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Info of Negotiating Technology Contracts

I receive at least three calls each day from technology vendors interested in selling something: hardware equipment, software tools, consulting services, etc. Usually, these calls are “cold”. My name somehow landed on a telemarketing list in the hands of some vendor who is calling me out of the clear blue sky hoping that what they sell somehow matches what I need. You can waste hours on the phone letting some non-technical, script-reading, telemarketer or sales representative chew your ear off about their latest and greatest gizmo. Very rarely do these types of calls ever translate into a real business opportunity.

The most popular cold call opening is “Good morning. This is Joe from the XYZ software company. We offer break through whatever solutions to help you reduce your total cost of ownership for whatever. Let me ask you, are your responsible for managing your companies whatever investment?” I get so many of these calls that I can answer them in my sleep. Years ago, I used to engage in some level of discussion with these people and it always went nowhere. Unless you really think they’ve got something you might want to buy, cut them off immediately. And just like any telemarketer, they have a scripted response for anything. If you answer the above question with “No. I am not”. The immediate response will be “Could you direct me to someone in the company that is responsible for whatever”. If you hand out a name and number, you’re just passing the buck to some other poor soul in your organization. My favorite response is “No. We don’t respond to phone solicitations.” Nine times out of ten, they will give up.

Sometimes, the cold caller will make another run at it and re-state their purpose or as they close the call, sneak in another sales pitch. “Yes sir. I understand. We offer something really great for your company and would love to send you a free trial version at absolutely no cost. Its free to try.” You could be tempted to say “Free? Tell me more.” Again, this type of response will just open up the sales speech flood gates and you will be wasting your time trying to get a word in edge-wise. Stick to your guns: “As I said. We don’t respond to phone solicitations.” is the proper response. If they make yet one more run at it, the final blow would be “Not sure if you’re deaf, but I said we don’t respond to phone solicitations. Tell me your name and transfer me to your supervisor.” You will either hear apologies or a dial tone. Either way, you’ve just gotten yourself off of a call list and will never be bothered again.

If you’re interested in buying something, you do the calling, not the other way around.

Put The Horse Before The Cart

Never begin looking for technology solutions without knowing what you’re looking for. Know the business problem you’re trying to solve. If you know you need a software package that automates statistical analysis, flush out a more detailed set of statistics requirements (types of model, sample sizes, etc.) before you begin to shop around. Usually, software products have bells and whistles that, although look cool, are not absolutely needed. Before you begin comparison shopping, define your basic technology and business requirements. Knowing what you really need will give you confidence and leverage in a negotiation.

Always Comparison Shop

No matter what, always evaluate multiple options. If you’re looking for software, don’t get excited and latch on to the first package that looks good. And certainly don’t give a sales rep. the impression that you’re overly interested in their solution. They will be less likely to move during a negotiation. The IT market is over abundant with hardware, software and services solutions. Probably, you will have many options to choose from. Be picky!

Create Your Game Plan

Before you begin negotiating a deal with any technology vendor, plan your negotiation carefully. I have included some general planning questions that you should answer in preparation for a negotiation. The questions I have listed below may not make sense for your negotiation, so feel free to modify them for the occasion. The point here is to prepare in advance. You don’t want to figure out the answers to these types of questions in the middle of a negotiation as it may give an inch to the sales person. I would even recommend writing the questions and answers on a sheet of paper for reference.