Contract negotiation is not an exact science, it is an art form and to be successful at contract negotiation it takes the right frame of mind. Personality plays a large role in how your contract negotiation will play out and it is more important than ever that companies walk away from their software contracts with a good deal designed to nurture the long-term growth of their company. At MetrixData360, we have sat through countless negotiations and we know what kind of an attitude it takes to see success from one.
Even though sometimes contract negotiations feel like you’re bashing your head against a wall, a successful negotiator radiates optimism. No matter how good it will feel to let them know just a fraction of your frustrations, it will not get you anything but stony and uncompromising faces. Instead state how happy you are to see your sales rep when they walk in — bring excitement and enthusiasm into the meeting and hopefully it will be contagious.
Now, that being said, don’t be fake with your smile. It’s important that you come across as sincere and genuine. The last thing you want is for your sales rep to feel as though you are untrustworthy. Build your integrity with the sales rep by keeping your appointments, following the rules (to the best of your ability), and remaining honest.
When confronted with challenges, approach the situation without aggression and instead try to phrase your concerns in the form of questions. Make sure that you ask enough questions to fully understand your contract.
You will also need to be brave in your software contract negotiation. It may seem intimidating but there’s only one way to become braver: do something that you are afraid of and do it often, then it will steadily become less scary over time. In order to build your confidence, it is important to be prepared. You need to make certain you have a strong stance on what you and your company are aiming to achieve. If you are frustrated by a long drawn out process, make sure that you make this frustration known to the software publisher. You will also not be able to win if you are full of fear and uncertainty. That certainty comes from a firm knowledge of what is in your software licensing environment and that your data is accurate Visibility into your data is gained through the successful implementation of software asset management. If you’d like to learn about how you can get started with software asset management, you can check out our article, Getting Started: Implementing Software Asset Management.
Who says there is no room for creativity in the business world, especially in the seemingly unforgiving realm of software contracts? Software publishers are often willing to hear out creative ideas and will reward you for your outside-of-the-box thinking. Creativity is often required if you are going to get what you want out of your contract negotiations. Benchmark your progress with your contracts against past deals you have made with that vendor and use that to build a creative solution.
As social animals, we tend to gravitate towards people who offer us both kindness and generosity, same goes with your software vendor. We’re not saying you should throw copious amounts of money at the software vendor for no good reason – quite the opposite. Offer up information and be willing to share details and specifics, something that won’t jeopardize the competitive edge of your company, but your software vendor will still find valuable, such as an introduction to a potential client. Such information will generate trust and create a sense of partnership between the two of you.
Generosity is an active form of both empathy and sympathy. Spending some time to understand the needs, wants, and pressures driving your opposition will give you valuable insight into how to tactfully approach the negotiating table.
If you have ever worked in retail, you know the agony of challenging customers. They made your job so much harder, and you counted the seconds until they would leaveleft the room and doing favors for those people was probably the farthest thing from your mind. The life of a sales rep, regardless of whether they sell coffee or software licenses, is hard enough. Making their day that much more challenging won’t get you the software contract terms you want. In fact, it’s a good way to raise the floor-price that your sales rep is willing to go down to.
Be an ideal customer and treat your sales rep kindly. Take the time to understand the sales rep’s motivation, it will help you through your contract negotiations and it will allow you to phrase your position in just such a way to appeal to their interests. Now, being kind is not the same thing as being a pushover — don’t agree to any deals just because you are afraid of hurting the sales rep’s feelings. Be kind but be clear and assertive about your position. A healthy relationship is one where both parties feel respected and heard and is fertile ground for positive negotiations.
For More Information
Contract Negotiations can be frustrating but it’s important that you enter the meeting with the right frame of mind. It can make all the difference if you want to leave the contract negotiation having fostered a mutually beneficial relationship. Now that you have the right attitude, it’s time to set it to work. At MetrixData 360, we have helped hundreds of clients achieve the contracts they want without damaging the relationship with the vendor. You can learn more about how to get ready for your contract renewal by reading our article, 5 Simple Tips for Software Contract Negotiation.