How to determine Price To Win

What is Business Development?

Price is critical for winning deals.

Business Development plays a key role.

2021 DemandGen Report found price is the top consideration for decision makers when awarding a contract.

Price exceeds all other factors by 20%+

Price determines if you win or lose...

• Price too high and you lose the bid
• Price too low and you lose money

So, how do you pick the right price?

I describe 20+ pricing tactics in my book, the BD-BOK.

But, large enterprise deals use a method called, Price to Win (PTW).

PTW = RV + PDV – NDV

· Reference Value (RV)
This is the price your top competitor charges for their product.

· Positive Differentiation Value (PDV)
Your prospect’s positive perception of your product’s unique value.

· Negative Differentiation Value (NDV)
Your prospect’s negative perception of your product when compared to your top competitor.

Business Developers play a critical role in Price to Win.

Here's why...

1. PDV

BD sets the prospect's perception of value during the Activation Phase.
Sales crystallizes that value in the proposal to the prospect during the Conversion phase.

2. RV and NDV

To calculate RV and NDV, you must conduct competitive analysis.
Business Developers gather competitive intelligence as we engage with prospects, clients, partners, and competitors.

Failure to capture competitive intelligence can lead to a losing price.

See slides for how a pricing team calculates PTW.

Tony Gray, BDP
Author of the Business Development Body of Knowledge

Get your copy on Amazon today!