Pricing Strategy
Deal Qualification Framework
A structured scoring system that evaluates potential projects or clients based on strategic fit, margin potential, scope certainty, and win probability — before time is invested in proposal creation.
Definition
A deal qualification framework replaces gut-feel pipeline decisions with structured scoring. Each potential engagement is evaluated across dimensions: (1) strategic alignment — does this client fit our target profile?; (2) margin potential — what is the expected value range?; (3) scope certainty — how well-defined is the work?; (4) win probability — what is our likelihood of closing?; and (5) capacity fit — do we have the right team available?
The framework's output is a recommendation: pursue, qualify further, or decline. The most important discipline is declining — most agencies would improve profitability by declining 20-30% of the opportunities they currently pursue, freeing capacity for better-fitting, higher-margin work.
The mechanism is straightforward: declining the worst-performing deal types raises the average margin of everything you do deliver. How much depends entirely on how bad your bottom quartile currently is, which is one of the things an audit measures.
The framework integrates with Bayesian pricing by providing the priors for win probability estimation: qualified deals have different base rates than unqualified ones.
Related terms
Win-Rate Paradox
The counterintuitive finding that increasing win rates often correlates with decreasing profitability, because high win rates typically indicate underpricing.
Bayesian Pricing
A pricing methodology that uses Bayesian inference to estimate win probability and optimal price points based on prior data and ongoing negotiation signals.
Win Probability
The statistical likelihood that a given proposal will result in a won deal, estimated using historical data, deal characteristics, and competitive context.
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