Cost and Price – it all boils down to this doesn’t it? How you price your services is a key factor in winning proposals. But just deciding on a price isn’t enough; the client needs to be convinced that the cost and price that you offer is justified. This entails a lot more than typing out a figure at the back of your proposal or adding an appendix. As in all things, presentation is key.
Let us keep in mind that there are instances when you do not need to and in some cases aren’t permitted to reveal your cost and pricing data. Talking about Government contracts, you can check out this blog which details some of those exceptions.
We will look at 5 things to keep in mind when presenting cost and price data.
1) Include pricing in your executive summary
Get the figures out there ASAP. Some businesses believe that you must “save the best for last.” They bank on the anticipation factor to get evaluators to read the whole proposal and wait for the climax. But unless it’s a gripping paperback, evaluators aren’t going to want to wait. Keep in mind though presenting this data in the exec sum is prohibited in some instances. Read the RFP well.
2) Don’t say “added value”; quantify it
Promising added value without substantiating it with solid data is somewhat useless. Evaluators are just going to roll their eyes and move on. Let them see a quantified cost benefit selling. Use graphs and charts to explain your numbers.
3) Graphic presentation works wonders
Investors are going to be keenly interested in comparative analysis. You could provide a long line of numbers but let’s just keep that to an accounts sheet. It’s boring and doesn’t effectively convey the point. So graphs, charts, diagrams… use them to the fullest. To help you know what to use when, here’s a bit of collated information.
Column, bar and line charts
You can use these to present a single series of data or when you want to compare multiple data sets in absolute value terms and over multiple periods. Here is a column chart to illustrate:
Component or Stacked chart
This chart gives the overall total value for multiple time periods (or products, or locations etc), and also shows an analysis of the components of that total.
A pie chart is best if you want to only show the components of a total for one period/product/location.
100% Stacked Column or Bar Charts
Whereas a pie chart will show you components of a total for only one factor, you can show multiple factors in a stacked chart and data is presented as the components of a total where the actual total amounts are shown as 100%.
These are some of the most commonly used graphs, but there are many more. Using the appropriate graph is very important as things can get really confusing and very wrong otherwise. This blog has more info on it.
4) Present past performance data
The Office of Federal Procurement Policy says: “Emphasizing past performance in source selection, helps ensure that the Government will contract with firms likely to meet performance expectations. OFPP encourages agencies to make contractors’ performance records an essential consideration in the award of all negotiated acquisitions.” The government and commercial firms rely heavily on past performance data to gauge your credibility. Paying attention to this information and finding the right criteria to effectively present this data is vital.
5) Present relative cost comparisons and cost volume summary
Where actual cost data is not allowed in the technical proposal, presenting the relative cost comparisons and the cost volume summary in a clear, graphical way will go miles in helping cost analysts weigh the feasibility and the affordability of your proposal.
Cost and price data are always going to be important factors in any proposal consideration, but how you present that data is just as important. Have any questions or comments, feel free to talk to us.
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