Negotiation tips for tough economic times: part 1

We hear about cost-cutting and layoffs now on an hourly basis. Many of our clients are coming to us asking how they can re-negotiate their licensing contracts to cut costs. Since we are sure everyone reading this blog right now is in need of some cost cutting, here are some tips to help you negotiate with your software vendors.

Know your stuff – make sure you know your contracts inside and out, so you know what has been working for you and what hasn’t.

Avoid Buying More Shelfware – be careful not to over-estimate the number of seats you need. If you have laid off some staff members, contact your vendors as ask about “parking” your per seat licenses until the economy improves. It’s typically pretty difficult to decrease seats when re-negotiating, but parking may be a viable option.

Negotiate Hard out of the Gate – the best cost saving opportunities are at the front end of a contract, when the vendor knows it’s still possible for you to walk away. If you are buying 2,000 seats, negotiate the first 1,000; once the contract price has been negotiated, then add the second half at the negotiated price.

Ask for the Sky – The worst they can say is no, right? Vendors are always holding money back so they can work some sort of concession or discount into the deal. Especially during tough times, they will do what they must to get your sale. Ask for as many discounts and concessions as you can think of – they have to at least give you some. These could be anything from financing options to a free year of maintenance.

We are paying for what? – believe it or not, a majority of companies are paying for services and software they don’t even have – check inventory against your monthly and yearly bills to be sure you are actually using everything you are paying for. If not, get rid of it!

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