Negotiating for Better Value
Do you know what your budget’s worth? How about your time, and that of your colleagues? Even if you don’t, you can be sure that your information vendors know their value and know how to maximize it. Here are some tips for negotiating like a pro.
What’s your position?
Before you begin speaking with vendors, spend some time thinking critically about the following:
Needs vs. wants: Which contract provisions are “must-haves” vs “nice-to-haves”? How would you rank your priorities?
The bottom line: What’s your bottom line budget? Do you have a hard deadline for concluding a deal? Whose approval do you need to sign off?
Worst-case scenario: How do you measure the vendor’s performance in performing to the agreement? What risks or liabilities may be factors? If something goes wrong, what’s the process for dispute resolution or cancellation?
Exit strategy: Do you have an alternative if the deal falls through? Can you afford to walk away?
What’s their position?
Chances are you can get a good idea of what your prospective partner wants based on sources of information you already have in hand or can easily uncover.
Vendor web presence: Marketing content should outline offerings as well as what the vendor sees as value propositions and key differentiators.
Recent news articles: These may reference personnel changes, strategic goals, competitors, or transactions such as mergers and acquisitions.
Past conversations: If you’ve already been in dialogue with a vendor’s representatives, referencing past emails or notes from previous calls or can help build a picture of what they’re looking for.
Contracts or proposals: Vendor proposals offer a wealth of context. If you have a prior contract with the same vendor to review, this may also offer insight into the vendor’s fiscal calendar and optimal timing.
Other clients: If you don’t have customer references or see them on the web, request them from the vendor. If you know of current or former clients in your network, don’t hesitate to reach out to them directly.
Stepping off on the right foot
Successful negotiation doesn’t have to be acrimonious. Here’s how to get a cordial conversation started and keep it flowing.
Focus on mutual benefit: Based on your self-assessment and your assessment of the vendor, you should have an idea of opportunities for mutual benefit. Highlight these at the outset and return to them in the course of the conversation.
Humanize who you’re meeting with: Do a quick web search for the names of the vendor’s representatives and peruse their social media presence. A few minutes spent on this will allow you to start building rapport before you’re in the room.
Listen actively: Don’t just sit there thinking about what to say next! One active listening technique is to summarize what someone has just said to you to clarify your understanding. This, in turn, demonstrates to the other party that you are listening.
Listen to more than just what’s being said: Body language and tone of voice are contextual indicators of what emotions are coming up for others. It can be tough to detect these if you’re not in the same room, so video conferencing can help.
Speak the same language: Mirror the lingo your vendor uses in your own statements. Don’t hesitate to establish a working definition of terminology with them if you need to. Sharing a common vocabulary will facilitate conversations enormously.
Crossing the finish line
You’re (mostly) seeing eye to eye — congratulations! Now’s the time to bring it home.
Call out next steps: Take time to establish what needs to happen to move on to the next phase of the conversation. Identify action items and parties responsible for completing them. Be consistent, timely, and thorough in follow-up communications.
Give it time: It’s easy to get impatient with the process, especially if one or both parties are driven by hard deadlines. Be generous in your timeline with the overall negotiation as well as with each meeting so you can do your own due diligence.
Getting to done: Is “done” better than “perfect”? The potential drawbacks of a longer process should be weighed against the prospect of a deal less favorable for your business, keeping in mind the priorities you established at the outset.
Getting help: If you find yourself overwhelmed by the need to negotiate with multiple vendors, or would like to have the advantage that expert negotiation offers with accurate benchmarking standards, cSubs offers negotiation services which offer cost savings plus reduced time and effort.