Best Value Analysis: A Salespersons Dream

In seeking price quotes from vendors, federal buyers are now encouraged to think beyond price and conduct a "best value analysis." Experienced federal sales people consider this new way of doing business revolutionary and the key to effective relationship sales. The old procurement method of "lowest price wins" is disappearing but it is nonetheless dangerous to assume that it is totally gone. Price remains a consideration and much depends on the type of procurement and the mindset of the contracting officer. Although federal regulations now encourage procurement decisions based on "best value," the importance of price is open to interpretation and probably always will be.

Considerations, other than price, that factor into a best value analysis for products:

  • Trade-in terms
  • Probable life of the product
  • Warranty terms
  • Maintenance availability
  • Past performance factors
  • Special features offered
  • Environmental and energy efficiency considerations
  • Others factors related to value

Most of the factors listed above are strictly product related and the most important of the factors may be "other factors related to value." Anything that is value related and differentiates your product from your competition's can be used in a best value analysis. This last factor is where sales creativity can flourish.

For services, the following factors may be used in best value determinations:

  • Risk reduction (thereby explaining why the incumbent contractor usually wins in the renewal of a service contract)
  • A company's past performance
  • A company's experience
  • The past performance of a company's personnel
  • The experience of a company's personnel
  • Unique personnel qualifications
  • Positive feedback following a reference check (both for the company and its personnel)
  • Other factors related to value

In responding to Requests for Proposals (RFP's), strongly consider drafting your Executive Summary as a best value statement in addition to a sales pitch. As we have stated repeatedly in previous installments, your company's value should also have been sold to the customer well in advance of the public announcement of the RFP. Help make the customer's decision to purchase your products or services an easy one. Document your value considerations for the customer.

If your business is not already doing so, sell your company's value in your corporate marketing materials, your website, and during your meetings or conferences with current and prospective customers. Overcome brand preference by stressing local accountability, customer service, replacement product availability, and warranty terms. If you are selling services, focus on risk reduction and your past corporate and personnel successes - mainly because service pricing is subjective and often difficult for the government to evaluate.


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