By Barton Goldenberg, President, ISM, Inc.
As we close the 2011 year, in addition to wishing you a happy and prosperous 2012, I also wanted to mention that typically the best time to negotiate with your CRM vendor is during December (assuming they follow a calendar year for accounting purposes). When negotiating with your vendor, remember first to negotiate user license to their lowest level based on industry examples. Next negotiate “other fees” (e.g., sandboxes, maintenance fees, etc.) based on this lowered user license amount. If you are unable to secure the license fee price that you are looking for, rather than try to negotiate a lower price consider having the vendor throw in additional licenses or training courses, etc.
Also remember to carefully negotiate professional services fees, as margins on and off-shore are typically very high for the vendor so you have considerable negotiating room. A couple of words of advice: do not attempt to negotiate the beginning-to-end professional services price at the outset of your negotiations since vendors must build in a margin for the ‘unknown’ and your total price will come in high. Rather, negotiate a reasonable price for the business requirements work, then a separate price for the design work, the build, the UAT phase, etc.
At the end of the day, you want to keep a good working relationship with your vendor and not everyone has the skill to comfortably negotiation with that vendor at the outset of that relationship. If it all seems to complex, call us and we’ll do our best to give you a hand!