer, and business development consultant. He is the founder and president of The Seibert Group, a proposal consulting and training organization serving businesses that sell to other businesses, schools, and to state and local governments. You can contact him at David.Seibert@ProposalBestPractices.com.

 

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