But it’s all about price, right?

I’d arranged to grab a coffee yesterday with a good friend who’s very senior in the world of procurement. As usual when it starts to pour with rain, I’d forgotten my umbrella, so I was sheltering inside a Waterstone’s bookstore across the street from his office. (Hey, any excuse to browse, right?).

He came and dragged me out. As we left, he commented on a prominent display of paperback novels priced at 99 pence each. (That’s about a dollar fifty, for those of you Stateside). “They must be dreadful books if they’re selling them that cheap,” he commented. Actually, they’re all from acclaimed authors – some even shortlisted for the prestigious Booker Prize.

Now, my colleague Richard and I are currently finalising the slide pack for our presentation at this year’s APMP conference in New Orleans. We’re discussing the role of price in proposal evaluation. (The session will be presented in the style of a courtroom drama, for those of you who are going to attend!). The “99p books” debate illustrates an important point.

Of course, purchasers are often looking for low prices, cost savings, discounts, reduced costs of ownership, greater value. But if the price falls too low, buyers get suspicious. There must be a problem! What am I overlooking? How could this come back to haunt me? Too good to be true: RISKY! I often work on proposals where the bid team knows it won’t be cheapest; playing subtly with some of these messages can be a very powerful ploy.

This article was written by Jon on 12 April, 2006 and filed under Musings, Processes & best practice. If you found it useful, you can with others. To receive automatic updates, subscribe to The Proposal Guys via RSS or Email.

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