A Recipe for Best Value at the Lowest Price
If you want to win a contract, be it TVs, toasters, or teacups, you need to understand what is valuable to your customer. Answer these questions to understand what your customer values:
- What pains, dependencies, or risks does the customer want to avoid?
- What functionality does the customer require?
- How can I exceed the customer’s expectations?
For example, if the customer wants to build a service desk for widget technical support, understand any relevant pains, dependencies, or risks. The customer might have to divert its R&D staff from more important work to respond to requests for technical assistance. Or the customer might have a hard time trying to solve problems right the first time, which drives up costs and drives down customer satisfaction.
Next, understand all the functionality the customer requires such as call, email, and chat functionality and 8/5 coverage. In addition, exceed your customer’s expectations by offering tangible and intangible benefits. A tangible benefit might be self-help videos for the top 10 questions, and an intangible benefit might be morale-booster events to drive up service desk agent’s productivity. The more “pains, functionality, and exceeds” you identify, the higher the value of your product or service is likely to be to the customer.
In addition to looking for best value, the customer is looking for the best price. For example, the customer shopping for support desk services might consider a highly skilled, multi-lingual, and certified support team that has a first contact resolution rate of 15% valuable if it costs less than $9.9M.
After you eliminate pain points, dependencies, and risks; meet all functional requirements; and produce a few “exceeds” within the customer’s budget, figure out if your offer is competitive in the marketplace. Use your findings to refine your offer and make it more attractive to the customer. For example, if your competitor offers similar service desk offerings, you might lower your price by 10% or identify other “exceeds” your competitor cannot match such as a customer satisfaction follow-up service or semi-annual independent quality reviews.
To verify your proposal offers the highest value at the best price, provide the customer with a pilot or presentation and ask for feedback. If the customer is not available, study the customer’s buying habits and history and talk to the customer’s stakeholders, vendors, or users.
Once you have enough information, formulate the best value statements (or strengths) for each evaluated criterion use the following template and example.
- Template: [Fill in customer name] will [restate the customer’s expected outcome] by [fill in a description of your benefit]. By selecting [fill in your company’s name] to [fill in quantified return on investment].
- Example: Customer ABC will increase its first contract resolution rate to 98% and stop diverting valuable in-house operations staff to solve technical support issues. By using Company XYZ’s Widget Support Program, Customer ABC will receive multi-lingual staff of 2,500 widget certified agents who have a first contact resolution rate of 98% based on 5 years of experience resolving 500,000 contacts. For a total price of $9.5M annually, Customer ABC will receive 100% of all requested functionality, as well as self-help videos for the top 10 support issues and a follow-up service to independently verify customer satisfaction and quality.
By Brenda Crist, Vice President at Lohfeld Consulting Group, MPA, CPP APMP Fellow
Lohfeld Consulting Group has proven results specializing in helping companies create winning captures and proposals.
As the premier capture and proposal services consulting firm focused exclusively on government markets, we provide expert assistance to government contractors in Proposal Management and Writing, Capture Planning and Strategy, Capture and Proposal Process and Infrastructure, and Training. We’ve successfully supported the top federal contractors – large, mid-sized and small – garnering over $170B of contract awards in the last three years for our clients. Lohfeld Consulting Group is your “go-to” capture and proposal source! Start winning by contacting us at www.lohfeldconsulting.com and join us on LinkedIn, Facebook, and Twitter.
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Lohfeld Consulting Group Capture & Proposal Insights & Tips Volume 3
by Beth Wingate
contributors Brenda Crist, Bob Lohfeld, Wendy Frieman, Alexandra Wingate, Julia Quigley, Maryann Lesnick
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