How do you prepare for SaaS renewal negotiations? How can strategic enterprise customers deploy and help increase their negotiation leverage? Adam Mansfield has the necessary knowledge to help you walk through the process and arm yourself with everything you need to know to succeed in million-dollar SaaS negotiations. He shares his expertise in this episode of Negotiations Ninja.
Outline of This Episode
- [1:46] Learn more about Adam Mansfield
- [3:41] How to prepare for a SaaS renewal negotiation
- [14:36] Arm your senior leadership with information
- [21:10] How to leverage new products to get a “deal”
- [26:04] How salespeople are typically compensated
- [29:09] How to manage the sales side of the negotiation
Audit what you’re using and not using
What are you using in your current portfolio? Adam encourages procurement to spend significant time analyzing the features and capabilities—specific to the product in question—that they’re using.
What type of users are using which features? Are there things that you’re not using that you’ll never use? How many features fit in that category? Do you have to stay with that product because you’ll use enough of it? Arming yourself with that information is critically important. You need to know what you’re getting value from.
You need to give yourself enough time to talk to the IT department, C-Suite, etc., to figure out if there are products you can move away from or lower user counts on.
Don’t forget about relationships
Where do relationships sit between the vendor company and your company? Large vendors build strong relationships in their line of business. As a procurement person, you need to understand the nature of those relationships. The cloud vendors have a playbook figured out to circumvent the procurement department to get what they want.
If you haven’t gotten buy-in from important players, the vendor will know if your threat to move away isn’t real. Secondly, it takes a large amount of time to get buy-in, negotiate with and procure another solution from another vendor, roll out the product, etc. The vendor you’re about to negotiate with knows that.
Dig into the details
How have you been treated? Many customers think they got a great deal at the last renewal. Was it? Was the pricing good? How much have you overspent? Have you had the right flexibility in your contract? Did you have future price protections negotiated? Have you needed something new from the vendor and been charged more? Could you have swapped features? How often have you heard from your vendor? How often do they check in with you? How quickly have they resolved issues?
What matters the most to them right now?
The Microsofts and SalesForces of the world have evolved. What matters to them? Pay attention to their earnings calls and participation in analyst days, and look at what they’re saying to the market. What products matter the most right now?
If you’re a Microsoft customer, Copilot is going to be pushed down your throat. The sales reps will have to get adoption of it. Knowing what matters when you’re negotiating is critically important. You can also leverage the usage to get concessions on products you’ve already adopted.
The vast majority of procurements don’t do enough research into publicly available knowledge, such as investor calls. Part of the reason they do these calls is to drum up excitement about revenue opportunities.
In the midst of the excitement, they’ll say things you can grab onto and use in your negotiation(s). You can say, “I heard these things are important to you. I’m trying to help you, too. Let’s work together.”
What else can procurement leverage? What about salespeople? How can you best handle the negotiation knowing that procurement is armed with information? Listen to learn more!
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