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If you run a business that gets projects through tendering, you will probably know the complexities of the process. Perhaps, pricing is the most challenging aspect of a typical tender response process. The reason is that there is no straight answer when it comes to pricing your bids and winning with them. Moreover, you cannot expect to take a one-size-fits-all approach for pricing because every tender is different. But this is something you need to do with great care because it can actually make all the difference to the result. However, there are some pricing strategies that you can follow to get the price right.
Know your business first
Even before you start considering the price for a bid, there is a need to know your business thoroughly. Essentially, the factors that matter in this context are your operating costs because these will have a bearing on what the project will cost to you in the end. Studying your competition and the market is equally important. This is something that you must do periodically because you can expect these parameters to change from time to time. A complete understanding of your business is something that will help you determine the price of every tender you pursue.
Be selective with the requests
Any smart business owner would invest energies only on opportunities that have a profit potential. If a request appears irrelevant or seems to be demanding too much, don’t waste your time responding to it. Rather, look for the tenders that are just relevant in terms of your business offering and geographical location. While you can research every opportunity that comes around, subscribing to a notifications site makes a better approach as it reduces the work involved.
Understand the expectation of the tender issuer
While knowing your business is a common step, you have to get more granular as you consider individual tendering opportunities. A good look at the tender request is essential if you want to quote a perfect price. Try to comprehend what the issuer is actually looking for. They may want you to break down your pricing table to details like material cost, labor rates, taxes etc. Start working on the pricing only when you understand these expectations. Still, remember that detailing your pricing always helps as it adds credibility to your bid.
Highlight added value if any
Winning a bid is all about showing the benefits of onboarding your business to the potential client. Highlighting added value that you offer with your price is a good idea, even if it is something small and simple. For example, a construction contractor may offer a free consultation or a cleaning provider may give a bonus window cleaning service as a value addition to price. These extras can boost your chances manifold, even if your services are marginally higher in price.
While taking a strategic approach to pricing gives you better chances, you cannot ignore external factors like competitors and market trends. Remember to bid optimally because going too high reduces your chances of getting the project while a price too low can translate into loss for your business.