The Negotiation Process
Once you have determined your service needs, take a hard look at your current contract. As Steve Williams, President of McBeth Williams, a vendor-neutral telecommunications consulting firm that focuses on Fortune 1000 companies, puts it, “Don’t wait until just before the renewal date to do your negotiating. You are in a much better position reviewing it year to year, or even month to month if you are a very large company. If your company has exceeded your MARC (minimal annual revenue commitment), you are in an excellent position to negotiate with either your current carrier or a competitor.”
“The contract always started with the idea that you will have a good relationship with your carrier. Unfortunately, that rarely happens, so you need to use metrics like SLAs (service level agreements) and MARCs to renegotiate quarterly or month to month,” cautions Pete McBeth, McBeth Williams’ Director of Business and Telecommunications Strategy.
Here are some important tips when planning for and negotiating your services contracts:
Because the market is highly competitive, companies do not have to be huge consumers of telecom services to get good rates and services. Still, you’re going to get the best deal if you are able to negotiate with the carrier directly. While that’s great if you are a large Fortune 1000, life is a bit tougher for mid-sized businesses.
Carriers are spinning off their mid-market segment to VARs (value-added resellers), so that the carriers can be more selective about their customers. That hurts the ability of small and mid-sized business (SMB) customers to push for the best deals, but with the industry still reeling from the past few years, bargains are still available.
In the end, despite all the hype, there is often little or no difference in network quality between the providers. However, there can be huge differences in the service quality, price, and available features. By being careful and matching your requirements to your providers’ products, coupled with some sharp negotiations, you can realize substantial savings plus better service, making both you and your management happy.
It’s also important to prevent leaving your company vulnerable by purchasing services from only one provider. Advance planning for alternative service in case of a connectivity disaster helps ensure business continuity, which will make you look even better in the eyes of management. What could be better than that?