And what could have been cheaper?
I have always loved and knew how to bargain. On the part of the buyer, this is a kind of game for getting the maximum benefit, and for the seller - a way to show that he appreciates the work and hard life of the person to whom he makes a discount. Seen how to bargain for 10 rubles, 5, and even chewing gum.
The article is intended to reveal a certain point of view on negotiating for the conclusion of contracts with the most favorable conditions for your company. For 14 years of evolution from an engineer of the first category to a deputy technical director in the direction of internal and external infrastructure (as well as consulting media holdings, start-ups, cryptobirds and social networks), I had to agree on hundreds of contracts with contractors. I can say that this experience is applicable everywhere - whether you choose a data center, buy equipment or look for a new car. As the saying goes: the courage of the city takes, and the audacity and villages do not hesitate.
Before continuing, ask a few vital questions that many face almost every day:
The fact is that for many of us it is completely natural to bargain and save when we spend our own hard-earned money. And the larger the amount, the more benefits we want. But when you have to spend money of a company / husband / wife / grandmother's inheritance, then often we somehow forget to learn about more favorable conditions.
Question: What discounts are there?
They are mainly divided into two types - direct and indirect:
Direct:
- One-time discount.
- Comment on the timeframe (subscription for a year / minimum volume, etc.).
- Increasing discount for KPI / volumes (more spending - more discount).
- Discounts for use when special conditions are met (use of a special type of license for development environments, inclusion of the service logo in your product, etc.).
Indirect:
- Trial periods.
- Special conditions for force majeure in contracts.
- Raising the level of service without surcharges.
Question: But if there are so many types of discounts, then why they are not made immediately?
It would be possible to answer with the saying about the mammoth, but there is also a detailed answer. Each company and manager has a reserve of%, which they can throw off. Because the first goal of any company is profit and if they succeed in interest you, in the long run you will bring them much more profit. And also, the higher the post of the person with whom you communicate - the more power he has to do to you well.
True, it’s good to get right away, cheaply and quickly is unlikely to succeed. But good and cheap - you can. Negotiations rush do not like.
Izi, but let's take it in order.
1. Get to
know Zen yourself Determine how you will present yourself and choose a communication strategy in advance. Are you a Mail.ru startup or daughter? As you introduce yourself - sysadmin or CIO, Marketing Manager or Deputy Head of Marketing, Social Networking Branch.
Positioning can have a different effect both on the companies themselves and on the different managers within them. The higher your own position, the more money and budgets you can allocate, and this is both good and bad. For example, if you make it clear that there is too much money, then you will not be thrown off immediately. But you can get something in the long term. In the opposite direction also works.
2. Get to know the market.
Question: Are all costes based on the average market value?
Not! Those. Partly yes, but also from the arrogance of the seller. Typical Product Placement: we are cool, so we are expensive. If you do not understand the market, then do not get a good discount. Considering and choosing a product, you should know the average market value of the product you require. If you are offered a service at an average market price - bargain, and if below the market - then bargain too.
Question: And if he has no competitors? Is it all rot? There is no point in asking for a discount?
And here it is. You have a budget performance indicator, does it justify the business goals for which it was allocated or not. And even if there are no alternatives, then ask for discounts and volumes. Because you have other areas that you want to try and develop, and the budget, although it is elastic - but not unlimited. Therefore, a single service provider should also be interested in making you better over time, evaluating you as a long-term customer playing for a higher monthly payment, and directing most of your budget to your product.
Question: 1% discount - is that a lot?
Yes! This is a hell of a lot, and not only if it’s about $ 100,000 a month, but even if it’s about $ 1,000, which can grow to $ 200,000 or more with development and volume. Once with a very, very cheap data center in Germany, we received a discount of 3%.
3. Know the product
. Any product has strengths and weaknesses, and pricing comes from them. With a very high probability, the product you choose has a competitor - find out what is better (price, quality, etc.) and why, and then use it as leverage to get the most favorable conditions from both product suppliers. Yes, this notorious word is tender. Choose the best, hold a tender among them. But those among whom you hold a tender should be in the same league.
You can hold several tenders for different leagues within a single product, but why? Determine the success criteria of the service provider and immediately understand which league to hold the tender. For example, for data centers, the criteria will be the channels, power supply, support, hardware. And for a mobile operator: call quality, roaming, internet cost, cost of a package of minutes, etc.
A specific product is good for specific goals. Understand what purpose you are using and can use the product. For example, in a cheap data center you can keep Development-environment, but we will keep Production only in expensive and good. Because business risks in case of failure of the data center with the Production environment are much higher than in case of failure of Development.
If what you purchase has several items (in the case of data centers, this is traffic, monthly server cost, one-time setup cost), then it makes sense to first discuss the conditions for each specific item, and then go additionally to the specials. conditions for the final price. Discounts are summarized!
4. Interested sales manager.
Make it clear that you are looking for a new service provider, because the old one did not meet the requirements. At the same time focus on the weaknesses of the new supplier, which you absolutely did not suit in the past.
Make it clear that you are a developing company and are trying out a new direction, counting budgets. And for this you need to spend as much as possible (meaning that, in your understanding, $ 100 is a lot of experiment) and get the maximum profit, after which you can move on to long-term relationships and develop the direction with your new partner.
“There is money!” - no need to say that . Yes, you have budgets and they can even become elastic when you reach the proper level of performance. By spending X money and getting the result Y, you will get an indicator of the success of using a particular supplier in a particular direction for specific tasks. Calmly convey the idea of joint profit.
Do not settle for favorable terms immediately. And do not look too confident that you want to work with him - let the “client mature” to a good proposal. When you take the time to make decisions, the other side has a thought (often true) that you are holding a tender, and the supplier himself can offer you more favorable terms.
Somehow one service offered us a decent 10% discount, but when I offered to sign a contract for 5 years and for 200 people in the company, the discount instantly increased almost 2 times.
5. “Make friends” with the manager
Buy not a product, buy from people. They sell the product not to the company, but to the people in it. Therefore, competently building relationships with your manager is very important, it will help you to first learn about upcoming promotions, discounts, exclusive products and other nishtyak, which later become public knowledge. Remember - the sales manager is the most interested (at the supplier) in you person. As a rule, he sits on% of sales and if he loses a client, he directly loses his personal money. Smile, do not be rude and do not trump.
Finally, we received favorable conditions, we were praised, and may even have written a premium. You can relax. Not! Constantly monitor the market, if a new suitable player has appeared - you just need to test its product, get exclusive conditions and price at an early stage.
As soon as you get favorable conditions from him, put them in the middle of the market, get something even better. And then go back to the old and ask him to make the price lower than the most favorable conditions on the market now. After all, you have been working together for a long time and trusting each other, and of course you would like to stay with the old supplier, but on the market (those that suit you) conditions.
Question: And I did not go too far? Suddenly, the discount will not give?
It is impossible to fail with a request for favorable terms - you will either be given something better than it was, or you will remain with the same conditions. In the market. With 0% loss.
Question: Suddenly I will ask too much and they will be offended?
You can not ask too much if you do it with a smile. You just laugh at the stupidity of 90% of the discount together and go 30% off. Well, or by 15%. Or at least 7%. Yes on anything, at least a purely symbolic 1% and free coffee on Thursdays.
We had a case when we asked for luck free licenses for the whole Development. Those. we said that we would pay for Production, and you to us Development. And they went to the meeting, although in Development-environment we have several times more servers and this is normal practice.
The article is intended to reveal a certain point of view on negotiating for the conclusion of contracts with the most favorable conditions for your company. For 14 years of evolution from an engineer of the first category to a deputy technical director in the direction of internal and external infrastructure (as well as consulting media holdings, start-ups, cryptobirds and social networks), I had to agree on hundreds of contracts with contractors. I can say that this experience is applicable everywhere - whether you choose a data center, buy equipment or look for a new car. As the saying goes: the courage of the city takes, and the audacity and villages do not hesitate.
I want good, fast and cheap
Before continuing, ask a few vital questions that many face almost every day:
- Do you buy a Troika card? Or every day take a fresh ticket for 2 trips?
- Do you use cashback programs, loyalty cards, accumulation of miles and other fintech?
- Have you ever changed the tariff of a mobile operator? And at the ISP?
- What methods of dumping prices used?
- Did you buy a car? Did the cost of hull insurance on the purchase of a particular model?
The fact is that for many of us it is completely natural to bargain and save when we spend our own hard-earned money. And the larger the amount, the more benefits we want. But when you have to spend money of a company / husband / wife / grandmother's inheritance, then often we somehow forget to learn about more favorable conditions.
Question: What discounts are there?
They are mainly divided into two types - direct and indirect:
Direct:
- One-time discount.
- Comment on the timeframe (subscription for a year / minimum volume, etc.).
- Increasing discount for KPI / volumes (more spending - more discount).
- Discounts for use when special conditions are met (use of a special type of license for development environments, inclusion of the service logo in your product, etc.).
Indirect:
- Trial periods.
- Special conditions for force majeure in contracts.
- Raising the level of service without surcharges.
Question: But if there are so many types of discounts, then why they are not made immediately?
It would be possible to answer with the saying about the mammoth, but there is also a detailed answer. Each company and manager has a reserve of%, which they can throw off. Because the first goal of any company is profit and if they succeed in interest you, in the long run you will bring them much more profit. And also, the higher the post of the person with whom you communicate - the more power he has to do to you well.
True, it’s good to get right away, cheaply and quickly is unlikely to succeed. But good and cheap - you can. Negotiations rush do not like.
Already eager to purchase the following service at a discount?
Izi, but let's take it in order.
1. Get to
know Zen yourself Determine how you will present yourself and choose a communication strategy in advance. Are you a Mail.ru startup or daughter? As you introduce yourself - sysadmin or CIO, Marketing Manager or Deputy Head of Marketing, Social Networking Branch.
Positioning can have a different effect both on the companies themselves and on the different managers within them. The higher your own position, the more money and budgets you can allocate, and this is both good and bad. For example, if you make it clear that there is too much money, then you will not be thrown off immediately. But you can get something in the long term. In the opposite direction also works.
2. Get to know the market.
Question: Are all costes based on the average market value?
Not! Those. Partly yes, but also from the arrogance of the seller. Typical Product Placement: we are cool, so we are expensive. If you do not understand the market, then do not get a good discount. Considering and choosing a product, you should know the average market value of the product you require. If you are offered a service at an average market price - bargain, and if below the market - then bargain too.
Question: And if he has no competitors? Is it all rot? There is no point in asking for a discount?
And here it is. You have a budget performance indicator, does it justify the business goals for which it was allocated or not. And even if there are no alternatives, then ask for discounts and volumes. Because you have other areas that you want to try and develop, and the budget, although it is elastic - but not unlimited. Therefore, a single service provider should also be interested in making you better over time, evaluating you as a long-term customer playing for a higher monthly payment, and directing most of your budget to your product.
Question: 1% discount - is that a lot?
Yes! This is a hell of a lot, and not only if it’s about $ 100,000 a month, but even if it’s about $ 1,000, which can grow to $ 200,000 or more with development and volume. Once with a very, very cheap data center in Germany, we received a discount of 3%.
3. Know the product
. Any product has strengths and weaknesses, and pricing comes from them. With a very high probability, the product you choose has a competitor - find out what is better (price, quality, etc.) and why, and then use it as leverage to get the most favorable conditions from both product suppliers. Yes, this notorious word is tender. Choose the best, hold a tender among them. But those among whom you hold a tender should be in the same league.
You can hold several tenders for different leagues within a single product, but why? Determine the success criteria of the service provider and immediately understand which league to hold the tender. For example, for data centers, the criteria will be the channels, power supply, support, hardware. And for a mobile operator: call quality, roaming, internet cost, cost of a package of minutes, etc.
A specific product is good for specific goals. Understand what purpose you are using and can use the product. For example, in a cheap data center you can keep Development-environment, but we will keep Production only in expensive and good. Because business risks in case of failure of the data center with the Production environment are much higher than in case of failure of Development.
If what you purchase has several items (in the case of data centers, this is traffic, monthly server cost, one-time setup cost), then it makes sense to first discuss the conditions for each specific item, and then go additionally to the specials. conditions for the final price. Discounts are summarized!
4. Interested sales manager.
Make it clear that you are looking for a new service provider, because the old one did not meet the requirements. At the same time focus on the weaknesses of the new supplier, which you absolutely did not suit in the past.
Make it clear that you are a developing company and are trying out a new direction, counting budgets. And for this you need to spend as much as possible (meaning that, in your understanding, $ 100 is a lot of experiment) and get the maximum profit, after which you can move on to long-term relationships and develop the direction with your new partner.
“There is money!” - no need to say that . Yes, you have budgets and they can even become elastic when you reach the proper level of performance. By spending X money and getting the result Y, you will get an indicator of the success of using a particular supplier in a particular direction for specific tasks. Calmly convey the idea of joint profit.
Do not settle for favorable terms immediately. And do not look too confident that you want to work with him - let the “client mature” to a good proposal. When you take the time to make decisions, the other side has a thought (often true) that you are holding a tender, and the supplier himself can offer you more favorable terms.
Somehow one service offered us a decent 10% discount, but when I offered to sign a contract for 5 years and for 200 people in the company, the discount instantly increased almost 2 times.
5. “Make friends” with the manager
Buy not a product, buy from people. They sell the product not to the company, but to the people in it. Therefore, competently building relationships with your manager is very important, it will help you to first learn about upcoming promotions, discounts, exclusive products and other nishtyak, which later become public knowledge. Remember - the sales manager is the most interested (at the supplier) in you person. As a rule, he sits on% of sales and if he loses a client, he directly loses his personal money. Smile, do not be rude and do not trump.
Hurray, we will be given!
Finally, we received favorable conditions, we were praised, and may even have written a premium. You can relax. Not! Constantly monitor the market, if a new suitable player has appeared - you just need to test its product, get exclusive conditions and price at an early stage.
As soon as you get favorable conditions from him, put them in the middle of the market, get something even better. And then go back to the old and ask him to make the price lower than the most favorable conditions on the market now. After all, you have been working together for a long time and trusting each other, and of course you would like to stay with the old supplier, but on the market (those that suit you) conditions.
Question: And I did not go too far? Suddenly, the discount will not give?
It is impossible to fail with a request for favorable terms - you will either be given something better than it was, or you will remain with the same conditions. In the market. With 0% loss.
Question: Suddenly I will ask too much and they will be offended?
You can not ask too much if you do it with a smile. You just laugh at the stupidity of 90% of the discount together and go 30% off. Well, or by 15%. Or at least 7%. Yes on anything, at least a purely symbolic 1% and free coffee on Thursdays.
We had a case when we asked for luck free licenses for the whole Development. Those. we said that we would pay for Production, and you to us Development. And they went to the meeting, although in Development-environment we have several times more servers and this is normal practice.