We are in the world of “Specialized” ,“We are the best...” type Suppliers – We have all encountered companies of this type. A company that makes it clear: Take our contract terms as written we do not make contract changes.
I recently negotiated a contract for a client where the Supplier "Specialized" in a software management product. The Supplier provided a quote in the body of an email, the SLA’s and and contract terms are publicly displayed on their website and the actual “contract” is just an order form – how many licenses do you need at what level? – The price is X.
• The Supplier didn’t care that the company I was representing is a Fortune 1000 in revenue in the United States.
• The Supplier didn’t care that the client wanted to start with 25 to see how it goes and then increase the order
• The Suppler didn’t care that my client wanted a 3-year term agreement – the supplier only issues a 1-year term agreement and renewals after that.
How can anyone negotiate under these circumstances????
• Research the Actual Costs – it is truly rare to only have one supplier selling a specific type of widget.
• Know the Lingo – when speaking with the Supplier representatives during the decision of purchase - learn and speak the lingo.
• Discover/Discuss the mutual gains – Our logo represents X amount of potential future clients
• Quote Alternative Suppliers – politely discuss that you could purchase the widget from X for % less….
• Identify Supplier Freebees - Look for items that cost the vendor nothing to provide but are a value add to your company.
What I was able to negotiate:
• Additional training hours beyond the 10 for administrators within the first 30 days became 20 hours over 3 months.
• Two extra licenses for the same cost as the 25 we began with
• Reduce the written notice to not renew from 60 days down to 30 days.
• Test drive a different product they are selling for two users for 6 months.
We will always be in a business world with "Take it or leave it" type companies...and in most cases we take it because time and effort had already been extended to make the decision of who to engage with; starting over or requesting a contract from the second choice on the list will not truly fill the need.
I'd like to hear/read your thoughts... firstname.lastname@example.org