Last post I went over some basic success I had in a recent negotiation. Today we will go over another case study to present some new ideas. Recently I have taken the task of Project Manager for the implementation of a SaaS service for my company. Over 7 weeks, I researched every possible option for this SaaS product that we wanted to implement.
1. Research is key- I touched in this briefly last post. When you enter a negotiation you want to be the expert on all things related to the negotiation. You should be able to quote stats, have data on competitors and the company you are negotiating with, and know additional pieces that you can dangle in front of the person you negotiate with.
Through my research, I discovered that there are 3 great SaaS products that would fit the needs of my company. I proceeded to notify the salesmen of each of these different companies that I would be deciding between 3 companies, and I told him directly which companies they were and why we were considering them.
2. Friendly Competition - Think of this as the Ebay success principal. People inherently like to win and they especially don't like to lose when it is to their direct competitor. This is the case with all negotiations, if you have options then you will have the upper hand needed to help secure the best deal.
After initial negotiations there became a clear leader to be our SaaS provider, and I was ready to present this company as the future product for our needs, but that doesn't mean you can't negotiate a little further. This company had multiple points of interest for negotiation. The training fees, and the implementation fee seemed to be the easiest points to get a little better rate on. We were fine with the monthly fee and the term of the contract and so I preceded to work on the points of concern.
3. Lose to win - Good negotiators will start a further negotiation with a concession and a semi-guarantee of a future deal. For example, I said "We have narrowed down our choices to your company and ___, I am ready to present your company to our CEO as our solution if we can get a few things ironed out. I don't see a problem presenting the term of the contract and the monthly fee, but we will need to work further on these implementation fees." You have to pick your battle with negotiation. If you aren't willing to compromise on some areas then neither one will win. It is also key to show the light at the end of the tunnel for the negotiation.
After presenting concerns to salesperson, I presented some tier options that would fit within the price that I envisioned for the training and implementation fees. We came up with some ideas and I was able to reduce the implementation fees by 40%.
4. Work together - have some ideas ready to help come to an agreed conclusion. If you just say that you want X and expect them to reach it without providing any concession or feedback, then you will most likely not end up where you would like to be.
My negotiation ended with a 1 year contract term reduction, 35% reduction in monthly price and 50% reduction in implementation and training fees. I consider that a successful negotiation.
Part 3 of negotiation next post.
After initial negotiations there became a clear leader to be our SaaS provider, and I was ready to present this company as the future product for our needs, but that doesn't mean you can't negotiate a little further. This company had multiple points of interest for negotiation. The training fees, and the implementation fee seemed to be the easiest points to get a little better rate on. We were fine with the monthly fee and the term of the contract and so I preceded to work on the points of concern.
3. Lose to win - Good negotiators will start a further negotiation with a concession and a semi-guarantee of a future deal. For example, I said "We have narrowed down our choices to your company and ___, I am ready to present your company to our CEO as our solution if we can get a few things ironed out. I don't see a problem presenting the term of the contract and the monthly fee, but we will need to work further on these implementation fees." You have to pick your battle with negotiation. If you aren't willing to compromise on some areas then neither one will win. It is also key to show the light at the end of the tunnel for the negotiation.
After presenting concerns to salesperson, I presented some tier options that would fit within the price that I envisioned for the training and implementation fees. We came up with some ideas and I was able to reduce the implementation fees by 40%.
4. Work together - have some ideas ready to help come to an agreed conclusion. If you just say that you want X and expect them to reach it without providing any concession or feedback, then you will most likely not end up where you would like to be.
My negotiation ended with a 1 year contract term reduction, 35% reduction in monthly price and 50% reduction in implementation and training fees. I consider that a successful negotiation.
Part 3 of negotiation next post.
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