Presentation given by Amplio Director, Alex King at the Association for Proposal Management Professionals (APMP) Annual Conference in Heathrow, UK. The presentation discusses how Price to Win should be performed as a predictable, repeatable and transparent methodology. By doing so, Price to Win will become its own source of Competitive Intelligence by validating predictions and assumptions about competitor and customer behaviour.

1. Price to Win:
No longer a Black Art
Alex King, Shipley
Briefing
Endeavour
22nd October 2014

2. Who is PTW for?
The basic methodology of pricing your products and services
according to your relative value is for everyone who bids
The advanced parts of the methodology offer more value to
companies who:
Sell complex solutions (e.g. a mixture of labour &
materials, manufactured & supported, internally sourced &
from suppliers)
Often find price differences of more than 15% with
competitors
Compete for International tenders
Sell infrequent or bespoke products / services
© 2014 Amplio Software 2

3. This presentation will
show…
Price to Win is a predictable and repeatable
methodology to increase bidding success (i.e. not a
black art)
Three frameworks that form part of our Price to Win
methodology that you can use)
By playing to the strengths of your value and out
manoeuvring competitors, you will increase your
bidding success
© 2014 Amplio Software 3

4. Price to Win Introduction
What is it and why should I care?
Price to Win: No longer a
Black Art
4

5. Defining Price to Win
Price to Win is “the highest price you can bid at and win”.
It is effectively a measure of the value you create,
relative to your competitors.
If you have no value then you are in a price war and
you should create some
If you can’t create value then no-bid or get used to low
margins
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6. PTW Myth #1: You have to bid at
the price of stupidest bidder
Purdue’s Chicken
“Frank Perdue’s
Chickens almost
always sell for a
premium of some 10
cents a pound over
other chickens” this is
due to “scientific
breeding techniques,
obsessive quality
control, and artful
advertising” 1
1 The Winning Performance (1985). Donald Clifford & Richard Cavanagh
© 2014 Amplio Software 6

7. How can I be sure this
works?
There are only two fundamental assumptions to Price to
Win:
Every bidder intends to make profit (i.e. a Business Case)
There are a limited number of ways to make profit
The implications of these assumptions are:
We can define a limited number of options our competitors
have
We can use our competitive intelligence to measure the
value of those options
We can position our bid accordingly
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8. How the output looks
We model and
analyse
competitor
benchmarks,
then position
our bid
relatively. This
is an iterative
process,
started as early
as possible.
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9. The goal of Price to Win?
Value is something the customer is
willing and able to pay for
This is easy to measure, if the
customer does not buy the lowest
price bid then there is value in the
delta. Likewise, if they opted for a
lower priced, technically inferior bid
then the additional capability did
not equate to value for them.
2 Price to Win Survey (2014). Amplio Software
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Our goal is to use a predictable
and repeatable method to price our
bid so that we win at highest price
possible.
If we win at the highest price
possible ~70% of the time, we will
be more profitable than winning
100% of our bids as the lowest
price bidder.

10. The jobs-to-be-done
framework
Analysing what customers buy
Price to Win: No longer a
Black Art
10

11. The jobs-to-be-done
framework
This framework from Clayton Christensen provides a framework for
the parameters we measure in order to quantify value
“ Customers aren’t interested in buying products or services per se.
They have problems they want to solve and goals they want to
achieve. These are jobs they want to do ” 3
© 2014 Amplio Software 11
What job is
this customer
trying to get
done
What is the
system the
customer uses
to get the job
done
What is the
weakest part
of that
System?
3 The Innovator’s Solution (2003). Clayton Christensen

12. Transport for
London (TfL) is
investing in several
major projects
including HS2,
Crossrail &
Northern Line
Extension
What job are they
trying to get
done?
12
TfL Jobs-to-be-done
example

13. Weakest part of the System:
Signalling vrsTelecoms
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14. Customer buying trends
Research
shows that
some
organisations
have processes
that make it
very difficult not
to accept the
lowest price
4 Bids & Proposals Customer Survey (2014). Amplio Software
14

15. What is the average profit?
Research by Aswath
Damodaran 5 showed
the average net profit
of 5,891 companies
was 8.32%
Companies must have
a value proposition to
sustainably earn more
than this
© 2014 Amplio Software 15
5 Margins by Sector (2012). Aswath Damodaran

16. Case Study: IBM
In 1964 IBM launched the System 360 family of computer systems that were
extremely successful at data processing. Hardware continued to be the
weakest part of the system, until the standard market hardware became
good enough for most customers. Microprocessors, and later software,
became the weakest parts of the system (Intel created the first commercial
microprocessor in 1971). IBM recovered it’s margin by becoming the second
(now third) largest software company in the world, after Microsoft.
© 2014 Amplio Software 16

17. The Value Disciplines
Framework
Analysing how companies compete
Price to Win: No longer a
Black Art
17

18. Reasons Companies no-bid
6 Beyond ‘It’s Strategic’ (2012). Strategic Proposals
7 How Technology is changing Bidding (2014). Amplio Software
© 2014 Amplio Software 18
>56% of the reasons
most companies no-bid
are internally focussed 6
In another survey, 77%
said that ‘better
competitive intelligence’
would have a positive or
significantly positive
impact on their bidding
success 7

19. PTW Myth 2: You need to know
the customer budget for PTW
Everyone knows the
story of two hikers who
met a bear in the
woods…
© 2014 Amplio Software 19
Focussing on the
customer budget is like
focussing on the bear!
Customers can only buy
what someone is willing
to sell.

20. How companies compete
There are three generic ways companies compete.
These are called ‘Value Disciplines’: 8 9
Being the cheapest
Having the best quality
Using customer intimacy
Aldi
Waitrose
7-Eleven
You don’t need to be the cheapest:
The American Business Conference (ABC) is a coalition of
100 midsize, high-growth companies from all industries.
Membership is limited to companies that have doubled in
size in the last 5 years.
3 in 4 members are not the industry’s low-cost producer. 10
8 Competitive Strategy (1980). Michael Porter.
9 Customer Intimacy and other Value Disciplines (1992). Michael Treacy & Fred Wiersema.
10 See: http://americanbusinessconference.org/about-abc.php
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21. The weakest part of
Price to Win
Analysing how to make Price to Win
better
Price to Win: No longer a
Black Art
21

22. The quality of tactical CI
From our
survey, few
companies
rated their
tactical
competitive
intelligence
ability as good
or very good 11
© 2014 Amplio Software 22
11 Price to Win Survey (2014). Amplio Software

23. PTW Myth 3: Your customer
knows the Price to Win
If customers
knew what
prices bidders
would submit
then they
wouldn’t need
the expense of
running a
competition.
They are not
there to do your
job for you! 23

24. Finding Competitive
Intelligence
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25. Finding Competitive
Intelligence
© 2014 Amplio Software 25

26. Key Skills to take-away
Use the Jobs-to-be-done framework to target how
value is offered to your customer
Use the Value Disciplines framework to analyse
how your value is different from your competitors
(even if you aren’t sure who they are)
Create a plan to gather Competitive Intelligence for
your organisation or bid to create actionable
intelligence
© 2014 Amplio Software 26

27. PTW: Not for cynics or
sentimentalists
“What is a cynic? A
man who knows the
price of everything and
the value of nothing.
And a sentimentalist, is
a man who sees an
absurd value in
everything, and doesn't
know the market place
of any single thing.” 12
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12 Lady Windermere's Fan, (1892). Oscar Wilde.

28. Legal Notice
The photos in this presentation are used under a
Creative Commons license, credit for them is attributed
to:
“Huawei awarded Addis Abeba light rail telecoms contract”. Source: http://www.railwaygazette.com/news/news/africa/single-view/view/huawei-awarded-addis-abeba-
light-rail-telecoms-contract.html accessed: 24/08/2014
“Singapore awards five metro contracts”. Source: http://www.railwaygazette.com/news/news/asia/single-view/view/singapore-awards-five-metro-contracts.html
accessed: 24/08/2014
“Crossrail awards signalling system contract”. Source: http://www.crossrail.co.uk/news/articles/crossrail-awards-signalling-system-contract accessed: 24/08/2014
“Deconstruction on Madison Avenue: Double Advertendres”. Source: http://craigmcnamara.blogspot.co.uk/2011/09/double-advertendres.html accessed:
24/08/2014
“Alfred Sloan”. Source: http://www.novavizia.com/5133.html accessed: 24/08/2014
“Harold Geneern”. Source: http://www.mbsportal.bl.uk/taster/subjareas/busmanhist/mgmtthinkers/geneen.aspx accessed: 24/08/2014
“Jack Welch”. Source: www.jasongrow.com-900 accessed: 24/08/2014
“Bill Gates”. Source: http://blog.operationhope.org/2012/04/special-from-bloomberg-businessweek-if-bill-gates-were-black/ accessed: 24/08/2014
“Steve Jobs”. Source: http://www.angeloakcreative.com/want-to-bet-i-cant-change-the-world-watch-me/ accessed: 24/08/2014
“A Good Woman”. Source: http://filmjournal.net/100films/2011/01/19/121-a-good-woman-2004/ accessed: 31/08/2014
“Out run the Bear”. Source: http://mseedideas.com/2012/04/09/just-outrun-the-bear/ accessed: 31/08/2014
“London Overground Capacity”. Source: https://www.tfl.gov.uk/travel-information/improvements-and-projects/london-overground-capacity accessed: 05/10/2014
“Wizard of Oz”. Source: http://lmarie7b.files.wordpress.com/2014/05/wizardofoz_4675.jpg accessed: 05/10/2014
“London Underground: Designs for Tube trains unveiled”. Source: http://www.bbc.co.uk/news/uk-england-london-29520761 accessed: 05/10/2014
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