Welcome back to our series on how to write a winning tender. In part 2, we will be discussing the importance of setting your prices strategically.

Why worry about tender pricing?

When it comes to tendering, pricing can be a deciding factor in whether or not you win the bid. However, setting your prices too high or too low can have adverse effects on your chances of winning the tender, and your business's profitability. So, how do you set your prices strategically?

Do you really want the contract?

Firstly, consider your appetite for the work.

Will this contract be a significant expansion for your business?

Can you afford to lose this contract if you do not win?

Answering these questions will help you determine how much risk you are willing to take and how much you can price your services.

Is this tender essential to your business?

Secondly, consider whether this contract is essential to meet your business goals. If it is, you may be willing to price your services lower than usual to secure the contract. However, if it is not essential, you may price your services higher to reflect the added risk or to make the work more profitable.

Do your research before bidding for a tender

Thirdly, research your competitors and the market price.

Are you willing to go higher or lower than the market price?

Are you willing to take more or less profit on the work?

These answers will help you determine your pricing strategy.

It is also important to consider the other criteria and weightings that the tender assessment panel will consider.

Sometimes, the price may be higher, but delivering content that scores higher in other prioritised areas can still result in winning the bid.

Do not underprice your tender bid

On the flip side, do not under-price significantly. Under-pricing could make the assessment panel think that you do not understand the work or lack the skills required to deliver the project successfully.

No matter what strategy you choose, you need to make sure it is profitable for your business as you may not be able to renegotiate the pricing during the contract.

We recommend developing your pricing strategy draft at the beginning of the tender preparation and updating it at the end.

This will allow you to factor in any additional costs, such as subcontractors or specialist hires, that you may need to deliver the project successfully.

In conclusion, setting your prices strategically is essential when it comes to winning tenders.

By considering your appetite for the work, the importance of the contract to your business goals, your competitors' market price, and the other criteria and weightings, you can determine the best pricing strategy for your business.

Remember, the goal is not to price the services the lowest, but to price them fairly while still remaining profitable and meeting the tender criteria.

Ciao

Conni

PS. Tender writers usually don’t price your tender bids for you but should understand pricing to help you to write about any assumptions, dependencies or exceptions. This is all about helping you put forward your best and most competitive bid.

I am a corporate writer based in Darwin Northern Territory. I love writing tenders and helping people to grow their businesses and organisations.

If you are still unsure about writing your tender, book a free 30 minute consultation to discuss On The Same Page Consulting's options for supporting you to write your tender.