• Vendors have well-honed negotiation strategies that don’t prioritize the customer’s best interest, and they will take advantage of your weaknesses to extract as much money as they can from the deal.
• IT teams are often working with time pressure and limited resources or experience in negotiation. Even those with an experienced procurement team aren’t evenly matched with the vendor when it comes to the ins and outs of the product.
• As a result, many have a poor negotiation experience and fail to get the discount they wanted, ultimately leading to dissatisfaction with the vendor.

Our Advice

Critical Insight

• Requirements should always come first, but IT leaders are under pressure to get discounts and cost ends up playing a big role in decision making.
• Cost is one of the top factors influencing satisfaction with software and the decision to leave a vendor.
• The majority of software customers are receiving a discount. If you’re in the minority who are not, there are strategies you can and should be using to improve your negotiating skills. Discounts of up to 40% off list price are available to those who enter negotiations prepared.

Impact and Result

• SoftwareReviews data shows that there are multiple benefits to taking a concerted approach to negotiating a discount on your software.
• The most common ways of getting a discount (e.g. volume purchasing) aren’t necessarily the best methods. Choose a strategy that is appropriate for your organization and vendor relationship and that focuses on maximizing the value of your investment for the long term. Optimizing usage or licenses as a discount strategy leads to the highest software satisfaction.
• Using a vendor negotiation service or advisory group was one of the most successful strategies for receiving a discount. If your team doesn’t have the right negotiation expertise, Info-Tech can help.